AI-Powered Personalisation: The Future of Retail

A common concern emerging from the use of artificial intelligence in various industries is that the technology could lead to a certain level of detachment and dehumanisation, as different aspects of the customer experience become automated. However, we would argue that AI is actually an incredible tool for amplifying the customer experience. More specifically, in how it can help with greater personalisation within the retail industry.

In this article, we’ll take a closer look at AI-powered personalisation, as well as the various uses of AI in retail, so that you can start exploring your AI usage options. We’ll also discuss the importance of personalisation in the modern retail industry, as well as specific use cases for AI in retail, such as product recommendation or data analysis. Read on for more.

The Importance of Personalisation

Personalisation is an essential ingredient in the recipe for brand loyalty, especially when it comes to retail businesses. Indeed, the multinational consulting firm Deloitte has found that brands focused on personalisation as a priority are 71% more likely to report improved customer loyalty.

Personalisation appeals to customers for two key reasons:

• Firstly, personalisation has significant practical benefits. Common examples of personalisation include product recommendations based on previous purchases, or unique discounts on the customers’ favourite products. These all help to boost customer satisfaction.
• Secondly, it helps the customer feel appreciated and acknowledged by the company. In turn, this can help form an emotional bond between the business and the customer, which promotes repeat business.

However, it’s important to note that personalisation is not something that’s nice to have but ultimately unessential: it’s a core expectation in modern retail. A significant majority of customers dislike a lack of personalisation — 74% of customers feel frustrated when website content is not personalised — because without recommendations or personalised discounts, shopping is more expensive, more time-consuming, and less enjoyable.

So, how can you include personalisation in your retail business? Previously, this would have required hiring experts or conducting significant market research. However, with AI, the personalisation process can be massively streamlined.

Using AI in Retail

AI is rapidly becoming a core part of the retail experience; with smart chatbots seeing use alongside AI-powered inventory management systems. But how exactly is it being used when it comes to personalisation? Below, we’ve listed two practical applications for AI that you might consider implementing in your own retail company.

Improved Product Recommendations

Customer relationship management experts Salesforce found that 69% of customers now expect to see new merchandise each time they shop — either in person or online. While it may be that your inventory is large enough that your customers are likely to see new products every time they visit, it’s important to consider if they will actually notice the variety in your product offering.

Product recommendation is a great tool for this, but customers are likely to find it annoying if the recommendations are irrelevant to their needs. With AI, however, your business can ensure a much greater level of accuracy in your recommendations. If a customer is signed up for your loyalty programme or has an account on your website, an AI-powered product recommendation tool can examine that customer’s purchase history and display products that they are likely to enjoy or be interested in.

When combined with AI, particularly well-designed recommendation tools can even act as digital shopping assistants. Instead of only looking at past purchases, they might track previous pages you’ve visited, or ask what aspect of different products you like and don’t like so they can further narrow your search.

Analysis and Insights

Artificial intelligence is now being used in a range of industries as a tool for data analysis, primarily because AI does this job very efficiently. Datasets that would take a human analyst days to comb through can be examined by an AI in a fraction of the time. Meanwhile, some of the more intelligent programs can even provide their own insightful conclusions regarding the datasets they have access to, which gives them even more utility for retailers.

In retail personalisation, artificial intelligence’s capacity for analysis can be used to create very finely tuned shopper profiles. A shopper profile describes the shopping behaviours, preferences, and buying habits of a customer or set of customers, based on sales and customer behavioural data. The more accurate your shopper profiles, the better you’ll understand your customers, as well as their wants and needs. With AI, you can create profiles that might even help you get ahead of the market and predict what your target audience will want in the near future.

However, before you get too excited about implementing AI, remember that this technology is only as good as the data it’s nurtured on. To use AI effectively, you’ll need a large database to train it to do what you need. This is one of the reasons AI is popular as a means of improving personalisation in digital loyalty programmes: a loyalty programme profile will be full of useful customer information to train an AI with and provide a great foundation for your personalisation projects.

Implement AI Into Your Digital Products With Future Platforms

At Future Platforms, our priority is achieving our clients’ goals, whether that means boosting customer loyalty, improving engagement, or increasing revenue. To ensure success, we consider every tool at our disposal — and artificial intelligence represents an incredible asset for retail businesses looking to grow.

If you want to start using AI-powered features in your business, we can help. Our expert team of developers and designers has decades of experience designing sleek custom websites and engaging, accessible mobile apps. With our help, you can revolutionise your customer journey by leveraging AI to create a uniquely personalised retail experience.

To get started, simply get in touch.