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I have written many times before about how AI is changing the landscape of marketing. It gives marketers the opportunity to reach more people while delivering personalized, relevant and timely content to them. Particularly interesting, is the use of AI in the retail industry. Many people fear that e-commerce giants threaten the existence of local retailers, but, brick-and-mortar stores aren’t dying, they’re simply evolving. The use of technology is enhancing customer connectivity and experience at every touchpoint, both online and in-store.
When Mckinsey interviewed Devin Wenig, President of eBay Marketplaces, about the transformation of retail, he said, “The death of the store has been greatly exaggerated. There will be a transformation, but not an end to it….You will see a fundamental restructuring of retail real estate—you will see distribution centers, local economies, technology-enabled shopping, and a very different approach toward how you engage with the consumer.”
AI-enhanced technology is not only being used by marketers to engage with customers and draw them in; but is being used by sales associates to shape or enhance customers’ physical, in-store experiences, as well. Take, for example, the chocolatier and candy retailer, Lolli & Pops, who launched the use of Mobica facial recognition technology last year to deliver a more personalized in-store experience to its VIP customers.
How? Customers that opt in to the loyalty program will walk into a store where a camera recognizes their face and sends that information to the app of one of Lolli & Pops’ “Magic Makers” – a sales associate who is then able to access the customers’ unique taste profile, preferences, purchase history, allergies, and more – so that individualized product recommendations can be made. I liken this to Amazon’s recommendation system, which more often than not lets me know about additional items I didn’t even know I wanted or needed (yet end up purchasing).
“While from the merchant standpoint incredible selection may seem great, from the consumer standpoint it can be overwhelming. I actually don’t want to shop in a store with a billion items for sale, I’m just looking for this. Data is the way to connect a long-tail advantage with consumers that oftentimes want simplicity,” Wenig said.
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The ability to curate a selection of products for each customer lends itself a highly personal experience. While having access to this kind of small data readily available certainly empowers the “Magic Makers” (or sales associates), it also empowers the customer. A uniquely tailored experience gives people the opportunity to make intentional, customized choices. Personally, I know I would rather have ten “picked-for-me” choices vs. fifty “shot-in-the-dark” options.
Think about one of your favorite local shops that you’ve been going to for years. Chances are that you know the owner and/or salespeople and that they know a bit about you. They might even have a paper filing cabinet with your purchase history in it. That shopping experience is less about a transaction and more about building emotional human connections. It’s that combination of human interaction and personalized selection that will continue to drive customers to brick-and-mortar locations.
Outside the store, many retailers have also turned to autonomous technology to communicate with prospective, current and returning customers to provide personalized, customer support on the go. And, conversational commerce gives the customer the ability to do so on his or her own terms. The term “conversational commerce” was first coined by UBER’s Chris Messina in 2015. He (correctly) predicted that if people choose instant messaging and texting as a way to communicate with their friends and family, then they certainly will want the option to communicate that way with businesses. The use of AI has given “conversational commerce” tools, such as chatbots, the ability to deliver a highly personalized omnichannel experience, both online and in-store. In another upcoming article about the transformation of retail marketing, we’ll look at how brands are also using other tools, such as augmented reality to create even more emotional and relevant customer interactions.