Relatedly, AI will also dramatically change the way retail marketers reach individual shoppers with individualized messaging, also improving customer experiences.

Here is IBM describing its partner, Equals3, and its IBM-powered Lucy AI engine: “Lucy automates labor-intensive tasks and converts data assets into a quickly-searchable source of insights—freeing marketers to focus on complex, higher-level functions. Lucy is a cognitive problem solver. Whether it be determining market segments, doing competitive or market analysis, media planning, writing a marketing plan, developing a marketing strategy, creating organic content—Lucy’s assistance helps with every task.”

AI can be a boon for retailers and consumers provided that the machine can correctly answer a consumer’s question the first time it is asked or the first time a consumer is looking for a specific product. Too much time is being wasted with websites delivering information that a consumer doesn’t want or need. I look to AI for skillful recommendations and accurate information.

E-commerce has conquered the last mile of delivery. Amazon is now leading the way with in-home and in-your-car-trunk options. So while there are tremendous strides being made on how to personalize the purchase delivery, personalization in the early phases of the shopping journey has been lacking. Personalization is the current Holy Grail of engaging shoppers. Research indicates that customers will linger longer and purchase more when the experience is personalized to them and their lifestyle. For a number of years, David’s Bridal has had an interactive personalization process for not only the wedding dress, but also planning the entire wedding. It is a good case study of engaging customers through personal interaction of choices and then making that seamless to all the stores. The rapid advancements in personalization will come through AI on the web. AI has the ability to “learn” individual customer patterns, backgrounds and behavior … and then customize choices and offerings in ways the the customer may not even realize. The interesting question is, how much personal information will customers being willing… Read more »

AI will start to creep into online retailing as the costs and the technology become more accessible. Right now it is still cutting-edge technology. The key for advancing the adoption is to ensure that your digital channels are connected and have the foundational ecosystem to leverage it. Personal recommendations driven by AI are useless without a very robust view of the customer’s behaviors and preferences (or you are making bad recommendations based on bad data), and the ability to publish the personal content (not knowing the best approach for getting the customer to convert is as bad as bad recommendations). Those two things involve good foundational digital technology. Retailers are still struggling with connecting disparate channels, let alone a cohesive interconnected infrastructure to provide that personal experience shoppers expect. It’ll take hold … it’ll just be a while before it does.

AI is hot and a great buzzword but not simple to do well. If executed poorly, customers will hold the offending retailer responsible, not the software company providing the functionality. But it is coming … and fast. I see the earliest relevant uses being to simplify the path to purchase for consumers who have a good idea of what they want but need a shorter path to get to it. Only down the road will AI be effective at helping consumers discover new brands and products that the consumer may not even realize s/he wants.

I definitely see AI growing not just for online uses but everywhere. We are still in the early stages with AI, with many issues that need to be resolved and improved. Today there are times when customers become frustrated — if, for example, AI chat does not understand them, or other another service a customer is using is not functioning correctly. However, we have to give this exciting technology time to be fully developed. Think back to the dial-up early days of the internet and how frustrating that was compared to where we are today. Within 10 years, AI will be as natural to us in cars, in our homes, online, in stores and just about anyplace we can imagine. How we integrate with it and how that impacts our workforce is another topic. But one thing about technology is that you can’t stop it and it always continues to move forward.

Artificial intelligence (AI) is quickly becoming the latest shiny object of conversation but it’s been evolving for years. A colleague of mine was on the small team that developed and implemented the first recommendation algorithms for Amazon. The power of AI is when it is integrated in the broader digital and brick-and-mortar shopping ecosystem. These Big Data solutions can be combined with “little data” solutions — solutions that are pragmatic yet change the status quo and existing business processes (e.g. RFID, inventory visibility and management — we always seem to find our way back to supply chain visibility!). Artificial intelligence and machine learning will define the invaluable platforms needed to succeed and meet the expectations of the the digitally-empowered shopper.

Yes, AI is certainly marching forward and I see it as an advantage to those retailers who can execute well. IMHO, great execution must include human judgement. We are still and always will be a human, and therefore emotional, society.

AI and chat bots existed before the web itself. Retailers should not assume AI is future technology, it is just that the hardware and technology is now available to implement in a more mainstream fashion. One of the AI-related technologies I see missing is crypto-based which is the most important and relevant right now. AI will need a secured identity and the ability to create a unique digital signature that is secure to conduct transactions such as purchases and return facilitation and allow the customer to verify they are talking to an authentic AI and not a phishing AI. In every movie about AI, the AI had to learn about the owner and the operating environment from home to a spaceship. Retailers cannot outsource AI or rely on a tech company — the AI has to learn everything about a particular retail operation while researching external patterns and practices. One more point — AI are not silos. Some AIs can post to Facebook or Instagram as well as follow up on customers and literally pay… Read more »

Personalization is a consumer demand so the use of AI is likely to start there. To be successful someone needs to write good algorithms, test their assumptions, test the results and monitor consumer changes. Using AI is not as easy as writing a formula and assuming that it works now and will continue working for the foreseeable future. How many people are qualified to do this well?

The results that SLI Systems has released square in many regards with recent findings in our own research — we found, this past July, that 33%–43% of marketing leaders are deploying or testing-to-deploy artificial intelligence, with bots leading the field and voice assistants coming in at the slightly lower end of the spectrum. All of this points to one certainty about the future of retail — consumers will be working with AI interfaces to make choices throughout the shopping cycle. Retail leaders that want to succeed at capturing their customers’ spend throughout this transformation must apply the same lessons we’ve learned from most of our industry’s recent mobile advances — build valid experiences for the user and the device, emphasize context and relevance, and personalize for, predict for, and surprise your mobile audience with ideas and inspirations they would not have discovered on their own. The good news is, AI is tightly aligned with the kinds of engagements that breed these experiences. It’s heartening to see adoption of AI interfaces on the rise in the… Read more »

Pittman gave a similar talk last week at the Forrester Research conference in San Francisco. The majority of personalization in the market today is rules-based and not truly AI and, as Doug Garnett points out above, after 15 years of working on it even leaders like Amazon still can’t get product recommendations to work all that well.

AI based implementations like eBay’s ShopBot offer a new approach with the potential to deliver far greater consumer relevance and resonance than rules-based techniques have been able to deliver.

AI-enabled chatbots are already transforming online retailing around the world from India to the U.S., today. AI is promoting the full line assortments of merchants, rather than human call center associates simply recommending the top sellers. There are myriad additional uses for AI in the digital shopping experience. Look around at the best sites currently, and you’ll see some great examples right now.

This falls in line with the research J.P Gownder presented last week at Forrester’s CXSF 2017: 51% of companies, especially the marketing departments within, are either using or are planning to expand their use of AI.

While AI was indeed the “overriding theme” at CXSF, it was tempered by another statistic from Forrester: the customer experience declined between 2016 and 2017.

Ultimately, transforming the online experience means transforming the human experience, and many AI-powered solutions are falling short.

On this, Pittman’s words rang true at CXSF as well:

“Personalization, generally, sucks. I don’t understand why. I’ve been in this business for 20 years and I’m seeing little more than recommendations. There’s no longer an excuse.”

This is both the most simple and complex question I have ever commented upon as a contributor to RetailWire. Simply, recommending products to a human must encompass the individual sensory preferences of matching a product to the individual preferences of fit, look and feel of an individual person. Short of that, a linear search is a micro segmentation-grouping people into buckets. Ok I can accept that. What I cannot accept are technologies focused solely on segmenting people into groups, as in the past 20 years, versus preference matching people to products they love.

AI has the capability of enhancing the digital shopping experience, but I don’t believe the industry is ready for that. As you can see in the poll besides personalized shopping not many experts have plans to implement AI just yet in their strategy. There are still many factors and variables when it comes to AI and I don’t think retailers are willing to take the risk of upsetting their customers due to an incorrect algorithm. Regarding the future, as natural language processing is built out in the years to come it will have a significant impact on online ordering as shoppers will just have to say “Order me the best paper towels, I need them today” and if everything goes right the AI should be able to place the order for the correct item, delivered at the requested time without hassling the shopper with additional questions. So in theory AI should be able to act as your personal shopper, that will select the optimal product based on your needs, and do it all with the… Read more »

As more and more data is collected on shoppers, potential shoppers and the products themselves, more and more analytics can be conducted to determine when a buying funnel has actually begun or is about to, which marketing and merchandising tactics work and which don’t per buyer. We all know that one size does not fit all but the true way of adjusting the strategy relies on our ability to understand shoppers, their interests and their needs, and then target them when and where its most effective. AB testing becomes integral to decision making and is easily and seamlessly conducted for experimenting with new ideas and for finding the right targeting channels for the buyers.