Photo by Jessica Loaiza on Unsplash
Is Ghirardelli on the Right Track With Recent AI Utilization?
In today’s digital age, visuals play a crucial role in capturing consumers’ attention and driving sales in the online marketplace. Recognizing this, Ghirardelli, a prominent chocolate brand, has embarked on a journey to enhance its direct-to-consumer (DTC) channel through the power of artificial intelligence (AI).
The challenge Ghirardelli faced was clear: how to analyze and optimize visual content effectively to engage consumers and drive conversions. Pam Perino, Ghirardelli’s digital content operations and development manager, revealed that captivating visual content is key to keeping consumers engaged and ultimately making a purchase.
To tackle this challenge, Ghirardelli turned to AI, specifically “leveraging the AI-based Visit Conversion Optimizer App into the Salsify PXM Advance product experience management platform in an effort to maximize the effectiveness of visual imagery on its Amazon store.” This AI-driven solution offered several advantages, including in-depth insights, rapid analysis, and scalability.
Using AI, Ghirardelli gained valuable insights into consumer preferences and behaviors, enabling the company to tailor visual content to specific target audiences. Traditional methods of analysis were time-consuming and costly, making AI a more efficient and cost-effective solution for Ghirardelli’s needs.
The results speak for themselves. Ghirardelli was able to identify areas for improvement in its visual content and test changes in real time, leading to a significant uplift in conversion rates for key products, according to Perino. This success has paved the way for future AI initiatives, including the use of AI for generating marketing copy tailored to specific retailers and a new focus on “seasonalization,” where the brand can create content to capitalize on peak shopping periods.
Last September, Ghirardelli utilized generative AI technology to edit images on its product detail pages, with the aim of expediting the process and enhancing conversion rates. While hesitant to fully rely on AI for image creation due to concerns about accuracy, the brand used AI tools to guide decisions on image adjustments. Vizit, an image-scoring software, aided Ghirardelli in evaluating and improving images for better performance, though Perino noted at the time that the brand was awaiting further advancements in AI before entrusting it with tasks such as generating product copy. Despite reservations, Ghirardelli remains optimistic about the potential of AI to streamline content creation and enhance digital marketing efforts in the future.
The confectionery company has also made a major milestone this year with its first store opened in New York this past January, followed by a shop in the California Napa Valley.
“Ghirardelli Chocolate is excited to open our first shop in New York. We are proud of our 171-year history that started in San Francisco, and pride ourselves in making quality chocolate so delicious it Makes Life a Bite Better. We can’t wait to welcome our guests in New York to create sweet memories with friends and family for many generations to come. Our shops are designed to showcase our history and heritage and highlight our craft in handmaking our hot fudge. It truly feels like the cherry on top to open in New York City’s iconic Empire State Building. We welcome everyone to visit and grab our World Famous Hot Fudge Sundae this summer!”
Ghirardelli Chocolate Company Spokesperson via NYBiz Daily
As Ghirardelli continues to harness the power of AI, it is poised to further enhance its online shopping experience and drive growth in its DTC channel.
Discussion Questions
What implications does Ghirardelli’s successful integration of AI into its direct-to-consumer strategy hold for traditional retail models and brick-and-mortar stores?
As Ghirardelli expands its online presence and opens physical stores, how can it ensure a seamless omnichannel experience for consumers?
What strategies can the company employ to integrate AI-driven personalization and data analytics with the tactile and sensory elements of in-store shopping to create a cohesive brand experience that resonates with consumers across all touchpoints?
Poll
Loading …BrainTrust
Zel Bianco
President, founder and CEO Interactive Edge
Richard J. George, Ph.D.
Professor of Food Marketing, Haub School of Business, Saint Joseph's University
Using AI to create images, especially of food, is generally a bad practice. However, using AI to help optimize real images based on customer reactions is sensible. The only proviso is that AI needs to stick with the realms of reality, which it seems to have done in this case. Of course, this kind of technology can be used to optimize lots of things – shelf layout, point of sale promotion, and so forth.
Ghirardelli’s successful integration of AI into its direct-to-consumer strategy suggests a shift towards data-driven decision-making and personalized consumer experiences. Traditional retail models and brick-and-mortar stores may need to adapt by incorporating AI for better understanding consumer preferences and optimizing in-store experiences to remain competitive in the evolving market landscape.
To ensure a seamless omni-channel experience, the chocolate company can integrate online and offline channels with unified customer data, offering click-and-collect services, maintaining consistent branding, providing in-store pickup options, implementing AI-driven inventory management, and executing cross-channel promotions. Additionally, Ghirardelli can integrate AI-driven personalization for online interactions while enhancing in-store experiences with sensory elements like product sampling and interactive displays, thereby ensuring a cohesive brand experience across all touchpoints.
This is an excellent example of a real, practical AI use-case that appears to be delivering better business results for Ghirardelli’s. And while applying AI to improve conversion rates in their online DTC channels is a smart move, AI can and should be applied to help improve conversion rate performance in their physical stores too. There are many potential AI use-cases that can be applied to the physical store including, analyzing conversion rates of every hour of every day in every store to identify the most effective staffing levels and store team skill mix that delivers the best in-store conversion rate performance. However, as with any use of AI at this still early but fast-moving stage of development, retailers need to exercise caution and care in how they apply AI and be mindful of the underlying data they use to create the insight.
The challenge Ghirardelli faced was clear: how to analyze and optimize visual content effectively to engage consumers and drive conversions. Is this going to be another Princess Kate moment?
This is a bad idea. Today, the food you get at restaurants or in packages rarely looks as good as the images on the many packages. This will make it worse, and I believe delves into misrepresentation. Big word for false advertising.
This provides an excellent example of how to utilize AI in a business context. Lots of folks don’t know that AI tools have been around longer than generative AI, and there are useful business cases. And for the naysayers, the train has left the station.
If done with a healthy dose of skepticism and practicality, it makes sense. When food is involved, one must be careful to not have the images conflict with reality. Full disclosure, Ghirardelli happens to be a client, and have found them to be wide eyed and practical so I am confident that they will proceed with caution and adjust when needed.
I just read some survey results that said more companies are actually using AI to generate marketing copy than anything else. I think that makes sense. I also think (and maybe I’m naive) that we are in the middle of the world’s greatest hype cycle. RFID was going to change the world, but ai is apparently going to destroy us.
I just am looking for some rationality here, and that study was the closest I’ve seen
It’s important to remember, that despite the excitement surrounding AI, it is a tool that works better for some tasks more than others. No professional repairman would only have a pliers in the toolbox. We can’t make AI the new age singular tool.
If Ghiradelli starts expanding their branded retail stores they should start by updating their flagship location in San Francisco. I was in this store in December and it was boring Now-in their defense it may just reflect the state of things in San Francisco, but there were hardly any customers and nobody was watching the chocolate being made, ordering sundaes, etc. All of the stuff on offer is easily available from supermarkets in any area.
There should be unique items with availability only through Ghiradelli. Fix the flagship store and grow from there.
Insights about product content and imagery gathered through AI driven A|B testing, or other methods online should be captured, adopted and executed when it makes sense in other channels. Customers experience brands holistically in app, online, on socials and in-store so it is important for brands to be consistent and trustworthy in how they display the content, food imagery, etc.
Ghirardelli has several interesting ways that they do that online. One example that I see is to bring the imagery of the flavors of their chocolates to be more visible. For the dark chocolate mint squares, they will show not only the individualized package but also the piece of chocolate to see the mint filling and lastly include several mint leaves. Ideally with the right data, they would know when to accentuate a gift box more than another normal package which could choose to accentuate the flavor and product image.
Taking these lessons in store, they could use a QR code on the shelf tag or QR code on the package to link to the same imagery that was online so the shopper could see what these chocolates look like online and get a sense of the flavor, whether it is caramel or mint. The insights online then can be fully translated in-store benefits instaneously with a QR code linked to dynamic real-time images and product content.
Ghirardelli’s is smart to test AI-powered marketing tools for optimizing visual content and copy. They’re even smarter to proceed with caution. It’s one thing to present their products in the best light in terms of algorithms and effectiveness with shoppers, but the risk of AI presenting “fake” chocolate images or misleading product descriptions is still real.
While AI presents opportunities for improved efficiency and targeted engagement, authenticity and control are essential. It’s sometimes hard to remember that ChatGPT only launched to consumers in November of 2022 and new B2B use cases emerge daily. Adult supervision is still required.
Most brands are going D2C to improve margins and inventory management and have greater control over the customer lifecycle. Our ongoing research shows around 21 key areas across the value chain where brands either are planning or already leverage AI. Net/net, expanding D2C with the help of AI is the way to go. I won’t be surprised if Ghirardelli expands its ambit of AI applications to optimize product yield, planning, risk management, customer servicing chatbots, and product training.
This a great example of practical examples of AI. As in many use cases, especially images, companies will need a human review for accuracy of images and messaging to ensure it isn’t deceptive and aligns with the company’s brand image.