Will AI transform retail marketing?




A survey from Sailthru finds more retailers using artificial intelligence (AI) to support marketing purposes.
The survey of more than 200 retail marketers showed that of the 66 percent who leverage AI for marketing purposes, the most common applications are in search (37 percent), product recommendations (33 percent), and programmatic advertising and data science (both 26 percent).
Still, the marketers leveraging AI in one or more channels/methods weren’t much more likely to have met or exceeded their 2016 marketing goals. Sailthru said this suggests “not all applications and methods are equally useful, and that simply employing AI-based solutions is not sufficient for marketing success.”
Cosabella, however, has significantly increased its subscription base and e-mail-driven revenues since shifting to an AI-enabled marketing automation platform, according to Emarsys, which provided the core marketing technology for the implementation.
In transitioning last fall, the family-owned Italian lingerie company dropped the advertising agency that had overseen areas such as SEO (search engine optimization), CRO (conversion rate optimization) and overall e-mail campaigns.
The company collaborated with five technology providers, programming the new AI-driven platform to absorb two years of product, pricing and consumer profile data. Customers were then auto-grouped into “personas,” such as best/worst customers, slipping/gaining customers, etc., to receive tailored e-mail or mobile offers.
Courtney Connell, Cosabella’s marketing director, said that due to the system’s machine learning capabilities, the program is “constantly fluctuating,” or continually making adjustments based on responses to campaigns to optimize returns. The technology works to personalize offers to past-purchasing behavior and employs other methods to better engage customers across channels.
Allen Nance, CMO, Emarsys, admits that one challenge for AI is that many marketers trust the traditional “batch and blast” approach that is often favors human instinct over a machine algorithms.
Ms. Connell said she “always believed that a machine would make better decisions and scale the data better than I would personally.” Her marketing team can now spend more time on “emotional content” and other more creative pursuits. Indeed, she believes removing much of marketing’s repetitive tasks through AI will “force us to reconnect with what makes us human.”
- Digital Retail Innovation Report – Sailthru
- Cosabella’s Revenue Surges 60 Percent Using Emarsys AI-enabled B2C Marketing Cloud – Emarsys
- Retail Marketers Using AI Most Commonly For Search & Recommendations – MarketingCharts
DISCUSSION QUESTIONS: How do you see artificial intelligence altering retail marketing? Where can machine learning automation be being particularly beneficial across marketing processes?
Join the Discussion!
15 Comments on "Will AI transform retail marketing?"
You must be logged in to post a comment.
You must be logged in to post a comment.
President, Max Goldberg & Associates
AI is not a panacea. It will not replace the need for retailers to cover the basic building blocks of any business. Retail is all about offering consumers products they want at prices they can afford, within an environment that is entertaining.
President, Global Collaborations, Inc.
AI in and of itself, especially if just used to replace current advertising, does not generate success. What do you want to learn about your consumers? What do you want to do with that information? Does the AI algorithm have the authority to make any change? using AI needs to be thought through carefully.
Global Retail & CPG Sales Strategist, IBM
Just one example of real machine learning and artificial intelligence in retail today is one online merchant that has a publicly available app that aggregates inputs from shoppers to help determine the best gift for any occasion based upon the natural language responses shoppers type or speak for questions asked by the app. This service has become particularly valuable to the retailer because, as opposed to a call center person who typically only suggests a couple of the most popular items to the shopper, this app digs down throughout the assortment to suggest the best item for the shopping mission. We are seeing greater movement of SKUs in the bottom 80 percent of the product line than ever before.
Founder, CEO, Black Monk Consulting
Retail-Tech Specialist Advisor
AI is one of the main tech disruptions that presently and in the coming years will change the world as we know it (digital health/medical tech is another example). No doubt AI will change a lot of what we know and do in relation to retail. Early adoption of AI in different aspects of retail can be unsuccessful in the short term. But longer-term retailers will go down the learning curve, while technology will improve to become more mature and gradually AI applications will create much more value in retail, especially in data analysis and fact-based decision making processes.
We already see existing AI-based solutions that create a lot of value for retailers, such ones that automatically create personalized offers and campaigns that are sent to millions of customers based on their purchase history and “Retail DNA,” or AI systems that follow shoppers who are online shopping to improve conversion, prompt personalized offers, save “abandoned carts” and tailor customized content to the particular shopper’s needs.
CEO, Fuse Inventory
I think a big reason why marketers don’t see better results is because many companies that claim to have AI or machine learning actually don’t. You need a lot of data, which most ad-tech startups don’t have. Additionally, most AI isn’t as good as the human mind, yet. I think the key is to dig into how the product actually works and understand the value — if it sounds too good to be true it probably is.
Chief Amazement Officer, Shepard Presentations, LLC
AI is revolutionizing the customer experience. It’s not as much about automation, although that is a powerful part of AI. It’s what information can be provided to support a sales or customer support person. Machine learning and automation can make customer support better. Simple basic questions can be answered online by computers. Customers interact with the company — actually the machine — to get information quickly. The best systems simulate a “people to people” interaction. They also can tell when the customer isn’t getting what they want and quickly and seamlessly connects them to a human.
VP of Sales and Marketing
Co-founder, CART
Retail executives are drowning in data today as big data continues to explode. New solutions and capabilities are coming into the market that use AI to automatically surface key analytics, automate processes and focus on opportunities or concerns. AI and machine learning are taking optimization solutions to new levels of accuracy and capability, which as Ms. Connell says, frees up humans to be human and build both relationships and the business.
Strategy & Operations Delivery Leader
Ultimately, the long term impacts of AI on retail marketing will be substantial. While AI will potentially have a positive effect on both the consumer’s and retailer’s decision making process, this is an evolution, rather than a revolution. The retailer’s marketing teams should start to build up their capabilities, skill-sets and prepare to take advantage of this advanced technology before it becomes mainstream.
Despite the significant increase of AI branding, marketing, and the omnipresence of Watson, Alexa, and Google and other AI integration into the Amazon shopping experience, the process of AI taking over the world is going to be a slow one. The digital native community, and the generations of consumers to come will know a world, where AI is seamlessly integrated into their daily lives, and be an inherent part of knowing who they are, where/when/what they shop for, and offer a personalized and customized experienced beyond our imaginations.
President, Protonik
AI experts tell me that what business is calling “AI” isn’t. It’s simply algorithms applied to business. And they’re yawning amid all the hype about AI.
Can AI transform retail? No. There are places where algorithms should be used to do good things. But now that we know big data isn’t going to deliver on the big promises, data people have renamed what they do AI. So remember, big data has huge potential risk (perhaps read the recent book “Weapons of Math Destruction” for examples where data analysis destroys far more than it builds).
What strikes me about the stories I read promoting the AI fad is it easily becomes an excuse not to do the hard work of retail — products, stores, logistics, inventory management, etc.
So let’s use data wisely. But also recognize it can only do so much — and we are still responsible for creating our own bright retail futures.
Contributing Editor, RetailWire; Founder and CEO, Vision First
New technologies change everything — AI or Cognitive Computing is a new era in computing that will permanently change the game for all industries and functions.
VP of Marketing, Bamboo Rose
Retail Transformation Thought Leader, Advisor, & Strategist
Anywhere there is data related to a business outcome derived from analyzing that data, AI will bring revolutionary change to processes. The key for retailers is that it is the processes that will be improved. Whether those processes are in marketing, merchandising, assortment selection, inventory control, etc. there will still be a need for a human element to relate on a personal level to customers. Retail has always been, still is, and always will be about customer relationships. AI will greatly enhance a retailer’s way to develop the relationship, but it will not replace the need for those deep relationships cultivating a loyal customer.
Co-founder and COO at Bold Metrics