The retail sector continues to be hit hard by the ongoing cost-of-living crisis. As inflation remains stubbornly high, prices continue to rise, and hard-up Brits no longer have the same levels of disposable income that they enjoyed pre-pandemic.
According to the latest available data compiled by the ONS, "Around two-thirds of adults in Great Britain (67%) are spending less on non-essentials in response to the increased cost of living" while "over half (53%) of adults were shopping around more."
The decline in sales is hitting retailers hard. Earlier this month, it was announced that Wilko is the latest high-street brand to fall into administration.
As retailers scour to find ways to improve efficiencies and make financial savings, AI could be the answer.
AI isn't about replacing humans with robots.
There is still huge scepticism over the growing influence of artificial intelligence and automation tools. Perhaps Hollywood is to blame for visions of robots taking over the world and replacing humans.
Regardless, we firmly believe that current AI technology will play a key role in the evolution of digital retail.
We've previously written about how ecommerce chatbots are empowering retailers and how ai technology is improving customer service.
Integrating AI into your ecommerce strategies is about redefining how you work. It's about understanding how and when to use automation and AI to speed up your efficiencies so that you can use your time more effectively to amplify the customer-centric experience quickly and easily.
Google is flooded with content about how AI is revolutionising retail, along with predictions for what the store of the future could look like. Technology is changing so quickly that any potential opportunities could soon become obsolete before many retailers have even had the chance to install them in the first place.
But while some retailers are reluctant to invest in AI platforms or plugins, fearing that the cost of investment is prohibitive, the reality is that a continued fall in sales could be seriously harming your bottom line.
Therefore, investing in AI tools and benefiting from their increased efficiencies could be essential to your business's survival.
How to take advantage of those efficiencies
Using AI effectively isn't just about streamlining processes.
It's about using technology to proactively support your customer's journey along your sales funnel.
When we think about AI, we think about the context that it can be used to benefit the end consumer and the retailer.
Today's savvy shoppers will know when AI is being integrated into systems, and a bad experience could lead them to walk away.
Every technical integration needs to be carefully thought through from the customer's perspective.
Is it helping them to benefit from a dynamic shopping experience?
Is the use of AI increasing personalisation throughout the shopping journey?
Have all customer service needs been met?
Have you elevated the experience to convert that shopper into a brand advocate?
When handled correctly, using AI will naturally improve the customer experience from start to finish. Not only will this convert more visitors into paying customers, but the increase in sales will provide a positive ROI against your initial investment and improve your bottom line.
Improving internal efficiencies vs enhancing the customer experience
It shouldn't be an either/or choice.
Any investment into AI should simultaneously improve the customer experience while aiding internal efficiencies and boosting productivity.
This may sound like a unicorn, but it is possible, even for retailers with smaller budgets.
The explosion of AI plugins that can be integrated into mainstream eCommerce platforms like Shopify or Salesforce means that almost anything is possible. As we see more retailers moving to a composable commerce solution, we can anticipate that there will be a greater choice of AI tools and plugins that will make AI accessible to all.
Whether you're looking for an AI tool to help you with front-end or back-end improvements, many options on the marketplace will seamlessly improve your customer experiences and your internal efforts.
Examples of AI integration into front-end operations
If we want to advocate for AI to become a staple of any retail operations, let's explore the options available that will directly improve your customer experiences.
Content Generation for Product Descriptions
Manually adding product descriptions to your website is a lengthy process. If you continually add new items, automation can help you streamline this task, freeing up valuable time.
With AI, you should focus on more than just speed efficiencies. Instead, you want to be able to maximise your product descriptions so that it helps your customers to make informed purchasing decisions.
Bringing AI into your system can help you generate detailed and engaging product descriptions while seamlessly incorporating user-generated content into your descriptions. With the automated integration of customer product reviews and social media imagery, you can quickly improve the customer experience by setting clearer expectations from the outset.
AI can also be used to scale up your business and help you expand into other territories. With careful programming, you can easily translate your product descriptions into additional languages.
Beyond this, if your front-end content generation aligns with your wider supply chains, you could also use AI to clarify delivery timescales. This is essential if you are drop shipping items from other retailers and are not reliant on your own delivery services.
3D Product Imaging needs to serve a purpose
In our whitepaper, Bricks and mortar stores vs online retail, we delved into customer expectations relating to CGI and rendered imagery. Customers told us they are not averse to artificial imagery as long as they serve a distinct purpose.
And that's the crux of any AI integration.
It needs to be there for a specific reason, whether that's to improve your internal processes or to aid the overall customer journey.
AI imagery is getting better by the day. The growing scope of these technologies means you can create images that are personalised to the customers' exact specifications.
For big-ticket retailers, you can use these AI tools to allow customers to visually see how an item may look in their own home. Rendered images of personalised choices (such as sofas or furniture items) have been mainstream for many years. But we're starting to see these tools integrated into other retail sectors.
Thanks to 3D-generated product images, customers can interact with products in new ways. They can understand the product's features and textures and get more accurate views of the product dimensions. If you're looking to create a customer-centric experience, this is essential to aiding informed purchasing decisions while having the additional bonus of potentially reducing your return rates.
Linking your Virtual Commerce Assistants with your customer service dashboards
Many plugins allow you to focus on customer service interactions, ensuring that your shoppers receive the best experience possible.
But while AI chatbots are there to help, it's essential to continually review the services to ensure your customers receive the help they need.
AI-driven virtual commerce assistants can help you engage with customers in real-time, answering their questions and directing them to further support where needed. When intertwined with your personalisation strategies, you can use AI to upsell relevant items to customers based on their purchasing history and guide your customers through the sales journey.
But for your virtual commerce assistants to work, they must be heavily aligned with your customer service dashboards. It's not enough to use AI to answer basic queries. You still need to have the human touch. You can free up your sales teams or customer service representatives to deal with more complex tasks by automating the more minor customer service questions.
From there, to make the most of your AI, you must actively use the data you generate through your virtual commerce assistants.
Regularly reviewing the questions and comments left by customers could allow you to make data-driven decisions that will improve the shopping experience. For example, suppose your customers are repeatedly asking the same questions. In that case, your CRO team can use that data to troubleshoot those problem areas. With the insights gleaned through your AI plugins, you can significantly improve conversions and generate sales.
29% of shoppers believe that online shopping misses the ability to talk to a human rather than an automated chatbot.
Are you offering customer-centric search experiences?
Customers are notoriously fickle. They will spend just a few minutes searching for a specific item before looking elsewhere. Throughout your conversion optimisation campaigns, you'll naturally be looking at how to deliver a customer-centric search experience. But how can you use AI to your advantage?
AI has become essential to any search experience. The growing use of natural language processing (NLP) to understand crucial keywords and phrases is helping to find and deliver relevant search results. You should strive to find the meaning and intent behind search terms and understand how language barriers or informal phrases affect search capabilities.
Retailers can use AI to align search queries with personalised account information to gain detailed insights into search intent. By understanding the customer's past search behaviour, previous purchasing history and personal preferences, it's possible to enhance the search experience to give the shopper exactly what they are looking for.
Almost a third of all shoppers have admitted to browsing a website online, with the sole intention of completing their purchase in-store.
For those looking to amplify the omnichannel experience, using AI to understand the intent behind the search could be vital to boosting sales.
Customers today are increasingly searching and browsing websites for inspiration, as much as they are transactional sales. Therefore, using AI to understand the intent behind each search could be just as crucial to your content marketing or social media teams as it is to your sales department.
Examples of AI to support back-end operations
The examples of AI integration we've just discussed focus heavily on your front-end, customer-facing activities.
You're probably more aware of the growing use of AI to streamline your internal processes and boost your productivity and internal efficiencies.
If you are investing in AI, you must be clear that it is not a direct replacement for your staff. Instead, it's about simplifying and streamlining activities, freeing your staff's time to focus on other areas of your business development.
AI can streamline various operational processes for eCommerce retailers in many different ways, including (but not limited to):
Supply Chain Optimisation
AI can predict demand patterns, optimise inventory levels, and predict potential supply chain disruptions. This minimises stockouts and overstock situations, resulting in better inventory management.
For retailers, this is a win-win.
You can reduce any product wastage, improve your profit margins, and provide demonstrable support for ongoing sustainability pledges.
Workflow Streamlining
AI can analyse your workflows and identify potential bottlenecks throughout your entire business. This allows you to improve and adjust your process efficiencies and review data to see where you can improve.
Product Development
AI can assist in designing and prototyping products by reviewing market trends and customer preferences.
Of course, this is only possible with the right data in place.
While historical trends are important, you want to ensure you continually look ahead to the next big thing.
As tempting as it might be to automate product reorders, you need an experienced person to overview your automated decisions to cope with changing trends and new product demand.
But when handled correctly, your AI can use your data analytics to bring new products to market faster and with a better understanding of their target audience.
Personalised Marketing
If you're seeking a customer-centric shopping experience, then personalisation is critical.
Your marketing teams are likely already using AI to deliver personalised marketing strategies. Thanks to standard plugins, it's now easier than ever to provide tailored product recommendations based on previous purchasing history, special discount offers or time-limited promotional offers.
It might seem daunting to introduce AI into your back-end systems. After all, working with something new can seem scary and overwhelming, especially if it’s replacing a task that you’ve always completed manually.
It's important to remember that AI is still relatively in its early stages. If we continue to see the rate of improvement continue, we'll see even more innovative AI tech emerge in retail.
The best thing you can do is to keep yourself informed of the latest developments, identify where exactly AI can help your business, and find ways to adapt in the meantime.
Once you decide to leap into AI, partnering with forward-thinking solution providers will empower you with a competitive edge in a challenging retail landscape.’
Are you ready to find that AI unicorn?
Your investment into artificial intelligence isn’t about choosing between customer improvements or internal efficiencies.
With the right choice of AI plugins and tools, you can seamlessly deliver both.
It excites us that we have now the digital capabilities to truly transform the retail sector and deliver dynamic shopping experiences.
These programmes and plugins are not about replacing humans with robots.
Nor are they about simple automation.
Instead, these resources are here to maximise your short-term wins as well as aid your long-term strategies. Not only can you deliver better customer experiences (which will naturally lead to improved conversions and sales), but you can bring new products to market quicker, reduce wastage and significantly improve your profit margins.
In a few years, the tools we’re excited about right now will be so commonplace and mainstream, we won’t even bat an eyelid - ultimately achieving true digital transformation.