Getting closer with AI

Sammar Farooqi from SAP explains how retailers can get closer to consumers with 5 key behind-the-scenes tech upgrades

The days of aimless window-shopping are over. Even when customers walk out of a store empty-handed, retailers now have the technology to turn hesitation into a sale, using smart data, personalized follow-ups, and seamless digital touchpoints tokeep shoppers engaged long after they have left the store.

Take the case of a hypothetical shopper who, after spending an hour trying on clothes at a luxury fashion retail chain’s brick-and-mortar store, departs without making a purchase. She does, however, leave with a fresh offer in hand for 20% off her next purchase, sent to her mobile phone moments after the sales associate who’s been helping her signs her up to receive text alerts from the brand.

From his tablet, the sales associate logs details about the customer into the system, including the items she seemed most interested in purchasing. The system itself is set up to automatically send a follow-up text to her in 48 hours, reiterating the offer. The offer arrives as scheduled, along with a link prompting the customer to make an appointment to return to the store for a one-on-one with the same salesperson. She sets the appointment, returns to meet with the salesperson, and purchases a few items in-store. Then, later that same week, she buys a couple more items via the brand’s mobile app, using a separate discount code she received upon downloading the app.

As scenarios like this illustrate, today’s retailers aren’t just reacting to customer behavior, they’re anticipating it, orchestrating seamless, artificial intelligence-powered shopping experiences that feel personal, effortless, and almost inevitable. The customer-facing apps and text messages that drive these experiences are just the visible tip of the iceberg. Behind the scenes, retailers are using digital infrastructure and intelligent capabilities to curate seamless, highly personalized journeys that get their products and their brands noticed by consumers.

You don’t have to be a massive global brand to get noticed. Withthe right intelligent capabilities, applied to the right data, you can understand your target customers and markets, and your own business, better than your competitors understand theirs, and turn that understanding into a real competitive advantage. Here are five areas where technologies like AI can vastly improve a brand’s ability to connect and engage with consumers:

Instead of pushing out blanket offers across broad swaths of customers, a retailer can send individually tailored promotions, via a person’s preferred communications channel(s). Having collected data on past behaviors and interactions (like items they put in their shopping cart but never purchased, for example), companies can make a customized offer to the person, which dramatically increases the likelihood they will complete the purchase. These offers can be informed not just by the internal data a brand has collected about a person, but also by data from external sources like social media, where, based on an AI analysis, posts and activity suggest a person is contemplating a furniture purchase, for example.

This multi-channel hyper-personalization strategy is proving highly successful for retailers like beauty products company Ulta Beauty in creating rabid enthusiasts and loyal customers for the brand.

The overarching priority is ensuring these AI capabilities, and the models that support them, are applied ethically and responsibly to customer data, with the right customer permissions and adherence to applicable ethical standards for privacy, transparency, etc. Consumers will avoid a brand if they don’t trust it is honoring the sanctity and security of their personal data.

AI models can predict the likely performance of a new product, suggest the right time for a product launch (plus the promotions likeliest to provide maximum impact around that launch), highlight the need for a certain product in a certain market, and alert a company to a surge in negative brand sentiment on social media.

Retailers like ALDO are using AI — and specifically generative AI — for “composable commerce,” where it generates timely, compelling and personalized product-related content in the moment, for a specific consumer in a specific channel.

By building capabilities in these five areas, retailers can transform how they engage with consumers, setting themselves up to thrive even as market dynamics and consumer behaviors change, often rapidly and unpredictably.