Why Retailers Need to Think About Using AI

As part of my job I visit a lot of online retailers’ websites and I am regularly greeted by various offers such as “10% Off Your First Purchase” coupon. These offers are generic and have become an expectation instead of an enticement. And that’s a problem, because part of the thrill coupon shoppers get from applying said coupon is knowing they got a special deal.

Amazon knows this. What is Prime Day but a giant festival for coupon shoppers where they are provided curated, time sensitive mega deals so they can feel they got the greatest deal of the year. Amazon puts a lot of money into artificial intelligence (AI) to be a leader in the field for a reason: they know leveraging data in retail brings home the big bucks. Their latest quarterly earnings are proof of this.

And how are the big, traditional retailers reacting to Amazon’s market dominance? By closing around 7,000 brick-and-mortar stores in 2017 with many more planned closings in 2018, according to CNN Money. Online retail continues to make up more and more of overall retail spending each year and the behemoth retailers of yesterday are struggling to find ways to compete in this new digital environment. Not for lack of trying of course.

The problem for traditional brick-and-mortar stores is finding a way to leverage all the data they already have and translate it into a more intelligent shopping experience. Unfortunately, they can’t just ask Alexa to do this for them. Retailers have to be proactive and begin leveraging the new solutions being developed that keep them competitive against Amazonian encroachment.

At Metrical, we use our proprietary AI to analyze a retailer’s customer data and help the retailer understand their different customer segments in real-time. Knowing and understanding these different customer segments allows retailers to leverage our tool to create more personalized messaging for their customers, thus increasing conversion rates and building brand loyalty.

For example, one our customers was able to use Metrical’s Cart Abandonment Reduction Technology (CART™) to identify a segment of customers with large cart values and a high probability of abandonment. Our customer  was then able to utilize the customized messaging feature of CART™ to provide their abandoning customers with a specialized, time-sensitive offer to convert them to buyers before they abandoned. The results? An astounding 10.7% decrease in cart abandonment for that customer segment, resulting in a lift to revenue of more than 10%.

Larger retailers with a more varied inventory are going to attract a wide range of potential customers with various behaviors. Being able to better segment and understand these customers and their shopping behaviors will allow retailers to create a more curated approach for conversion. By intelligently targeting content, retailers can acquire more first time shoppers and build brand loyalty with them and their existing clientele.

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