4 AI-Powered Strategies for Retailers to Convert Holiday Browsers into Buyers
This post is part of a sponsored series by IBM about holiday readiness.
The holidays represent the best time of the year for retailers to ring up sales as evidenced by a record $5 billion spent on Black Friday 2017 alone, representing a 16.9% increase over 2016. It’s the time of year where consumers are in the mood to spend.
Retailers look to gain an edge to win the holidays in a climate where competition for share of wallet is fierce and brand loyalty is difficult to maintain in the digital age.
As a B2B digital strategist, I thoroughly enjoy studying retailers during the holiday season to keep my digital lens sharp across the spectrum of buying habits beyond my usual focus on B2B buyers. More on that in my summary at the end of this article.
First, let’s look at four strategies brands can act on this holiday season to maximize the revenue potential of casual shoppers. You’ll notice some overlap among these four strategies as the bridge between in-store and digital customer engagement demands it.
Merge in-store and online shopping experiences to inspire loyalty.
Customers who make repeat purchases exhibit buyer behavior in their journey. This behavior can be leveraged to predict buying potential. AI-powered technology such as IBM Watson Customer Engagement can learn customer behavior from in-store and online activities, enabling brands to simplify the customer’s experience while personalizing it. Retailers who can eliminate long lines in-store can create an experience as hassle-free as the online shopping experience. One way they can do this is to equip in-store teams with mobile devices that check people out in the aisle.
Consider digital wallets. Using near field technology, customers can exit the store with merchandise in hand and the with the transaction automatically billed to their digital wallets. With this type of technology—which is prevalent in China—retailers can create an in-store shopping experience as convenient as the online experience.
Mobilizing in-store associates by arming them with mobile devices empowers them to help customers find what they need in the moment during the in-store visit. According to the IBM 2017 CEI Study, 79 percent of brands don’t have mobile-enabled associates nor do they provide their associates with mobile access to customer information. All it takes to disrupt a retailer’s customer loyalty is for a competitor to offer this convenience.
Keep your promise through on-time order fulfillment across all channels.
Any consumer will tell you that there’s nothing more frustrating than placing an order—online or in-store—and learning that the promised delivery date will not be met. The retailers who can tell the consumer—with a high degree of accuracy—about merchandise availability and delivery, are the ones who win more sales and increase the chance of sustaining customer loyalty.
In the annual JDA and PWC survey of retailers, just 10 percent of retail executives interviewed felt they’ve refined their Omnichannel delivery to the point that they’re able to meet demand and make a profit. Issues including returns, stagnant inventory and markdowns cut into profits. With AI tools, retailers can utilize inventory more profitably, and minimize carrying costs while limiting markdowns and unnecessary promotions. Use of fulfillment tools can optimize returns, utilize slow-moving inventory, and meet customer demand while clearing the way for the next season’s inventory in a streamlined and profitable way.
Retailers can take in-store showrooms one step further by allowing associates to use their mobile devices to gain access to all information about a customer online—personalized recommendations, size charts, warehouse inventory, customer shipping preferences, purchase histories and much more—all while engaging the customer in person. They can even use the data at their fingertips to engage, inform and impress tech-savvy shoppers.
Retailers must invest in IT innovation, from online to the store floor, to maximize the efficiency of the customer experience and maintain loyalty.
Deliver the personalized offer at the right time.
Perhaps the second most frustrating experience for consumers is getting product promotional messages that don’t align with actual interests. Contrary to popular thinking, consumers don’t mind getting relevant promotional messages. Those messages are actually helpful, especially during the busy holiday shopping season. Retailers such as Moosejaw Mountaineering use segmentation and targeting to increase email open rates. By using dynamic content to include images of abandoned cart items in the email, Moosejaw makes sure the email is both timely and relevant, capturing average click-through rates of over 35 percent and conversion rates as high as 5 percent.
Create a cohesive picture of the Omnichannel customer journey.
Consumers have more choices than ever. Choice enables the consumer to jump from site-to-site or app-to-app in their journey. Brands must gather data about the customer to gain insight into their path-to-purchase. Understanding what type of journey led to different purchase preferences and outcomes enables the brand to plan the most effective experience. Brands who leverage AI-powered tech to help shoppers stay on the path-to-purchase are better positioned to win customer loyalty.
The Omnichannel customer can follow many paths-to-purchase. She might research a product online and buy it in the store. Or, she might look at it in-store and then order it online for in-store delivery. Or, she might follow the entire buying process end-to-end online.
AI tools help create a strategy flexible enough to meet the needs of the Omnichannel customer, while controlling the cost-to-serve. Real-time sourcing tools make it possible to move returns and at-risk inventory, quickly scale production to meet surges in demand, and meet any change with immediate scenario-planning to determine the fastest and most cost-efficient options needed to address the buying behavior of the Omnichannel customer.
Lindt, the Swiss-based chocolatier has had an e-commerce presence since 2002. The brand sought to leverage technology in new ways to create a more personalized connection with customers and give chocolate lovers greater access to Lindt confections outside of specialty stores and outlets, through which the bulk of Lindt USA sales are driven. The new commerce site is a premium storefront where customers can experience the Lindt brand, as if browsing in a department store featuring all things chocolate. This includes a portfolio of up to 600 SKUs—virtually every size, shape and type of chocolate imaginable, including a wide assortment of the brand’s iconic LINDOR truffle. “The site allows us to engage with customers in meaningful, thoughtful ways, and to understand their behavior. We are a thoughtful brand. It is about the experience we create and the loyalty we build, not just sales,” Thomas Linemayr, Lindt CEO says.
Buyers are buyers.
This article summarizes my recent study of retail holiday reporting trends as a member of the IBM Futurist community. As a B2B digital strategist, this article is a reminder that all brands sell to people. While the journey, buyer dynamics and technology implementation methods may differ between retail and B2B selling, the common thread is that the buyer is in control across an Omnichannel experience. Brands that want to capture and maintain buyer loyalty must meet the Omnichannel needs of the buyer in the moment by delivering a relevant experience. This is as true for retailers as it is for sellers of enterprise technology to business users.