Artificial Intelligence AI Can Improve Brand Loyalty
- August 15, 2017
- Brand development
A majority of companies live in the digital shopping and e-commerce space, catering to retailers that are using AI [Artificial Intelligence] to improve customer shopping experiences. While retail applications of AI might not grab the headlines like self-driving cars, it will be just as impactful, affecting almost every retail purchase decision that a consumer makes.
AI will allow retailers to build an incredible level of customer loyalty. The three most common ways will be through individual segmentation, real-time communication, and personalization. Used tactfully, these techniques can help brands transform shoppers into lifetime consumers.
Amazon and Google use a simple form of AI to curate product recommendations without needing human intervention. This is called collaborative filtering. A more advanced form of this is individual segmentation, where brands create profiles based off of behavioral shopping habits that can be maintained at scale.
Here a brand will use AI to collect and maintain the data from customer decisions over the span of a few years and make recommendations based on that information. The more data a brand has on a customer, the better it can predict his or her wants and needs. Over time, brands using this AI will have so much information about a customer, their recommendations will be nearly perfect.
Kevin Kelly, Author of The Inevitable, writes on the above topic, stating: “The longer you are with a service, the better a brand gets to know you; and the better it knows you, the harder it is to leave and start over again. It’s like being in a committed relationship. Naturally, the producer strives for this kind of loyalty, but the customer gets many advantages for continuing as well: uninterrupted quality, continuous improvements, and attentive personalization”.
Brands will use AI to communicate with customers in real time. Our appetite for speed is insatiable. The cost of real-time engagement requires massive coordination and degrees of collaboration that were impossible a few years ago. Now that most people are equipped with a smartphone, entirely new economic forces are being unleashed.
Many companies are planning to use geolocation services that will alert customers, inside or nearby a store, about sales or discounts on products based on previous shopping decisions. This real-time outreach could help guide customers throughout the shopping journey, making a store visit highly personalized.
Macy’s has already experimented with real-time in-store communication. They have opened a text service where customers can ask an AI bot questions while they shop. The bot can tell you where the closest restroom is or what floor a certain department is on, making it easier for customers to find products and navigate their way through a store.
Brands intend to use AI to help personalize the shopping experience for customers online and in store. Because AI is great at collecting data and working in real time, it will soon be possible for a completely personalized, connected shopping experience.
Online retailers that sell many products will be able to identify what a shopper is looking for and taylor the website to fit his or her needs. The online store will constantly adapt, making the shopping experience near effortless.
The North Face is already using this technology. Powered by IBM’s Watson, the expert shopper prompts you to answer questions about an article of clothing like “where and when will you be using the jacket?”. After answering a few questions, the AI program makes smart suggestions based off the information you submitted.
The ability for a brand to narrow down product options to customers in an intelligent way could help improve brand loyalty. Often, the biggest obstacle in purchasing something is having too many options. If AI can alleviate burdensome decision making, both the customers and brands win.
It seems the future vitality of brands will weigh heavily on a company’s willingness to adapt AI. Used creatively, AI can win loyal customers, track their data, and personalize their shopping. These benefits, combined with human guidance, could make the difference between a timeless brand, and a one-hit wonder.
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