Why Retail Marketers Should Rely on AI, Data to Reconnect With Brand Growth
Are the widespread drops of in-store traffic inevitable or simply the reflection of a change in consumer’s behavior? The data resulting from the digitization of purchasing routes is an effective lever to reinvigorate shop traffic, as long as they serve the consumer. Therefore, retail marketers have every interest in setting up a strategy based on analyzing data to win back their customers.
A Strained Customer-Retailer Relationship
In an ever-changing world, retailers have not integrated consumers’ new buying habits. Consumers are evaluating and deciding online about their interest in going to a store. Confronted with the reality of drops in in-store traffic, retailers tried to reverse the trend by increasing marketing pressure. Hasty solutions have proven to be destructive for both profit margin and customer experience. Such a practice negatively affects the relationship of trust between retailers and customers.
In this regard, physical or virtual mailbox contents are indicative of the ineptitude of this situation. Not surprisingly, marketing campaign return rates are low. And this situation is not specific to distribution; all sectors of activity are concerned.
Today, consumers aspire to no longer be recipients of unwarranted advertisements. On the contrary, they wish to have a strong relational experience with a brand and be accompanied in their decision-making.
How can brands reconcile acquisition and retention challenges in this new paradigm?
Regaining a Merchants’ Role by Converging the Physical and the Digital
The digitization of consumption patterns has certainly made life easier for consumers thanks to new innovative services, it has undeniably made their buying journey more complex. In an omnichannel context, the merchants' role should evolve and adapt to these new uses, little remains understood and controlled by the brands, and they are still too numerous to operate in silos.
The digital and the physical must converge in favor of consistent customer experience and quality, throughout the purchase journey of each individual. To this end, artificial intelligence plays a key role in evolving from mass market and undifferentiated marketing to individualized, to recreate the link between brands and consumers.
Offering a New Purchasing Experience to the Customer
The advent of computerized services has given consumers the keys to learn, compare products and brands — at any given moment, no matter where they are. Combined with a growing demand for transparency, personalization, and proximity, today's customers bear no resemblance to their former selves, but are now marked with exacerbated requirements.
To this end, technology has paved the way for the creation of new innovative services, aimed at transforming the customer experience. From the emergence of chatbots, which facilitate contact with brands, to integrating applications in augmented reality to easily try out glasses or cosmetics from a distance, brands compete creatively to offer a new and enriched experience to their customers.
In addition to these new services, the digitization of purchasing routes has made it possible to collect a large amount of data from retailers, which is essential for customer knowledge and, by extension, for the personalization of services. Each consumer is unique, from their home to their preferences, to their previous purchases and mood. Each shopping journey is also unique. Through artificial intelligence algorithms, capable of analyzing and crossing all of these numerous data, customer knowledge enters a new dimension, passing from a macro level to a micro level: We no longer speak of "customer knowledge," but customer knowledge of each individual’s preferences.
Reestablishing a Long-Term Relationship With Each Customer
Thanks to this fine knowledge of its customers, brands are able to individualize the relationship with each consumer by no longer considering the person as a compact mass of individuals, but as a sum of different individuals. A key element to renew a healthy, sustainable, and ecological relationship.
Indeed, like the shopkeeper in the store, the data can detect the phase in which the consumer is. If the latter is in the inspiration phase, without the intention of buying, it will be useless to pollute the consumer with unwarranted messages. On the other hand, a consumer in the purchase phase will appreciate feeling accompanied and will be open to receiving messages adapted to their preferences. The brand then enters a more qualitative and respectful approach toward its customer: a valued effort, which also impacts sales figures.
Advocating for a Service-Based Use of Technology and Data
Today, and for several years now, artificial intelligence and its benefits have been making waves: better customer satisfaction, more precise targeting, savings ... And yet, few actors have started a process of transformation of their organization, which is necessary for the integration of these new technologies. Conversely, a minority of actors are precursors on these innovations.
Faced with the growing expectations of consumers, marketing services are often driving these transformations: The issues that create a successful customer relationship are major in these services. As retailers collect more and more data, it is urgent to invest in AI to exploit this resource and to return the favor to the consumer by no longer considering the person as a number within an opaque mass, but as a unique individual.
Related story: Why Omnichannel Marketing Is Better Than Multichannel