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Inside Retail & Adobe

AI linked to soaring revenues during holiday retail boom

(Source: Adobe)

Two years of unprecedented disruption to retail have brought us to a holiday season that’s sure to be dominated by e-commerce. Retailers who’ve spent the pandemic stepping up their digital game will enjoy the benefits of what’s predicted to be a lucrative online spend – with consumers emerging from the pandemic primed to do their holiday shopping from the comfort of home. 

This year, consumers are going to have higher expectations of their digital shopping experience, and retailers offering a more personalised service are most likely to meet those expectations. Online stores equipped with AI-powered features such as product recommendations and intelligent search will see a marked boost to business – the figures show increased revenues of up to 31 per cent for such features – and a recent Forrester survey has revealed that more than half of retail marketers are now using AI-driven personalisation across channels to drive loyalty and growth, considered especially vital this holiday season.

“Brands are having to rapidly accelerate their CX as our customers’ expectations continue to climb higher and higher,” observes Scott Rigby, who works as a chief technology advisor at Adobe serving as the firm’s principal product manager for enterprise solutions (JAPAC – commerce) and who is thoroughly versed in the firm’s AI solutions.

“To do that, particularly if you’re starting now or if you’re new to online delivery of services, products and customer experience, you need to be able to leverage AI to leapfrog your competition and stay competitive in a fast-evolving market. One of the biggest changes we’ve seen in our in-depth research into customer behaviour is that brand loyalty has eroded through the pandemic due to brands not meeting the needs of consumers at their time of need, and not pivoting quickly enough to be able to meet them in the channels that they prefer. Customers who may have been loyal to a brand for a decade or longer have tended to switch to a brand that can now meet those needs – more than a third of respondents to our recent digital trends survey reported that customers are less loyal since Covid.”

With advances in AI increasingly visible throughout the industry, customers’ expectations are growing with respect to the online shopping experience. Consumers now presume they’ll be recognised if they’re an existing customer – they want brands to know who they are and what types of products they like to purchase from them. At the same time, they want to be respected in terms of the data they share, expecting that their information will only be used to deliver better experiences. By incorporating AI tools into their online offering, retailers are far better equipped to navigate these nuances in consumer expectation – a capacity that’s going to be critical going into the anticipated holiday boom season.

“Adobe’s philosophy is very simple with AI,” explains Rigby on the challenge of implementing AI solutions into existing digital storefronts. “We embed it into the toolset and/or the process that our users have in place, and in a lot of cases, they aren’t even aware that they’re really using AI. To give you an example, if you want to add product recommendation using machine learning, it’s virtually a quick form you complete that defines your targeting parameters and the placement location on your site, and you’ve got out-of-the-box algorithms ready to go. You don’t need people in your business who have a PhD in mathematics or high-end dev architects to be able to deploy this kind of capability.

“The same goes for our data analysis machine learning – you don’t need high-end data analysts on your team to be able to identify interesting new market segments to go after. We actually have a reporting interface that can identify those audiences for you. Or maybe you’re doing some product photography and the backgrounds around your images are not brilliant – using machine learning, our AI intuitively knows what the background is, and it’ll highlight that and you can automatically remove it and have that product sitting on a more suitable background. These are all AI tools, but we’re actually making them very simple to be utilised by your average business user.”

Adobe’s long experience in AI has seen it crunching data on consumer behaviour for well over a decade, with prediction algorithms applied to forecast what the market uplift is going to be for every year’s holiday season. The firm’s report for this year – The Great Acceleration: 8 predictions for the upcoming holiday season – is now freely available for download in the interests of helping retailers prepare for an expected holiday boom at a time when it’s more pressing than ever to stay ahead of the digital transformation curve.

“Businesses that might have been mature even just five years ago are still struggling to keep up as new technology rolls out and new channels proliferate,” says Rigby. “Using AI effectively allows retailers to better capture the best quality of data in order to decide what’s the most effective offer message or service announcement that you want to put in front of your customers at what time and when.

“When customers engage, they go down a certain pathway; if they don’t, then that triggers a new pathway for them to see if they’ll engage on another channel. You can only take that kind of approach through the scalability of AI.”

Click here to download Adobe’s “The Great Acceleration” report.

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