Artificial intelligence (AI) is ushering in an exciting new era for retail marketing and customer engagement, according to Jake Cohen, VP and head of Shopify at Klaviyo. 

“Everyone’s talking about AI and what it can do; no one’s seen it work yet. Because it doesn’t yet work in all the ways that it will,” he told Amie Larter, CEO of Inside Retail’s publisher Octomedia, in a podcast recorded during Shopify in Las Vegas last week.

Cohen says Klaviyo – an intelligent marketing automation platform – is using AI to ‘learn’ customer behaviour across millions of transactions within the 160,000 customers it has worldwide. This will help the company use AI to drive autonomous campaigns and marketing executions in the future. 

By applying the learnings to marketing and service experiences, a marketer can see the history of what’s happened and use that to predict what a customer is most likely to do next. 

“To do that, you need data – all in a place that you can read it and pre-compute what might happen.” That’s Klaviyo’s sweet spot: Data unlocks activity. But there is much more to come, promises Cohen. 

“As a marketer, a business owner, or a customer service leader, what you’re thinking about is, how do I deliver on people’s expectations, and then push it further? You’re always thinking about what’s next.”

He predicts a near future where autonomous tools take care of the things that are a little more rote and a little bit more known. He cites a brand launching a new product line as an example. One might update all of the product listings, plan a campaign to let past customers have first access, and ensure it is added as a recommended item online to people buying complementary items, so it is there when people come back looking for ideas. Today, that might take a team of 10, three and a half months to figure out, but Cohen says 90 per cent of that process could be automated. 

He explains that once the new SKU is known, you have the pictures and the copy, so you should be able to generate the copy for the messaging automatically. You should be able to orchestrate when it goes out automatically. You should understand which audiences receive which versions of that automatically. You should be able to generate ads from it and target the correct people automatically. You should be able to prioritise that recommendation automatically. 

“And you shouldn’t have people do that – it should be a button. That’s where things are going. That’s what we’re working on. That’s what I think business owners, marketers, and retailers can expect in the next three to eight years, depending on how much of that they want to do.”

Meeting the expanding expectations of consumers

According to Cohen, understanding customers is a challenge businesses have faced since Roman times. 

“The reason it’s been falling short is – if you take a step back – two things have changed over the past 15 years,” explains Cohen. “The first thing that’s changed is the ability to track interaction. The creation of data has flourished. Since the boom of big data in the early to mid-2000s, there has been an expectation that you can track, measure, analyse, and then use anything that happens online as insight to inform an action.

“The second new thing is that consumer expectations have gone so much higher, because we’ve taught them as a society that you don’t have to wait, that you don’t need to enter your information again online, that people should know who you are. 

“So the confluence of these things means I have a lot of information I have to understand, and I’d better understand and use it well or I’m going to lose my customer if someone else does it better.”

An underlying data platform will unify all the relevant transactional, customer, and interaction data into a single place. On top of that, says Cohen, are three buckets of applications: Marketing, analytics – showing what is working across your marketing execution – and service, which Klaviyo believes starts as soon as someone expresses an interest in your brand, not after they place an order. 

“There needs to be better tools to manage that whole lifestyle. That is Klaviyo’s B2C CRM, data, plus marketing analytics and service.” 

The real wins for retailers, explains Cohen, will be reduced costs and more agility, which translates to more growth and better consumer experiences. 

“That will translate to less customer churn, which turns into growth. 

“Have you ever had this experience where you bought something, say some shoes, and next thing you know, you’re on a website and there’s an advertisement for the shoes you just bought? Then you go onto the website, and there are a bunch of shoes of different colours than the ones you just bought, and you’re like, ‘Hello yesterday, get me out of here?’” An experience like that deters consumers from shopping with that brand anymore because they’re not being empathetic to their needs. 

“Because Klaviyo can take in the transaction information and give you suggestions or tools on how to treat specific customers, you can prevent those bad experiences from happening. Instead of showing the shoes, you might see pants or belts that match.”

Listen to the podcast and learn why consumers don’t want to talk to someone to solve a problem with a retailer online, as well as further examples of how AI can enhance B2C communications and service.