If the first half of this decade centered on big data, 2016 has been the year of artificial intelligence (AI).
Investments in AI havetripledsince 2013, with AI-focused companies earning nearly $1.5 billion in equity funding by mid 2016. As AI finds its financial legs, there's little doubt that advancements in this technology will change the retail experience as we know it.
One of the biggest improvements will come with increased personalization capabilities. From tailored product recommendations to real-time price sensitivity, AI enables retailers to transform big data insights into actionable enhancements throughout the consumer experience.
However, the ability to customize digital touchpoints comes with its challenges. Namely, companies must create a cohesive user experience (UX) and implement data-driven innovations that are seamless across all channels.
How to take advantage of AI capabilities
The amount of consumer data available today is great for brands and retailers, but it can also be overwhelming. That's why AI will be so important moving forward. The technology can sort through massive data pools, spot trends and tailor any user experience to specific customer needs.
But much of this is old news. We know that AI-driven personalization efforts can dramatically improve the company-customer relationship. What remains to be seen is if companies can incorporate this data in a way that maximizes sales without alarming shoppers.
New technologies make it easy to gather millions of data points, but how do you then architect the digital framework to create a seamless relationship with shoppers across all platforms? Mobile and desktop; push notifications and email marketing -- there must be a holistic experience no matter the platform or interaction type.
The personalization revolution happening online is not so different from call centers. No matter who you call or when, all customer services representatives from a company should answer your query with the same information. That is the expectation of a call center as well as the social contract businesses enter when interacting with shoppers.
The same goes for all touchpoints across a company's digital user experience. Uniformity is king, and AI capabilities will push shoppers toward disengagement when plagued by inconsistencies. Data-driven insights may come first, but unification must follow close behind.
For example, a consumer who is browsing a retailer's website for black handbags may be receptive to content that is tailored to her search history. However, if she's been browsing on a mobile device, but then chooses to purchase on her desktop computer, she will not be open to continuous email recommendations for black handbags.
A unified experience must recognize this shopper across all her devices in real time and use her previous behaviors to recommend new products, such as a pair of shoes to go with her new bag.
The future of AI personalization
To better understand where AI is taking us, consider Amazon's Alexa.
Currently, Alexa uses speech recognition and keywords to perform various tasks ranging from placing online orders to providing weather updates. For example, if a user asks Alexa for Chinese food recommendations, the technology combines geographic information with restaurants the user has engaged with in the past to offer a suggestion that is nearby, open and consistent with previous behaviors. This innovation certainly demonstrates the power of personalization, but it merely scratches the surface of what AI can do.
Let's consider this scenario again. A user asks Alexa for Chinese food recommendations, and during the exchange there are voices in the background. Based on this context clue, Alexa may determine that this order is for more than one person and can suggest a restaurant with family deals or group specials. Or, Alexa may be able to monitor the user's tone to deduce agitation. If this is the case, Alexa could encourage the user toward a restaurant that is known for speedy service, recognizing that agitation often indicates impatience.
These are just two examples of how AI can supercharge the digital user experience moving forward. The possibilities are endless, and marketers can apply them to any search function or transaction. Sentiment will dictate how AI informs future interactions, and when married with contextual information like environment and time of day, it seems as if companies can personalize UX down to the very moment it happens.
The only limiting factor here is the general public's level of comfort with a customized experience. The ability to deepen digital personalization exists, but the trend cannot outpace consumer's desire for it. When this happens, companies risk being perceived as ‚Äö√Ñ√∫creepy,‚Äö√Ñ√π upsetting shoppers and losing them for life.
But the trend is growing, and companies must prepare for full-fledged receptivity to AI. For some companies, this means doubling down on AI capabilities and ensuring that the evolution of AI is consistent and communicative across all user touchpoints. For other companies, embracing AI will require a top-to-bottom digital transformation that first incorporates data-driven innovations in order to unify experiences fully.
Either way, preparing for AI advancements starts now.