NRF Nexus, an exclusive event for senior leaders in technology, marketing and digital innovation, convened at the Terranea Resort in Ranchos Palos Verdes, Calif., July 10-12 for three days of examining trends in AI automation, consumer behavior and more.
More than 200 leaders across consumer goods, restaurants and other leading retail brands shared strategies on how to improve the customer journey and prepare for the consumer of the future. Themes in generative AI, personalization and easing friction were top of mind for leaders.
Generative AI drives customization and innovation
While we’ve been experimenting with intelligence through the internet, mobile and social media, generative AI offers a new human-centric intelligence that can spur creativity for retailers, bridging gaps that exist in connecting with customers, said journalist and podcaster Kara Swisher. According to IDC Vice President of Research Ananda Chakravarty, 87% have already deployed some form of artificial intelligence to their retail tech stack.
Retailers can power the consumer experience in both cost-effective and margin-effective ways using generative AI. As customer acquisition costs are going up, it has been effective in retargeting the “on the fence” consumer, said Amanda Hall, director of pricing strategy and analytics at Ashley Global Retail.
The retailer can determine which customers need a nudge and which offers like dollars or percentages off resonate most with the customer. Through real-time signals, usually by the fifth click of a customer’s session, Hall said Ashley Global Retail can determine whether a customer will bounce or result in a conversion. These insights can lead to less promotional, more personalized marketing.
Personalization is the customer expectation
When retailers discover what personalization means for their brand and how to evaluate success in an automated environment, they can grow customer loyalty, said Christopher Thomas-Moore, chief digital officer of Domino’s Pizza LLC.
Personalization might appear daunting when you have millions of customers, but the data can reveal which of those customers are driving sales, why they’re converting and how likely they are to become repeat customers.
Ulta Beauty is winning over the customer for a longer lifecycle through offerings like virtual try-on and AI-empowered quizzes that create personalized recommendations for customers seeking solutions to their beauty problems.
Generation Z customers expect very little separation between themselves and their favorite brands, said Constantine Gavrykov, global director of digital experience design at Adidas, and these relationships must go beyond transactions. True value must be represented in different ways. Because Gen Z is much less loyal than previous generations, Adidas must win them with every purchase, he said.
Zappos’ strategy is to segment customers, picking the most meaningful variables in their attitudes and behaviors. That’s rather than focusing on demographics, which offer “least actionable” insights, said Alex Genov, head of marketing insights and customer research at Zappos. Building customer loyalty “is as much about psychology as it is about technology,” he said.
Associates and stores ease friction
Consumers expect retailers to know when they’re online, in store and everything in between. The retailers leading in this integration are often the those selling needs versus wants, said Jason Goldberg, chief commerce strategy officer at Publicis Groupe.
Convenience is critical for Sam’s Club members, and the brand is working to create tech that will help reduce about 70% of the “mundane, routine tasks” like inventory management to free up associate time so they can better assist members. “Convenience is crucial to our strategy,” said Tim Simmons, Sam’s Club senior vice president and chief product officer. “You can’t really be member-obsessed and allow all kinds of friction and negative experiences to persist.”
Read the latest articles and insights related to artificial intelligence in the retail industry.
Consumers have always shifted digitally, especially when it comes to convenience. Retailers like Best Buy are looking for ways to not only offer services but serve up content to customers to add value that will drive brand loyalty so customers don’t have to think twice about where to shop first, said Jennie Weber, Best Buy chief marketing officer.
“If they know the product and they know what they want, digital will be their first choice,” Weber said. “They’re leveraging digital sometimes when they’re standing in the store.”
The crux of nourishing customer obsession lies within employee engagement, as store and call center associates are the closest to the customer and can offer the best tools when they ask the right questions. That can make all the difference for the customer. Testing different sales floor sizes, variety of merchandise and digital in-store solutions that allow customers to “touch, try and feel” is all a part of the storytelling that is Best Buy’s differentiator, and both customers and associates must be on board.
“You don’t know how it’s going to work for both customer and employee until you build it and put it to market,” Weber said. “If it’s not right for the employee, they can’t deliver an awesome experience for the customer.”