How AI will revolutionize the world…and retail marketing

AI is emerging as a driving true platform shift that will redefine and enhance many aspects of our lives. Retail is no different and will continue to be defined by the depth of the relationship between the brands and their customers. Emerging applications of AI will allow for unprecedented opportunities to redefine that relationship and deliver tools to merchants to ideate faster than ever. 

By harnessing AI’s potential, retailers can build stronger connections through highly relevant recommendations, customized promotions, and tailored communication. Brands that fail to adapt risk losing customer mindshare as shoppers come to expect experiences attuned to their individual preferences. Brands that embrace this AI-powered approach will thrive in an increasingly personalized retail landscape. 

Tailored messaging that resonates

Generative AI unlocks the ability to produce customized content attuned to individual interests, needs, and contexts. Retailers can leverage these capabilities to deliver tailored promotions, recommendations, and messages that feel relevant to each customer’s lifestyle. While generative AI will allow marketers to tailor messages to customer cohorts without writing endless copy, predictive AI will facilitate granular audience segmentation of those customer cohorts and targeting to ensure communication aligns with the preferences.

Predictive intelligence informs timely intervention

Leading retailers have tapped into AI’s predictive powers for some time now, forecasting key behaviors like purchase affinity, churn risk, and more. But predictive intelligence allows more than just forecasting. It enables prescription too. Retailers can surface insights on customers likely to churn and prescribe relevant retention offers or other timely interventions.

Combining predictive analytics with the synthesis capabilities that generative AI enables a whole new approach to marketing. Instead of defining every element of every message in every campaign, the marketer can be the conductor or the orchestrator defining the broad strokes of the campaign but letting generative models interlace with predictive analytics to create 1:1 symphonies—hitting the right notes for the right customer at the right time.

AI-powered personal shopping

LLMS like Claude and GPT-4 foreshadow the next phase of AI-driven retail engagement. Customers will soon interact with trusted digital advisors intimately aware of their preferences thanks to full histories of their online behavior. These AI-powered personal shoppers will provide tailored advice as though they had years of experience catering to each individual; with full knowledge of every aspect of the retailers’ operational environment. Allowing merchants to serve customers’ needs while also maximizing the business outcomes they are looking for. 

And, if we want to play this out even further, we’re already seeing agents acting on behalf of customers: one day a merchant’s AI-powered personal shoppers will interface with a customer’s agent representative to deliver true autonomous serendipity.

The bottomless potential across retail

We’ve only scratched the surface of AI’s potential. We’re already seeing diffusion-based models generate lifestyle product images, and AI-based modeling agencies, but we haven’t seen these tightly coupled with optimized outcomes and deep knowledge about individual customers. Creating ensembles of models with business-oriented optimization functions is the near future.

AI will redefine brand loyalty

As AI transforms personalized engagement, it will also redefine brand loyalty. Retailers that leverage AI to create consistently delightful, hyper-relevant experiences will earn enduring customer allegiance. We’ve already seen this with onsite merchandising companies like constructor.io. And, shoppers will come to see AI-powered assistants as trusted advisors that understand their needs better than anyone else. Forming these intimate digital relationships through AI will foster brand loyalty that transcends fleeting discounts or promotions.

The future of retail will be defined by the depth of each brand’s relationship with its customers. AI represents the key to unlocking truly personal connections at scale. Retailers need to start testing AI capabilities now to prepare for the hyper-personalized future ahead.