Every retailer wants a robust fourth quarter and high profit during the holiday shopping season. To help you get it, Persado brought Vipul Vyas, Senior Vice President, Go-to-Market Strategy at Persado; and Assaf Baciu, COO and Co-Founder of Persado; together with guest speaker Sucharita Kodali, Vice President and Principal Analyst at Forrester. This webinar focused on Generative AI retail strategies that are easy to deploy before the holiday season, the latest insights on retail trends, and how to get the most out of the Generative AI tools retailers already have in place.
Today’s retail industry
Sucharita began by assessing the state of retail today. “It may surprise people that many retailers continue to struggle while the overall economy is doing quite well,” said Sucharita. “What is very unusual about the last few years is that they’ve essentially been outliers, since inflation was relatively high, and unemployment was low.”
Evidence suggests that with essential categories (such as food) consumers may be either trading down or choosing not to lower their budgets entirely. “Quality and price continue to be the biggest drivers of why consumers purchase particular goods and why they choose to transact with these retailers,” said Sucharita. Consequently, value remains even more important this holiday season.
The last few years also brought unusual holiday season activity. Consumers did not purchase in categories like services or travel, which led to higher retail transactions. Supply chain issues also reduced the number of promotions retailers could make. In 2023, Sucharita expects that we will be back to normal (think 2019) with more competition than ever. She remarked that “retailers are competing with other places that consumers spend, like services, such as travel and offline transactions, that are not necessarily in retail locations or purchasing physical goods.”
How can retailers succeed during the holidays?
With the current inflationary environment, consumers remain anxious about getting the most value for their money. Sucharita made the following suggestions for retailers to increase sales in the fourth quarter:
- Find more opportunities to automate activities such as copywriting.
- Employ more self-check out lanes at brick-and-mortar locations.
- Promote private label items with higher margins.
- Uplift merchandise you know will drive sales.
- Make the most out of the assets you already have.
- Be creative with your loyalty program such as prepaid loyalty programs.
- Consider payment flexibility options.
“I would discourage retailers from giving away free money as part of your loyalty program because that often is something that just doesn’t necessarily generate incrementality, but instead reduces your margins,” said Sucharita.
How does AI fit Into the retail ecosystem?
Despite the recent hype about GenAI, AI generally is not new to retailers, who embraced it over 20 years ago. Sucharita began writing about recommendation engines in the early 2000s. These are some of the earliest retail use cases of machine learning. Another early AI example is live chat with a chat bot.
Sucharita sees promise in Generative AI retail strategies for automating imagery to personalize a search. “In apparel, for instance, the ability to switch out something that’s out of stock with an image of an available product could be very powerful,” she said.
Other online trends include chat bots that can carry conversations further and leveraging video in a more personalized fashion.
Most retailers rely on machine learning to optimize fulfillment, particularly where they route their orders and how to keep these costs low. “We see more investments related to camera vision,” said Sucharita. “With this technology, retailers can detect errant behavior in a factory or quality control abnormalities in a warehouse.” More companies also use facial recognition to better understand consumer sentiment and help reduce loss prevention.
Persado imprint on Generative AI
Following up on Sucharita’s comments, Vipul and Assaf turned to discuss Persado’s history as a leading player helping brands execute Generative AI retail strategies. Persado has over a decade of experience with some of the world’s biggest brands. Major retailers like Kate Spade trust the Persado Motivation AI Platform to deliver digital marketing messaging proven to drive conversions and fast ROI — including during the important holiday season. [Hear e-commerce leaders from Tapestry, Kate Spade’s parent company, talk about optimizing performance with Persado].
The Persado language model and our Generative AI engine is built on more than 10 years of enterprise communications, which includes:
- 196 billion impressions which helped train our language model
- 33 million different message permutations
- 29,000 years of equivalent A/B testing
- 1,000,000 words and phrases tagged to understand what words and phrases actually influence behavior.
Persado breaks down language into a multivariable equation and understands the components that influence behavior for different people. Check out the CMO’s Guide to Generative AI to learn more.
There’s still time for retailers seeking ways to boost their fourth quarter results to optimize campaign performance using Generative AI from Persado. Persado content motivates behavior, increasing critical performance metrics such as conversions and email clicks. Integrating it on your website requires very low lift and a fast turnaround, allowing your brand to see return within weeks — even days. Both our Dynamic Motivation product, which enables personalized messages based on session data, and Essential Motivation, our self-service GenAI solution, can be up and running quickly, delivering optimized content well before you start running holiday campaigns.