It’s that magical time of year when people everywhere come together amongst the twinkling lights and Christmas tunes and remember just how wonderfully… horrendous shopping can be. If you’re reading this article, chances are it’s a welcome relief from the alternative (a department store) or you’re scarred by your first foray into the nation’s high streets. If you’re like me, every year you tell yourself that next year you’ll do it all online. But old habits die hard, and once again, we will find ourselves deploying a combination of well-thought-out online shopping and the frenzied last-minute dash to John Lewis.
This week everything comes to a crescendo as shoppers mobilise en-masse for Black Friday, which seems to have become the starting gun for the annual epic Christmas shopping extravaganza. Beginning in the US, when retailers noticed a sales spike on the first Friday following Thanksgiving, since 2005 Black Friday has routinely been the single biggest day for retailers stateside. More recently, other countries have followed suit. In the UK last year consumers spent £5.8 billion over the four days between Black Friday and Cyber Monday according to the Centre for Retail Research.
While the opportunity to benefit from a spike in revenue is huge, this highly competitive world can be a retailer’s nightmare when it comes to predicting and capitalising on consumer behaviour. One moment a shopper could be online casually browsing TVs, aftershave or Peppa Pigs. The next, they’re in a store shouting “WHERE ARE THE SNOODS!?”. It’s hard to keep up.
It’s estimated that most digital users, create around 700 megabytes of data each day. Over the course of a year, that’s a pretty sizeable digital footprint that includes information about who we are, as well as what products we prefer or avoid. It’s more than enough data for retailers to know when consumers are most likely to be in the mood to make a purchase and what’s likely to convince us. But all this information is useless without the right technology to organise it into something meaningful. For larger retailers who count their shoppers in the millions, it’s impossible for any human to process the amount of data created by all its customers and make it actionable. And don’t forget, it’s not just digital attributes and data points. Retailers have been collecting customer information through CRM, loyalty cards, checkout transactions and email addresses in-store for decades now. Many are wondering how anything can be done with it.
Advances in technology, specifically artificial intelligence, are painting an entirely different Christmas scene, to that of irate shoppers marauding through our towns and cities. For the first time AI is making it possible to predict the potential of every online moment for a prospective customer so that retailers can finally utilise oceans of data to deliver relevant offers and ads to the people who are most likely to act on them - and all without them having to leave the house. For example, with AI-powered, predictive marketing, we can analyse millions of data points in real time to identify who will want a product, when they will be most likely to buy it and the creative or offer that will convert them at that moment.
AI also gives retailers the opportunity to make each moment throughout the customer journey more effective and engaging. By combining the functions of media and creative, and optimising these across all channels, it becomes possible to predictively tell stories that are most relevant to each individual and create more compelling, personal, relevant brand experiences. And that can make all the difference to retailers competing for consumers’ elusive attention this Christmas when they’re more interested in creating an Elf Yourself greetings card.
Research has found that personalisation in retailing can boost sales by 15 - 20%. In a recent survey by Harris24 commissioned by Sizmek, Almost half of those surveyed (49%) said they would be more likely to engage with a digital ad for a Black Friday deal if it was personalised to their preferences, featuring brands or products they are interested in. This figure rose to 73% among those aged between 18 and 34. Given how competitive retail is right now, that boost to revenue could be the difference between a bleak Christmas and survive the January slump to sell Hatchimals to crazed last-minute shoppers next year.
When it comes to digital advertising, implementing AI is no longer optional. It should be on every organisation’s Christmas list for increased efficiency and marketing ROI in 2018. In order for retailers to survive in a very crowded, competitive market (and for the collective sanity of the nation’s shoppers), it’s time we made use of the data we’ve all been adding to our wishlist for so long. Not only will this enable brands to increase online conversions and access unprecedented levels of insights, for the consumer it means better experiences, more personalisation and ads that are welcomed - especially when you’re trying to find that gift for granny, sister, dad or daughter. Speaking of which, can someone tell me what a Snood is?