Things haven’t been feeling great for consumers lately, and many of us are bracing for continued periods of economic uncertainty. Of course, the tightening of shoppers’ pursestrings directly impacts retailers in a number of ways.
After seemingly endless increases in inflation, supply chain disruptions, and an ever-looming recession threat, spending is expected to decrease, with people having less money for nonessential purchases. Customer loyalty is also expected to wane, as Women’s Wear Daily reports that 74% of people are trading down to shop with cheaper brands than they’d prefer.
Amongst what sounds like a lot of doom and gloom, we see the rise of AI, which offers retailers faster, more accurate, and cost-effective ways to list, market, supply, and sell products. There’s a ton of hype around the technology, making it feel like the big shiny tech obsession du jour, but it also offers a ton of promise. There are many AI solutions that solve smaller issues here and there, but the very best retail AI will integrate into multiple functionalities and improve outcomes across the entire retail operation. This is where AI’s retail promise during economic uncertainty lies.
Can AI Foster Connections to Drive Sales?
Artificial intelligence can bring humanity to shopping through crafting empathetic experiences that reflect the customer. Lily AI does this by injecting the language of the customer throughout the entire retail ecosystem, connecting people with the exact products they’re looking for. This helps drive sales, of course, but it also fosters brand loyalty by making consumers feel seen in highly personalized retail experiences.
Personalized experiences are critical to get right. 66% of consumers say they’ll leave a brand if they don’t receive a personalized shopping experience. Meanwhile, revenue increased by 90% on average when brands invested in digital customer engagement.
In those aforementioned metrics alone, we see a big opportunity for AI to impact profitability. Even beyond personalization and fostering brand loyalty, artificial intelligence impacts other areas of retail marketing, forecasting, shopping, and more.
Here, we dive into key ways AI boosts profitability across the entire retail chain, delivering real value during economic uncertainty with measurable, quantifiable results.
How Does AI Boost Retail Profitability During Economic Uncertainty?
Here, we dive into a few ways AI boosts retail profitability in a world where the only constant seems to be a future full of economic uncertainty.
Demand Forecasting
As one of the most critical parts of the retail process, merchandising teams can be assisted by AI to make stronger purchasing decisions. Lily AI’s algorithms analyze historical sales data, market trends, and external factors (like those economic conditions we’ve discussed so much) to accurately predict product demands.
This helps teams in merchandising departments optimize their inventory levels, reduce stockouts, and minimize excess inventory costs.
Personalized Recommendations & Marketing
Much like the brand building and loyalty fostering we discussed earlier, AI helps retail marketers create personalized campaigns that feel tailored to individual consumers’ preferences and behaviors. We can see this at play in product recommendations, which when done right, provides massive upsell opportunities. By analyzing customer data, AI recommends products that people are more likely to purchase. These are based on their own personal styles, preferences, and historic purchases.
Even before consumers reach your site, your Google Search efforts can be enhanced by AI’s insertion of customer-centric language throughout product details, landing pages, and your online store. Just as any classic Google Search operation works, more people are driven to your shop . . . but thanks to the supercharged pace and attribution details provided by AI, the net retailers cast with it is wider than ever before.
Super-Charged Search Systems
Continuing on the topic of enhancing the actual online shopping experience, AI-powered technology supercharges your on-site search. Because products are enhanced with customer-focused language—which includes product details like fit, texture, and closures, as well as timely trends and subjective synonyms—people can pin-point exactly what they’re looking for by simply searching for it on your site.
By using a combination of AI, large language modeling, and computer vision, Lily AI serves people the exact products they’re looking for. When using AI-powered on-site search, products will feel personalized and tailored to each individual shopper’s needs. Website usability is at its peak, and the right products are connected to customers quickly and easily.
Content Generation Saves Time & Enhances Productivity
While we’ve talked about driving sales thus far, we cannot neglect to mention that AI offers big opportunities for saving time and enhancing productivity. These savings can have a huge impact on retailers’ bottom lines, which is especially important during periods of economic uncertainty.
There are a variety of new, AI-based technologies available to retailers today, from those that assist with loss/theft prevention, to those that generate content that’s most likely to appeal to your own brand’s exact shoppers.
Lily’s AI-powered content generation writes product copy that’s consistently custom-tailored to your brand’s voice. It incorporates the actual language your customers use and resonate with, and the perfect mix of key terms highlighted in the right places to optimize conversions and sales. In addition to crafting connection-enhancing copy, our AI product description generator:
- Optimizes copy and keywords for search engines
- Reflects the latest, hottest, of-the-moment trends
- Bases its outputs on individual brand’s customer engagement and revenue data
Because AI can do this work in seconds, it saves creative teams tons of time and boosts their productivity. Errors in copy are reduced and optimized copy is online faster than ever before, so your products are enhanced for discoverability. These product descriptions are very customized as well, as models are trained on your brand and consumer data, which in turn means that the AI understands the exact types of products people are looking for on your site and how to most effectively connect consumers to them.
Use Retail AI to Take On Economic Uncertainty
While economic uncertainty certainly feels like the new normal, AI is the best solution to provide more stability to those within the retail industry by enhancing their entire value chain. That’s why brands like Bloomingdale’s, J.Crew, Living Spaces, and others rely on it to drive sales and success. The right retail AI solution, such Lily AI, connects customers to the exact products they want, while delivering upwards of 9-figure revenue lift.
From initial marketing, to predicting demand, to driving actual sales, AI technology helps brands stay afloat—and even grow—during times of economic uncertainty in 2024 and beyond.
