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Why the time is right for AI marketing in retail
By Heath Barlow, Australasia Market Lead, Emarsys
Right now, we are at a major tipping point when it comes to artificial intelligence (AI) as more and more organizations and industries experiment with how to use the technology for business gains. Until recently, AI was viewed as promising technology but one that only technology companies could invest in and benefit from. Now however, AI has been dubbed a revolutionary engine – a technology that is here to stay and is increasingly essential in any modern environment – from marketing to finance.
Recent research, commissioned by Emarsys with Forrester Consulting, sought to shed some light on the adoption of AI for marketing purposes within retail and e-commerce. Specifically, it investigated the gaps between the readiness of AIM solutions to execute on real-time B2C marketing campaigns, and the readiness of marketing technology users and business decision makers to adopt AIM technology. Here are the most important takeaways:
1) AIM Drives Revenue
In the study, the number one objective that businesses want to achieve with AI is to drive revenue growth, followed by better serving existing customers and meet rising customer expectations.
AIM has been recognized as a method for driving revenue thanks to its ability to engage with existing customers in more meaningful ways than ever before. In fact, SailThru has estimated that if a company can increase its retention rate by as little as 5 percent, profits can increase to anywhere between 25 - 95 percent. While the greatest amount of revenue comes from engaging present customers, AI also allows marketers to more accurately target prospects and bring in new business.
The revenue-driving power of AI has not gone unnoticed. With over three quarters of the organizations polled stating that they plan to bulk up their budgets for AI technologies by five percent or more in the next year. The good news is that the industry is moving beyond buzzwords and hype to a tangible AI solution.
To Be Successful Today and Well into the Future, Marketers Must Leverage Their Greatest Asset— Data
2) AI Provides Best-in-breed Targeting
Targeting the right audience is an elemental foundation of marketing. However, this has become more challenging over time due to the sheer volume of data available to marketers which has made accurate segmentation increasingly more challenging. With an AI-powered segmentation engine, marketers can go beyond collecting data through automated segmentation and communication, to create more effective, highly personalized interactions. This, in turn, improvesresponse rates, reduces costs, and generates higher marketing ROI.
The study found that one of the top five ways that companies want to use AI is for better targeting of appropriate prospects and better communication to existing customers.
3) AI Improves Decision Making
The study also confirmed that companies have been struggling to understand the customer data they collect, and that only by using AI can they derive insights from that data in real time and then through automation and event triggers, take the appropriate action to engage with the customer.
Traditionally, generating insights and taking the right marketing action existed separately from one another, and since the process of mining the data and applying actionable insights has mostly been a manual one, it has simply taken too long for many companies to take action on their data analysis.
However, the study shows that 52 percent of firms say that they are able to manage real-time customer interactions with the brand, and they are doing it with AI and its built-in ability to consume real-time data at scale from a broad range of sources.
4) AI will Revolutionize Marketing
We are at a tipping point where most, if not all, e-commerce and retailers are aware of AI’s potential to improve so many areas. Looking forward, the study shows that three out of five (60 percent) retail and e-commerce firms expect to implement AI marketing technologies within the next 12 months. For those companies who are already on the AI path, the report shows some promising projections.
Overall, 79 percent of companies believe that AI technology will shift the role of marketing toward more strategic work, such as audience segmentation, product innovation, and incentives. They also believe that AI will make marketing teams more efficient (86 percent) and more effective (86 percent) in their customer interactions, specifically enabling marketers to focus on value-generating strategies as AI automates certain tasks (82 percent).
The most striking finding of all? Most marketing firms agree or strongly agree that AI will reinvent the retail industry (88 percent) and dramatically change what their companies do (81 percent).
To be successful today and well into the future, marketers must leverage their greatest asset—data. However, analyzing that data and reacting to it in real time doesn’t scale. AIM will quickly become the best way to leverage this data, in real time, to achieve business growth. At the same time, it no longer matters if you believe in AI. The gauntlet now is about the speed at which companies that have lagged in their acceptance of AI are able to catch up with those already in the process of implementing it into their marketing strategies.