Why AI Integration Is The Future Of Successful Brick-And-Mortar Retail
Dirk van Ginkel, creative director of Jam3 design and experience agency, explains why the time is now for retailers to learn from the pros at Sephora and Nordstrom to reimagine their in-store cx using AI.
Retailers have been struggling for years to compete with online giants like Amazon who have been consistently taking over market share with their convenience and hyper-targeted product suggestions. As signaled by the closure of iconic retail giant Toys R’ Us, there is an undeniable shift in consumer behavior towards retail stores. Today only a few retailers are still expanding their stores — and their success lies in creating experiences that make visiting a store worthwhile (Business Insider, 2017). Companies like Sephora or Lululemon are leading the way by making their stores more than just spaces for commercial transactions.
Sephora is one of the few brands in 2018 that was still rapidly expanding its retail presence. Its new stores open jam-packed with technology to help create a better customer experience. The addition of Augmented Reality (AR) mirrors and AI lets visitors to the store instantly ‘try on’ a wide range of shades and enhanced color choice suggestions from Sephora’s database, all without the aid of a professional makeup artist (Johnson, 2017). These features allow the retailer to lower some of the costs involved with maintaining a physical store while also offering something new and exciting to customers.
The time is now for brands to start rethinking and reimagining their in-store customer experiences with AI. The cost-effective, customer service solution has sparked the interest of other retailers, notably retail giant Nordstrom. Instead of opening larger stores that require a strict inventory management system to ensure everything is in stock, Nordstrom opened a number of smaller stores that focus on providing tailored styling advice to its customers (Raphael, 2018). This is a perfect opportunity where AI can be used to create even greater efficiencies, ones that help tailor the experience by providing contextual fashion suggestions to customers and staff alike.
Contextual fashion is what AI is great at: It mitigates the experience of not finding exactly what you’re looking for. AI can take a lot of consumer frustrations away by suggesting items on the fly at key purchase moments in or outside the store. This can either happen conversationally in the form of a bot or by using image recognition to create unique customer profiles. Here are two potential ways AI can work without a human stylist:
Image-Recognition Stylist Bot: With an in-store bot, retailers can create a personalized customer experience that uses a camera to detect the clothes shoppers are wearing and then conversationally suggest new items that suit their tastes and needs.
AR In Out-Of-Home Media: AI does not always have to be an active customer experience. Passive engagement has the potential to be the most interesting way to lure consumers to a store — imagine automatically showcasing what a product looks like on passersby with an AR mirror.
The Bottom Line
Success with in-store experiences lies in merging the services offered by retail staff and the brand’s online platforms. AI-based solutions can empower fashion brands to create more effective marketing strategies that truly elevate the customer experience in ways that not only engage but also increase convenience.
By enabling these personal experiences, these brands also create connections. Speaking to consumers at a personal level earns and builds trust, fostering a special bond and helping business in the following specific ways:
Create a sense of belonging: It’s twofold. People both yearn to belong to something larger than themselves and expect brands to participate in the local culture.
Stand out from the crowd: Customers want to experiences and products that are personalized for them. From sales associates knowing their name to customizing their own shoe, this process of “made for them” makes it memorable, driving an emotional, intimate connection.
Create participatory exploration: People love the thrill of the chase and the visceral pleasure of discovering something new, and this thrill is what still drives sneaker culture today.
Enable targeted content displays: Online platforms like Facebook and Instagram have mastered the art of targeted content. Why not apply this in-store? To do so, first retailers need to understand their audience, however. In order to help them do so, we [at Jam3] can use natural language processing on their Instagram accounts and make videos that change their in-store content based on what is being talked about locally. We want to create different permutations of content and tailor it to the marker using tech like Algo.
Dirk van Ginkel is creative director at Jam3 design and experience agency. Over the years, Dirk has focused his career on creating innovative and engaging experiences for global brands like Adidas, eBay, SyFy Channel U.S., Google, Focus Feature Studios, 20th Century Fox, Pixar, Warner Brothers and Disney. His body of work covers WebVR, Augmented Reality, physical installations and 360-degree film.
Originally published at www.psfk.com on February 26, 2019.