How Artificial Intelligence Helped Santa This Year
Santa shopped online this Christmas. In the 2018 Christmas shopping season, over 65% of shoppers went online for their pre-purchase research (as opposed to the 20% who relied on retail). As for actual purchases, around 60% were made online, to say nothing of all the people who do online research and go on to purchase act a retail outlet. (Source: Deloitte 2018 Holiday Survey).
Why does this matter? Aside from placing an incredible load on the domestic shipping industry, shopping online is an entirely different experience from shopping in retail stores. The difference isn’t the screen, but which items are displayed.
In retail stores, when a customer enters the store, everything is arranged to get that customer to buy. For example, in Best Buy, the first thing a customer sees is the Best Buy Mobile arrangement. No matter what they came in for, customers are drawn to the latest, newest, shiniest phones, stoking desire in people who may not have wanted a new phone before. On the other hand, the appliance section is usually hidden along the side because appliances are unsexy and don’t create desire the way phones or tablets do. It’s also along the side because appliances are the kind of purchases people typically plan before making, so by placing it out of the way, Best Buy is dragging those customers through the store to try and ignite their desire for other things along the way.
Best Buy isn’t the only store that does this. Almost every retailer imaginable does. Kroger (and every other grocery store) places milk, cheese, and dairy items in the most inconvenient place, the farthest corner of the store away from the entrance doors. Why? Because these are the items people most commonly go to the grocery store for, and by placing them in the back, Kroger makes sure you see plenty of other things you want to buy and eat on the way.
The limitation of this is that the store has to be arranged to appeal to everyone. Perhaps you just bought a new phone, so Best Buy Mobile doesn’t hold the same appeal for you. Perhaps you went to the grocery store for candy and snacks, which are closest to checkout counters. These tricks work in general, but they don’t always work on everyone.
Amazon doesn’t have the limitation of being static the same way retailers do. When you log on to Amazon’s home page, the Amazon you’re seeing is customized to you. In general, they might get more sales by displaying new phones, computer accessories, or expensive jewelry, but they don’t have to operate based on generalities. They know you. They know you recently bought a new phone and a new dishwasher, but that your tablet is getting old (they have the sales records from when you last bought a tablet) and that you didn’t buy the matching stove or refrigerator for your dishwasher. Instead of being limited with a general layout, Amazon can display to you personally the matching refrigerator, stove, and tablet for your lifestyle. And for smaller purchases, there’s always phone cases, spare batteries, and cookware.
How does Amazon do this? Artificial Intelligence.
Artificial intelligence algorithms help make online shopping experiences more personal. AI gets to know your preferences and behaviors to provide personal recommendations and save you the time of culling through thousands of product results to find just what you’re looking for. This AI tech is getting so good that it knows what you want — and can suggest complementary products — even better than you do.
It’s a Holly Jolly Artificial Intelligence Enabled Christmas, Forbes
So before you go cursing the name of Artificial Intelligence and predicting impending AI-powered doom, remember that for a lot of people, Artificial Intelligence is what made Christmas possible this year.