Artificial Intelligence has been creeping into the mainstream for years. Virtual assistants like Alexa and Siri manage our schedules, streaming services such as Netflix and Spotify offer personalized recommendations and chatbots often handle our customer service enquiries.
However, over the last 12 months, AI has exploded – with generative AI tools like ChatGPT transforming how we interact with technology and AI-driven features becoming a built-in part of smartphones and software.
For retailers keen to stay ahead of growing demand for personalized shopping experiences, AI offers an exciting opportunity to connect with customers on a deeper level.
However, integrating AI into retail isn’t without its challenges. Issues like data privacy, responsible use, and the need for seamless implementation can pose hurdles.
In our latest Industry Roundtable, we spoke to a handpicked selection of global commerce experts to get practical tips and insider insights on the best approach to using AI in retail. Here’s what they had to say…
How can retailers effectively use AI to boost personalized shopping experiences and drive sales?
“It’s never been easier for customers to have 1-1 conversations with your brand. AI negotiation is used in B2B, Home & Furniture, Resale, and more to personalize shopper interactions and find the perfect price for both parties. A/B tests in AI negotiation have shown conversion improvements of up to 145%. Retailers must not underestimate the power of a conversation.” – Rosie Bailey, CEO, Nibble
“AI has revolutionized e-commerce technology, offering marketers innovative ways to deeply connect with their audience and create more 1:1 personalization with customers. AI can generate variations of marketing copy, product descriptions, and campaigns, personalizing messaging for different segments. For example, segmenting customers into categories like “sale shoppers” or “fashionistas” can increase conversion rates.
“AI also translates e-commerce site content and product descriptions into multiple languages instantly, accounting for cultural nuances. This expands global reach while maintaining local brand voice. SHOPLINE’s platform supports translation in 36 languages, enabling seamless market expansion.” – Alexandra Lervy, Technology Partner Manager, SHOPLINE
“Generative AI can be used to digest large amounts of information and turn it into a chatty shopping experience. For example, basic information sources like sizing guides and shipping policies can be used to answer customer questions like “Do you ship to Mexico?” and “I’m usually a size 9 shoe, what size should I buy?”. To take it to the next level, this AI experience can take into account data like “dwell time” and previous viewing history to personalise the experience even further.” – Stephen Jones, Head of Partnerships at DigitalGenius
“Brands should use AI to better segment their customer base and understand purchase intent. This enables targeted marketing campaigns based on customer behavior, preferences, and demographics, resulting in higher conversion rates.
“For example, brands could use AI to predict when a customer might need to replenish a product, then automate personalized email campaigns or direct mail reminders, prompting them to reorder. Retailers could also encourage long-term subscriptions, increasing CLTV.” – Mollie Woolnough-Rai, Senior Marketing Manager, Penny Black
What are the main challenges retailers face in implementing AI for personalization, and what best practices should they follow?
“Retailers need to be careful if they are considering using any form of generative AI and decide on an AI ethics policy from Day 1. Using a hybrid approach to generative AI – a combination of traditional pre-written responses with small doses of generative AI – can allow retailers to leverage the personalisation of generative AI without the risks traditionally associated with LLMs. It is not merely good practice but essential retailers are upfront with customers any time they are talking to AI – never pretend to be a human. Transparency is key.” – Rosie Bailey, CEO, Nibble
“Personalization requires time and resources to achieve its full potential. Initially, you’ll see a significant impact on KPIs due to the novelty and relevance (e.g., “Hey, you” changing to “Hey, Alex”). However, this impact stabilizes over time. Continual new initiatives are crucial. Organizations must invest in constant analysis and iterations, as this is when the data becomes unique to your customers, revealing their true wants and needs beyond macro changes.” – Alexandra Lervy, Technology Partner Manager, SHOPLINE
“The biggest challenge for retailers is finding problems for AI to solve, instead of the other way around. AI opens up new possibilities for merchants, but “when all you have is a hammer, everything looks like a nail.” AI must be deployed responsibly, with due diligence (like getting customer references from vendors, testing with a small sample size, etc.) to protect merchants from big mistakes.” – Stephen Jones, Head of Partnerships at DigitalGenius
What AI-driven strategies can retailers adopt to create seamless omnichannel experiences, bridging online and offline interactions?
“More consumers demand the same service they experience in stores on their e-commerce sites. Replicating this online is a challenge many brands have yet to master. You can imagine being in a Primark or John Lewis store, but not their e-commerce site. Connecting online and offline experiences is crucial.
“Many find it frustrating to discover a product in-store but not online. Embedding AI in the search experience solves this problem. Tools using image recognition identify attributes from photos and suggest relevant products, converting images into data and offering accurate recommendations, even without precise keyword tags.” – Alexandra Lervy, Technology Partner Manager, SHOPLINE
“AI customer service agents can access inventory levels to answer questions like, ‘Can I buy this at your Oxford St. store?’. They can also use shipping carrier information to assist offline, such as, ‘DHL tried to deliver your parcel and failed; it’s now at your local sorting centre. Here’s the address’.” – Stephen Jones, Head of Partnerships at DigitalGenius
“To create a seamless omnichannel experience, brands should deliver consistent personalized content across online and offline channels, particularly post-purchase. This ensures shoppers receive a consistent experience and feel more emotionally engaged to return and buy again.
“For the offline experience, retailers should include personalized inserts in packaging with unique discount codes or product recommendations.
“Brands can extend this personalized experience online through email and SMS. For example, if a brand shares styling tips in the unboxing moment, they could follow up with an email asking the customer to share UGC of their styling.
“This approach enhances customer engagement and ensures brands maximize every touchpoint.” – Mollie Woolnough-Rai, Senior Marketing Manager, Penny Black
How can retailers leverage AI to anticipate and respond to individual preferences in real time, fostering long-term customer loyalty?
“Personalization is about adjusting the site experience based on unique behavior, preferences, and intent. It has become an expectation in today’s digital landscape, boosting customer satisfaction and loyalty.
“Training AI with unique customer interactions, brand voice, and marketing campaigns unlocks personalized content, targeted campaigns, and predictive insights. By analyzing past behaviors, AI predicts what customers want next and makes tailored recommendations. For example, if a customer lingers on a page with a blue handbag, AI will show them other blue handbags. AI chatbots, like those from SHOPLINE, provide immediate, customized support 24/7, enhancing the shopping experience.” – Alexandra Lervy, Technology Partner Manager, SHOPLINE
“Past experiences are rarely a good indicator of future realities, but it’s all we’ve got! One of AI’s best uses for ecommerce is data analysis and forecasting. By using previous sales history and layering in trends like seasonality and advertising, AI can predict required inventory levels. Nothing kills customer loyalty like being unable to buy your products, so using AI to forecast purchasing decisions is one of the smartest choices an ecom operator can make today.” – Stephen Jones, Head of Partnerships at DigitalGenius
“Brands should use AI and customer preferences for hyper-personalized product recommendations, showing they know their customers. With 91% of consumers more likely to shop with brands that recognize them, relevant recommendations build trust and loyalty.
“Retailers can include these recommendations on personalized inserts to cross-sell more products. For example, Korean beauty brand Yepoda includes personalized recommendations for the next steps in the skincare routine, encouraging first-time customers to return and buy relevant products, building loyalty and LTV over time.” – Mollie Woolnough-Rai, Senior Marketing Manager, Penny Black
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