Amazon, Personalization And The AI Effect

Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Jennifer Pelino, senior vice president of omnichannel media at Information Resources Inc. (IRI).

When my 5-year-old son opened his birthday present from my 72-year-old mother this summer, he proclaimed that Grandma had bought him a vacuum cleaner. Although it was shaped like a smaller robotic vacuum, it was really an Echo Dot.

I thought it was an intriguing gift from someone of an older generation to give to someone of the newest generation. She chose this gift because he likes to retrieve hockey and baseball scores through Siri on my iPhone. Since my husband and I travel for work and our phones are not always available to our son, she thought this gift made sense.

Then she said, “But what it’s really great for is actually helping make your life easier through commands.” Cue open jaw.

She was right. The Dot has quickly become an integral part of our lives. We can manage tasks quickly and easily by stating commands and driving actions to create more personalized and interactive experiences for even mundane tasks, such as grocery shopping.

Amazon’s acquisition of Whole Foods is bearing fruit with this type of experience. The retail and CPG industries are in a flutter over it, and they should be. Most marketers are not yet prepared for what is about to happen as artificial intelligence (AI) transforms our lives, including our shopping and purchasing habits.

Amazon purchased Whole Foods for its purchase data, real estate to accelerate delivery collection and to test and learn from the omnichannel consumer experience. Retailers and CPG brands are worried about this development, and they need to take action. They must move beyond the old ways of reaching consumers and connect in a more personalized manner by providing the services, products and personal attention everyone wants, whether they are young or old.

Where are other brands in truly understanding the personalization dynamic and AI effect? They should take a cue from Grandma and Amazon by offering more digital options for grocery shopping and delivery, making the process seamless for consumers. Retailers and CPGs must accelerate their services and move shoppers from an occasional digital purchase to a continual and repeatable habit.

Most digital ecommerce shopping from retail is coming from nonperishables, including center-of-store options such as paper goods, multisnacks, beverages and cereals. Brick-and-mortar retailers should focus on these categories and items first, closely coordinating with CPG brands to ensure that the shopping and delivery experience for these items is simple and easy.

Retailers and brands can use shared collaboration platforms to work together to develop a strategic approach to online shopping and increase their expertise. Brick-and-mortar retailers can also take advantage of their strength in fresh or prepared meals by providing a great digital and delivery/pickup option. For example, retailers should consider helping customers save time by having prepared meals and semi-prepared produce for making healthy and quick meals available via click-and-collect system.

Retailers should also ensure their best-selling products appear in the digital aisle and at the top of search command options for easy shopping and ordering. Managing the digital shelf is a full-time job, and digital merchandising must be updated often with appropriate content.

Since, on average, consumers add items to their shopping list six different times, retailers and CPGs have a great opportunity to optimize the shopping experience based on customer behaviors, and then constantly update and refine the process. Retailers can use advanced machine learning to move the process along for consumers more quickly and limit the number of times they go back to add items.

Recommendations can ensure customers get a highly relevant shopping experience. Once products are integrated into shopping lists, brands will attract repeat visits and loyalty. Grocery shopping is a frequent occasion, and about 80% of the products consumers purchase are the same every time they shop. Using deterministic audiences, location-based targeting and other big-data tools can help brands and retailers personalize their product ads to consumers. Customizing communications based on purchase and online behavior in context will increase brand loyalty since relevant communication is always more engaging.

Marketers need to fully understand past consumer purchases, as they are the strongest indication of how consumers will act. But it’s also important to blend this knowledge with what consumers aspire to buy or experience, so that marketers can capture them when their attitudes or preferences change due to income or life stage. Wrap all of that together with their current location, weather, macroeconomic conditions that affect purchases and what consumers are experiencing for a winning formula.

Marketers need to do some heavy lifting and make changes quickly so that shopping is faster, easier and more convenient. Faster, easier and more convenient means different things to different people based on age, gender, income and other factors. It’s time to create the personalized digital shopping experiences that keep consumers returning again and again, young and old alike.

Follow IRI (@iriworldwide) and AdExchanger (@adexchanger) on Twitter.

 

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