Major Retail Brands Are Counting on AI to Improve Customer Engagement

August 18, 2017

Two-thirds of CMOs and senior marketers at major retail brands such as Best Buy and Urban Outfitters will shell out upwards of $1 million on artificial intelligence (AI) and machine learning this year, including about one-fifth who will spend at least $50 million. That’s according to a new study from WBR Digital and Persado [download page], which surveyed 100 CMOs and marketing leaders at top retail brands headquartered in the US and UK.

The research indicates that AI is already making significant inroads in the organization, with more than two-thirds (69%) already using AI or machine learning in their marketing. An even greater proportion (86%) plan to invest in these technologies this year.

Separate research suggests that AI is currently being deployed for internal site search and for recommendation engines, while large retailers’ imminent AI plans relate to leveraging customer insights to map customer journeys as well as to improve custom retention and loyalty using customer insights.

This latest study indicates that major retail brand marketers most commonly expect AI and machine learning to improve their effectiveness in terms of engagement (86%). What does engagement mean to these marketers? It mostly refers to impact on revenue, repeat purchases and retention – all of which are related.

Other expected benefits from the implementation of these tools include staying ahead of competition in terms of infrastructure of products and services (80%), risk management (70%), and systematic uplifts in campaigns (69%).

One thing does seem clear: retail marketers are very excited about the potential for AI to transform their function.

Biggest Impediments to AI

The survey also asked these marketing leaders to identify challenges in AI adoption.

Interestingly, despite some indications that technical skills are a common impediment, these ranked relatively low on the list of challenges. Indeed, fewer than half said that lack of appropriate skills in-house is a big roadblock.

Instead, respondents pointed to confusion or lack of clarity over what AI can be used for (76%). So while marketers see the benefits of AI, they apparently want to learn more about the potential use cases. There are also some trust issues in play: almost 6 in 10 say that trepidation / distrust around introducing AI technology is a factor.

The only other issue reported by a majority of respondents is the lack of a defined business case (52%) for the adoption of AI. In other words, marketers need to be able to securely point to its expected benefits: more than three-quarters of respondents said they’ll measure the success of their marketing technology by its ability to incrementally affect revenue.


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