Last week you ordered a new bed from a home furnishings website. So why do you keep seeing ads for the same bed you just bought instead of seeing ads for matching furniture?
For customers, being bombarded with these mistargeted ads can be frustrating and frustrating. For retailers, each ad is a missed opportunity to cross-sell and build customer loyalty.
Experiences that don't match the customer's needs, preferences, and circumstances are more likely to undermine trust rather than build it. Shoppers are said to be annoyed by the noise of advertising from numerous brands trying to sell them. advertising age.
At the same time, shoppers want to feel like VIPs and increasingly expect brands to recognize and understand them. In a recent Deloitte Digital study, 69% of customers surveyed said they were more likely to purchase from a brand that personalized their experience.
However, there is often a disconnect between the personalization companies offer and what customers want. More than 50% of customers surveyed said personalization does not meet their needs, interests or preferences. Communication is often one-sided and lacks the feedback loops companies need to engage customers.
Commerce personalization through AI
Artificial intelligence (AI) creates unparalleled opportunities for personalized commerce, using real-time data and technology to tailor the shopping experience to individual customer preferences.
“Businesses of all sizes are looking for ways to break through the noise and attract new customers while building loyalty with existing customers,” said Frank Keller, executive vice president and general manager of PayPal’s Enterprise and Merchant Platforms Group. “Applied in the right way, AI can help develop new, trusted, personalized experiences that make every customer feel like they matter most.”
AI uses machine learning to analyze customer preferences and predict in real time what shoppers will want to buy. By generating predictive customer insights through customer demographics, online and in-store purchase history, and shopping activities, AI helps businesses deliver more accurate, personalized shopping experiences and connect shoppers to their favorite brands online and in stores. You can help get involved.
A new commerce experience
By analyzing SKU-level purchase data, AI can help companies provide highly personalized product recommendations and offers based on shoppers' size and color preferences. This allows businesses to personalize the shopping experience across demographics.
According to Capterra, nearly two-thirds of customers expect to be able to check out online in less than four minutes. Using AI-powered customer insights, businesses can simplify and speed up the checkout process by predicting and auto-populating shipping and billing information for returning customers and even customers who check out as guests.
Companies that use data analytics and AI also gain new opportunities to grow through:
• Improve conversion rates and increase revenue. According to McKinsey, personalization can increase profits by up to 15%.
• Increased customer loyalty. Salesforce recently reported that 65% of shoppers say they will remain loyal to a company that offers a more personalized experience.
• Reduce marketing costs. Being able to intelligently target customers helps businesses better strategize their spending on broader marketing campaigns.
foundation of trust
The promise of personalized commerce is attractive, but it can only bear fruit if customers agree to share their data. AI insights are only as good as the data AI can analyze, so customers must trust that companies will not misuse, inappropriately share, or insecurely store their information.
According to the Pew Research Center, customers are anxious about their personal data and how it is used. To alleviate these concerns, companies should provide an easy way to opt out of data sharing.
“Collecting, accessing and analyzing data is critical to creating truly personalized experiences and scaling them broadly,” says Keller. “But consumers want to share this data only with brands they trust.” “Today’s consumers are wary of blindly sharing their data without control over what they share, how it is used, and the ability to control that data as they see fit.”
The future of personalized commerce is already underway. According to Twilio Segment, 92% of companies surveyed said they use AI-based personalization to drive growth.
Companies that use AI to personalize commerce and deliver VIP experiences will improve customer relationships and stand out from their competitors.
Learn more about how PayPal helps businesses attract, convert, and engage shoppers through AI-powered commerce innovation.