Retailers Ramp Up AI Efforts, But Feel The Strains Of Catching Up

78 percent of retail organizations polled said spend on AI marketing technologies will increase over the next 12 months by at least 5 percent or more, a report from Emarsys and Forrester says.

While brands from West Elm to Harley Davidson to Cosabella ramping up the use of artificial intelligence to better predict and connect with consumers, only 52 percent of retailers say that they’re able to manage real- time customer interactions, according to a global survey of 717 store brand marketing execs by Forrester and AI platform Emarsys.

That said, brands are scrambling to catch up. About 78 percent of retail organizations polled said spend on AI marketing technologies will increase over the next 12 months by at least 5 percent or more.

“AI is helping us to target specific segments of customers, which is increasing our customer base and helping us in addressing their needs,” one European respondent said.

Additionally, retail marketers plan to deploy AI marketing technologies to address foundational requirements for supporting real-time customer interactions, such as understanding cross-channel customer behavior (81 percent), mapping customer journeys (80 percent) and cross-device identity resolution (78 percent).

At the same time, about 65 percent of retailers voiced concern about attempts to keep up with consumers’ rapidly evolving tech choices and the complexity to form cross- channel customer relationships.

To get a better sense of where brands’ comfort with AI stands, the survey grouped retailers into four groups:

  • Experts (11 percent) who demonstrated true AI marketing readiness across all three dimensions.
  • Opportunists (34 percent ) who excelled at two of the three dimensions.
  • Novices (28 percent) who excelled at only one of the three dimensions.
  • Laggards (27 percent) who clearly struggled across all dimensions.

A clear majority of respondents (88 percent) “strongly agree or agree” that AI will reinvent the retail industry and dramatically change what the company does (81 percent).

In addition to finding ways of interacting with customers on their own terms, the bottom line of this call for “reinvention” is the pressure to personalize the shopping experience from Amazon.

Sales on July 11 surpassed Black Friday and Cyber Monday, making it the biggest day ever in Amazon history, the e-commerce giant said in a press release, noting that more than 200,000 women’s dresses — and more than 200,000 lightbulbs —  were purchased by customers on Prime Day 2017.

When asked about West Elm’s AI strategy, VP of Innovation Luke Chatelain told GeoMarketing, “We believe AI has a role in all facets of the technology we create. From programmatic emails to personalized product recommendations, we’re working to create better, more streamlined customer experiences that are personalized to each user.”

In the report summary, Emarsys and Forrester offer this additional guidance for retailers shifting to AI: “Misconceptions of tech skills required for AI marketing hinders mainstream adoption. Users are after all consumers too, they must get their hands-on AI-powered marketing tools to understand, control and teach it to get the best results.

“Not all firms will have all the required skills in the marketing organization, and given the talent shortage, it’s also likely that firms won’t be able to rely on external recruitment to fill the gaps,” the report warned. “Decision makers must educate themselves in all things AI, and ensure that for AI to work there is first and foremost excellent data stewardship, and not necessarily the need for marketers with tech skills.”

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.