AI will accentuate hyper-personalization in retail

Already very present in the world of luxury and retail, the use of artificial intelligence will intensify and even “transform” these sectors, according to a study published by Deloitte coinciding with the World Retail Congress, which will be held in Paris on the 16th. to April 16. 18. 52% of brands and retailers surveyed for this report said they intend to use generative AI (ChapGPT, Dall-E, etc.) over the next twelve months to create content (posts and reports), and 25 % to build brand. campaigns and marketing.

Targeting customers is a key factor, especially in the world of luxury. “Brands are increasingly adopting personalized recommendations and targeted advertising to analyze consumer behavior and preferences in real time,” the document says.

“For those looking to stay one step ahead, hyper-personalization will be key. Consumers expect brands to understand their individual preferences and offer personalized interactions at every level. These discerning shoppers seek seamless experiences that provide a sense of exclusivity and importance. both in the physical and digital spheres,” says Ida Palombella, from Deloitte Italia's Fashion and Luxury practice.

Last year, for example, the Prada group partnered with Adobe to try to improve the consumer experience both online and in stores. Moncler launched a creative campaign with the help of AI, as did Maison Valentino for its Essentials collection.

“In the luxury sector, maintaining a consistent brand narrative is essential, and handing control to a third party can potentially dilute brand positioning,” says Gillian Simpson of Deloitte UK. “By using generative AI tools to create content, whether images or text, luxury retailers can standardize their tone of voice across all communications, while creating necessary adjustments for multiple customer segments, geographies, missions …”.

Some points of surveillance and mistrust are also raised. First, the problem of unstructured data, which requires a large amount of storage and processing. The challenge is to isolate qualitative data efficiently. Then there is the question of personal data protection. To cultivate consumer trust, “luxury retailers must base the design, implementation and communication of AI tools on four fundamental pillars: human connection, transparency, capability and reliability,” the study states.

Monetize investments

US data hosting startup Snowflake also presented a report on AI in the broader property sales sector at the conference. It is said that in the future, the main applications of AI in retail will include sales assistants, market signal analysis and, of course, content creation.

In addition to experimenting with the tool, companies now need to monetize their investments and quantify the benefits (or not). First of all, the time savings, if real, and then the financial benefit (in particular through cost reductions, which can affect human resources).

The document lists a number of examples of uses of artificial intelligence, some beneficial and others unsuccessful. In the world of clothing, for example, AI-generated product recommendations and virtual outfit try-ons “have become widely accepted.” But in the world of jewelry or watches, “where the human touch is valuable, a virtual assistant may not be ideal.” The same goes for the automotive sector, where purchasing is very complex, says Snowflake.

The possibility of improving the relationship with customers and the messages delivered is also addressed. This is achieved by aggregating and analyzing customer reviews left online on various sites, posts published on social media that mention the brand, and customer service emails. In short, track consumer sentiment.

Another lever is the monetization of data collected by retailers, which can generate additional revenue. There is strong demand for third-party data on demographics, purchasing behavior and the hottest products.