INNOVATION
5 Ways to Unlock More Revenue with AI
INNOVATION
5 Ways to Unlock More Revenue with AI
Your competitors are investing heavily in artificial intelligence to generate revenue. Since 2013, private investment in AI has grown by a factor of 18. You may think these investments are years away from seeing returns. This could not be further from the truth. AI solutions are out there in your daily life, driving revenue, and continuing to expand into more and more everyday consumer touchpoints. With artificial intelligence poised to add $4 trillion to the global economy, can you afford to stay on the sidelines?
Here are five effective AI approaches, with real-life use cases, to grow current revenue streams while simultaneously unlocking new ones.
1. Personalized Product Recommendations: The Key to Revenue Growth
Generic product recommendations can lead to customer frustration, low engagement, and missed sales opportunities for businesses. The lack of personalization results in customers feeling ignored and unable to find the products they are actually looking for, ultimately hindering revenue growth. This is prompting businesses to seek out AI-powered personalized recommendations, which can analyze individual preferences and behavior to deliver relevant and engaging suggestions, ultimately driving higher conversion rates, larger basket sizes, and increased customer satisfaction.
Brands like Target, Bloomreach, and Coursera are all reaping the benefits of personalized product recommendations powered by AI.
- Target: Increased conversion rates and average order values through relevant product suggestions based on past purchases, geo-location, and browsing behavior.
- Bloomreach: Provided users with personalized product recommendations on product pages and email campaigns based on individual browsing behavior and purchase history.
- Coursera: Improved student engagement and outcomes by recommending relevant courses based on individual interests, skills, and learning goals.
These examples demonstrate how AI can personalize the shopping experience and increase sales and customer satisfaction in the omnichannel retail, eCommerce, and education industries.
2. Dynamic Pricing: Optimizing Your Profit Margins
Businesses are facing significant challenges with static pricing strategies. Customers are often dissatisfied with the lack of flexibility and responsiveness to market fluctuations, resulting in lost sales and decreased brand loyalty. This is leading businesses to explore AI-powered dynamic pricing solutions, which can analyze market conditions, competitor pricing, and demand in real-time to adjust prices dynamically. This dynamic approach allows businesses to offer competitive deals and maximize profits while also ensuring customer satisfaction.
IKEA and Walmart are prime examples of how AI-powered dynamic pricing can optimize profits.
By dynamically adjusting prices, IKEA and Walmart ensure they are always offering competitive prices while also maximizing their profit margins.
3. Conversational Commerce: Enhancing Customer Service and Reducing Costs
Frustrated by inefficient customer service and limited engagement, businesses are turning to conversational commerce powered by AI. Traditional methods struggle to handle high-volume inquiries, provide personalized assistance, and offer 24/7 availability, resulting in frustrated customers and lost sales. AI-powered conversational chatbots and virtual assistants are offering a solution. They can answer customer questions, provide product recommendations, assist with purchases, and offer personalized support, leading to improved customer satisfaction, increased sales, and reduced operational costs.
Sephora, a leading beauty retailer, faced the challenge of providing personalized product recommendations and customer service in a crowded online market. To address this, they implemented a conversational commerce AI solution powered by chatbots and voice assistants. This AI-powered platform allows customers to:
- Ask questions about products and ingredients
- Get personalized recommendations based on their skin type and preferences
- Easily make purchases and schedule appointments
- Receive beauty tutorials and expert advice
By offering a convenient and personalized shopping experience, Sephora's conversational commerce AI has resulted in:
- A 2023 Sephora report revealed a 15% increase in online sales attributed to the conversational commerce AI platform.
- A 2022 customer satisfaction survey showed a 20% increase in satisfaction with the ability to get personalized recommendations and assistance through the AI platform.
For businesses in the retail industry, conversational commerce AI can provide a personalized shopping experience, increase online sales, and improve customer engagement while reducing costs. By leveraging the power of AI-powered chatbots and voice assistants, businesses can create a more engaging and convenient shopping experience for customers, ultimately driving revenue growth.
And Now, for a Hot Take
At PeakActivity, we aren't afraid of big ideas or taking risks. In fact, we embrace them. In addition to the innovative ways the aforementioned businesses are leveraging AI to drive more revenue, there is a specific AI solution that we see as particularly powerful: AI-enabled Conversational Commerce.
ROB PETROSINO
Head of Innovation, PeakActivity
4. Search Optimization: Making It Easy for Customers to Find What They Need
Businesses are struggling with ineffective search functionalities that lead to poor customer experiences and missed sales opportunities. Customers are frustrated by irrelevant search results, cumbersome interfaces, and an inability to find the products they need quickly and easily. This results in cart abandonment and decreased brand loyalty. To address these challenges, businesses are adopting AI-powered search optimization solutions. These solutions leverage natural language processing and user behavior data to understand user intent, deliver relevant product suggestions, and personalize the search experience. This leads to increased search efficiency, improved customer satisfaction, and ultimately, higher conversion rates and revenue growth.
Bloomreach and Target both leverage AI to optimize product search, leading to a better user experience and increased sales.
- Bloomreach: Reduced product abandonment by optimizing product searches based on user intent and suggesting relevant products.
- Target: Leveraging artificial intelligence, Target has reached a 96% automation rate for product listing inspection, boasting a 99% accuracy level.
By making it easy for customers to find what they're looking for, AI-powered search can significantly boost sales.
5. Virtual Design & Try-On: Eliminating the Guesswork and Boosting Sales
In a bid to overcome the challenge of low conversion rates and high product returns stemming from customers' inability to adequately visualize products, businesses are increasingly turning to AI-powered virtual design and try-on technologies. These solutions tackle the pain points inherent in traditional shopping experiences, where customers often struggle to envision products in their own environments or on themselves, leading to inaccurate purchases and subsequent dissatisfaction. By harnessing the power of AI to create realistic virtual environments and immersive try-on experiences, businesses are empowering customers to make informed decisions before they buy, ultimately driving higher conversion rates, reducing returns, and fostering greater customer satisfaction.
IKEA, Target, and Nike all utilize AI-powered virtual design and try-on tools to improve the customer experience and drive sales.
- IKEA: Reduced product returns and improved customer satisfaction through virtual room planning tools that allow customers to visualize furniture in their space before they buy.
- Target: Developed and deployed “See It in Your Space” technology that allows customers to see how furniture and decor fit in their homes through the Target app.
- Nike: Launched its Nike Fit app, which combines augmented reality and AI to scan the customer’s feet and collect 13 visual data points to provide hyper-accurate shoe-size recommendations.
By providing a more realistic and convenient shopping experience, virtual design and try-on tools can help businesses increase sales and reduce returns.
PeakActivity: Your Trusted AI Expert in Retail & eCommerce
The AI revolution is here. From personalized recommendations to dynamic pricing and immersive virtual experiences, AI is unlocking unprecedented revenue potential for businesses that embrace it. But navigating the complex world of AI can be daunting, especially for retail and eCommerce companies just starting their journey.
That's where PeakActivity comes in. We're your trusted AI partner, here to guide you every step of the way. We help eCommerce companies understand their options, pick the perfect AI solutions, and integrate them smoothly, paving the way to AI-powered growth.
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