Doing More With Less This Holiday Season? AI Retail Merchandising Can Help

As retailers jumpstart preparations for this year’s peak shopping season, they face a trifecta of holiday humbugs: inflation, supply chain issues, and a labor shortage. The good news? With artificial intelligence (AI), businesses can increase revenue, save time, and improve the shopping experience. As businesses do more with less in this economy, AI is the gift that keeps on giving.

This works especially well in retail merchandising. When you have the right product recommendations and merchandising techniques, you increase average order value (AOV) and create a positive customer experience. But without AI technology, the process is tedious and time-consuming. 

Here’s how to use AI in retail merchandising and come out on top this holiday season.

How does AI retail merchandising increase sales?  

In a physical store, service reps ask customers questions, showcase special offers, and guide them to relevant products. Your digital shoppers can get the same experience, and AI makes it seamless. When a customer adds earrings to their cart, for example, AI suggests a matching necklace. This is especially helpful when shoppers are on the hunt for unfamiliar items and welcome extra help in purchasing gifts. AI can instantly review shopper behavior and suggest products that pair well or are often purchased together.

Smart, automated product suggestions are known to increase AOV. In fact, Salesforce found that AOV is 26% higher when shoppers click on AI-powered product recommendations. 

AI can also send personalized alerts that increase items per transaction. Is a customer just a few dollars away from unlocking free shipping? Let them know with an automated message. Are stock levels low on a popular item? Announce this to customers to offer transparency and encourage conversions. These moments increase revenue and lead to an effortless shopping experience for the customer.

AI saves merchandisers (and customers) time

Merchandisers run a tight ship, and the ongoing labor shortage can hurt efficiency and set your projects back. If you have a small ecommerce team (or one that’s stretched thin), AI can help by automating some of the tedious work. That gives you more time to innovate on commerce, moving your business forward instead of manually creating product sets for product detail pages. 

Retail merchandisers aren’t the only ones in a time crunch. Your customers are, too. And shoppers don’t want to spend hours scrolling through multiple pages to find the right gift combination. With AI functionalities like predictive sort, merchandisers can deliver more tailored product results, decreasing the time a customer spends looking for what they want and increasing conversion.  

Imagine two shoppers are browsing your site, one searching through the men’s category and the other perusing women’s. When they both search for “hoodie” products, AI can serve personalized search results tailored to each of their specific browsing histories. Without AI, the shoppers would spend valuable time sifting through a sea of unwanted items from the wrong categories. Predictive sorting enables faster, personalized experiences.

AI retail merchandising drives customer loyalty

Customers expect high-quality, personalized digital experiences. In fact, 56% of customers report that they expect offers to always be personalized. AI retail merchandising goes beyond increasing revenue and saving time — it has the power to make customers feel understood. Intelligent product recommendations, predictive sorting, and enhanced search signal to your customers that you’re listening to their needs. In turn, this drives loyalty and builds brand love. A whopping 88% of customers say that the experience a company provides is as important as its product or services. As potential customers enter your site, it’s more important than ever to give them a streamlined, personalized browsing experience they want to come back to.

What’s next for AI retail merchandising

With inflation on the rise, businesses are doing everything they can to increase operational efficiency and improve customer experiences. AI in retail merchandising can help brands cut costs, drive efficiencies, and increase customer satisfaction. In fact, most customers welcome the use of AI when they shop online, and they are beginning to expect it. A majority of consumers (69%) say that they are open to the use of AI to improve their experiences. Businesses and consumers alike understand that AI is now an integral part of shopping.