Boosting customer spending through automated digital marketing strategies that expand exponentially
In today's picky consumer market, it's not low prices that are driving purchase decisions in the year 2024, as per research from Qualtrics. Instead, the buying and post-purchase experiences are the main factors influencing consumer decisions. For retailers, convincing customers to buy more depends on their ability to provide high-relevance, hyper-personalized experiences. Luckily, AI-powered merchandising tools can make this a reality.
Crafting Tailored Shopping Experiences
Retail has stepped into a new arena where hyper-personalized experiences become the norm. University of Helsinki researchers suggest that boosting the relevance of product suggestions can boost revenue by up to 30%. Thanks to AI, merchandisers can leverage various data points to make recommendations tailored to each customer. Consider a message like this: "This top matches perfectly with the pants in your cart and the shoes you bought last time.by the way, we still have two left in your size".
Evolution of Product Bundling
Product bundling, where retailers suggest curated collections of complementary products, isn't new. Yet, this practice remains an untapped revenue source for retailers relying on manual processes. Lee Loomis, director of product development for Monetate, a personalization platform, explains that "conventional product bundling is incredibly labor-intensive, with someone sifting through spreadsheets to create bundles. As a result, only a small percentage of a retailer's catalog can be featured in recommended bundles." AI-powered dynamic bundling blends expert merchandising with recommendation algorithms to create relevant product groups across an entire catalog, scaling beyond manual limitations. "With a single person in just a couple of weeks, you can achieve high catalog coverage, whereas five people working all year can only hit 10%," Loomis notes.
Building Trust with Social Proof
Effective selling often involves having customers do it for you. Social proof, like five-star reviews, has long been used to build trust and encourage customers to buy. AI can even make social proof messaging relevant to individual customers. Lee Loomis shares, "We feel more confident about a purchase when we add a bestseller to our cart or learn that 100 other people bought this product today, making us more likely to buy as a result."
Post-Checkout Persuasion
Upselling and cross-selling shouldn't end with a completed transaction. Monetate's digital merchandising solutions allow retailers to sway customers to add related items relevant to their order, even post-checkout. For instance, this could be offering incentives for a related purchase immediately following a transaction on a thank-you page, emailing custom bundles to customers, or displaying those recommendations on the retailer's home page.
Testing for High-Converting Elements
Data is more reliable than gut feelings when it comes to driving revenue. High-converting retailers continually test digital merchandising rules, messaging, placement, and more. The challenge is identifying where to start testing. Monetate's Journey Analytics tool provides insights to help segment and compare the performance of multiple campaigns, so retailers can optimize areas with low performance.
Picking the Right Digital Merchandising Solution
When choosing a digital merchandising solution, consider the level of control you want, the capabilities that matter most, the pricing model, and the provider's track record.
Staying Competitive
To remain competitive, retailers must treat customers as individuals and "make the custom fit the customer," as Euromonitor recommends. Liza Amlani, principal at the Retail Strategy Group, says, "Retailers should not just invest in inventory management and insight solutions but also in process innovation to simplify work processes that focus on driving customer demand with the right product at the right time, in the right place, and ensuring they win in 2024."
To learn more about hyper-personalized buying journeys and their impact on revenue: Download Monetate's Unrivaled Personalization Playbook.
- In the year 2024, the buying and post-purchase experiences are the main factors influencing consumer decisions, according to Qualtrics' research.
- University of Helsinki researchers suggest that boosting the relevance of product suggestions can increase revenue by up to 30%.
- AI-powered merchandising tools enable retailers to provide high-relevance, hyper-personalized experiences, helping them sell more.
- AI-powered dynamic bundling combines expert merchandising with recommendation algorithms to create relevant product groups across an entire catalog.
- Social proof, such as five-star reviews, can build trust and encourage customers to buy, and AI can make these messages relevant to individual customers.
- Upselling and cross-selling shouldn't end with a completed transaction, and AI-powered solutions can persuade customers to add related items even after checkout.
- Data is crucial for driving revenue, and retailers should continually test digital merchandising elements to optimize their performance.
- To stay competitive, retailers should treat customers as individuals, invest in process innovation, and choose digital merchandising solutions that best suit their needs.
