The Power Of AI And Personalization In Today’s Business Landscape

Businesses of all sizes across every industry are looking for ways to effectively leverage AI to interact with customers, drive personalized experiences, and operate with more efficiency. An estimated 71% of consumers expect a personalized experience when interacting with a company, and 76% get frustrated when that doesn’t happen, according to research from McKinsey.

As contradictory as it may sound, artificial intelligence (AI) is emerging as a critical driver for personalization. AI might be a technological tool, but that doesn’t mean it’s entirely out of touch with what humans want. That’s because AI relies on human input to deliver outputs for specific purposes. So, when AI is trained based on a quality and trustworthy data set, it can provide some brilliant outputs that offer personalized recommendations for individuals. It’s up to companies to recognize how to leverage AI to create personalized experiences that keep their customers coming back for more.

Understanding Effective AI Outcomes

The buzz around AI is growing, but quality and diversified data fuel its effectiveness and drive powerful customer connections. AI-driven personalization uses algorithms to analyze extensive data sets to allow for customized interactions on an individual level. These interactions can include anything from tailored text marketing messages to personalized service recommendations when a user lands on a company home page. “Many people don’t understand how AI works or the many ways it can be used to benefit humanity,” says Raj Chandrasekaran, CTO of True Fit, a personalization platform that helps online fashion retailers decode size and fit with AI for their shoppers. “When everyone has access to AI, it comes down to the data informing it. For us, we find that the strength of AI is its capacity to digest and learn from large volumes of diverse and quality data, making informed predictions and decisions that cater to specific people’s needs. With True Fit, we connect customer preference inputs with sizing data from thousands of brands and billions of transaction signals to help shoppers buy clothes online that they will love.”

This level of personalization is particularly beneficial in online retail, where consumer loyalty can be fluid. “Consumers don’t just want personalization; they demand it. With store and product loyalty more elusive, getting it right matters,” as explained in McKinsey’s Next in Personalization 2021 Report. AI can be a valuable tool for standing out and providing an enhanced customer experience. “Through algorithms, artificial intelligence can predict a customer’s probable product choices based on personal data, like browsing history and past purchases,” adds Stephanie Chevalier for Statista.

How AI Can Create A Personalized Experience

So, how exactly does a robot turn seemingly random information into unique experiences? It starts with giving it the correct data. By leveraging machine learning (ML), AI can analyze data and sort it into patterns, differentiating consumer behavior, preferences, and past interactions. This data can come from many sources, including browsing history, demographic trends, customer service interactions, customer feedback, and social media interactions. “In retail, trust is everything. Our unreasonable effectiveness of data is why True Fit can provide trustworthy recommendations at such breadth,” says Chandrasekaran.

While many have cited privacy concerns around data collection, most consumers are willing to trade data for personalization. “Consumers interested in product personalization generally show a high willingness to share data (92%). Most are prepared to share body measurements (66%), and more than half say they’d share product feedback (55%),” according to a report from Accenture.

AI’s in-depth analysis can help businesses offer tailor-made recommendations, services, and content to individuals based on their shopping patterns. “Having a high level of customization for your online store ensures that each customer encounter is uniquely aligned with individual interests and needs, which enhances the user’s engagement and satisfaction,” says Chandrasekaran. However, it’s important to note that collecting quality data takes time. “While AI can act quickly, getting the right amount of data is not necessarily a fast process. In a world where AI is accessible to all, the main differentiator is unique and proprietary data.”

As AI technology continues to evolve, the scope of personalization possibilities for digital stores and experiences will expand. The use of AI in personalization is just scratching the surface. As businesses continue innovating, the bond between brands and consumers will strengthen through more personalized and meaningful interactions. By leveraging AI to cater to customers’ preferences, companies can enhance customer satisfaction, improve engagement, and increase loyalty, ultimately driving growth and success.