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Advantages of Leveraging User Generated Content for Retailers

Advantages of Leveraging User Generated Content for Retailers

Customer shopping habits have changed rapidly over the past decade. Customers today are looking for retailers that they can connect and engage with. Retailers must also change their marketing methods to interact with customers in an organic manner and provide an authentic brand experience.

One of the methods that is gaining popularity is the use of user-generated content (UGC). UGC is social media content created and shared between customers. Consumers want to be recognized for their input and as a result, retailers can benefit from the online discussion of their products. UGC can allow retailers to engage with their customers before, during and after a purchase. It provides customers with opportunities to promote the brands they like.

UGC in Marketing

UGC goes beyond mere likes or shares on social media. Customers often upload well-captured photographs or videos of the product. This content may even include comments and feedback about their experiences while using the product. Customers also leave reviews or offer recommendations of products they’ve purchased and used. UGC lets existing customers speak to future customers.

Given a choice between believing an advertisement by a retailer or a recommendation by another person, consumers tend to choose the latter. In fact, 93% of the consumers feel that UGC is helpful when making a purchase decisions.

Customers are continually bombarded by advertisements, but the impact is especially powerful when a customer feels a connection with another customer's experience. UGC works best when the message is real and authentic.

For example, cosmetics retailers benefit when their customers share pictures while wearing their products. Make-up artists are very popular on Instagram and they endorse the cosmetics brands they like. Followers of these make-up artists see these recommendations as credible and as a result, they are more likely to buy based on the recommendations. This user generated content showcases how the product works with a practical example, and without a heavy sell by the manufacturer/retailer. The result is that the credibility of the make-up artist is translated to the product and subsequently to the manufacturer/retailer.

UGC in Customer Retention

As a retailer, your job is to attract customers. However, it is equally crucial for you to nurture existing customers. How often are you creating rewards or special offers based on your customers purchase history? Have you considered utilizing UGC to showcase related or compatible products to existing customers?

You've made a big investment in attracting and nurturing your customer base. Don't lose it!

  1. Find UGC for your products where ever it exists and get it in front of new customers. Let your existing customers and fans do some of the hard marketing work for you. 
  2. Use social media to create an online community where users can discuss the products they’ve bought and offer recommendations to each other. Repost the best content on your official channels.
  3. Encourage customers to discover and share multiple uses of a product. Use UGC to showcase the versatility of your products. This retains old customers while drawing in. Retailers can also hold events like sales to boost customer interaction.

Artificial Intelligence in Curation of UGC

UGC is a key element of a successful marketing plan. With the growth of social media, content is being created every second. This can become an invaluable resource. The problem is that most of this content is uncurated as it's published. 

Learn to leverage Artificial Intelligence (AI) to augment your marketing team. You can employ AI to curate UGC and use it for your benefit, by helping your human curation teams to curate faster and with higher accuracy. A side effect is that you can quickly become aware of product issues or bad publicity from a user review, and avoid the business risk associated with that. New ways of employing the content are coming out as the digital channels continue to diversify. You must curate UGC if you want to harness its power.

Trust is key. The conversations initiated by UGC can boost your bottom line. Nurture and reward your best content creators, and you'll see your customer base grow.

Of course with a growing customer base comes increased brand awareness, customer reach, and revenue.

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Kicking off Black Friday and Holiday Shopping with Artificial Intelligence

Kicking off Black Friday and Holiday Shopping with Artificial Intelligence

US retailers are making final preparations for Black Friday in both their physical and digital stores to support the expectation of high volume shoppers. 2018 holiday sales are estimated to climb between 4.3 and 4.8 percent over 2017 to between $717.45 and $720.89 billion – all due to the rising health of the economy, low employment records, and increasing wage margins.

While the economy has been improving over the past year, technology has also been making progress – both online and offline. This is especially seen with making more personalized recommendations through the use of AI and machine learning.

AI-Driven Personalization takes priority

With retailers increasingly leaning towards AI and utilizing AI-driven platforms, they are choosing more sophisticated platforms to make more personalized recommendations for their customers, ultimately increasing revenues for retailers and brands.
Some studies even concluded that brands that invest in creating personalized experiences leveraging advanced digital technologies and proprietary data for customers see a bump in their revenue by 6% to 10% – two times faster than those brands that don’t.

For the holiday season, and the upcoming Black Friday shopping, AI can be a wonderful tool used to automate the process of helping online and offline shoppers find what they want to shop for. Shoppers often have trouble finding a memorable gift for friends and family, but do not have a clear starting point – this may need browsing extensively through different e-commerce websites and searching through several aisles in different stores to find the right gift.

AI simplifies this process by giving retailers and brands the ability to ask their customers questions about their gift recipients and offering personalized recommendations based on individual tastes and preferences.
The use of AI-driven personalization for e-commerce channels has increased over the past few years, but according to experts, the future of AI is limitless – especially in the physical store. Furthermore, the future physical retail is believed to be a mix of the speed and convenience offered by AI with a human touch.

Customers want to be engaged through human interaction rather than special effects using light and sound, so retailers can do well to create community events and use data to offer personalized in-store experiences.

In-store Personalization to Support Retail Employees

As more and more technology is being integrated into the store environment, retailers need to move towards an autonomous management reducing the dependency on manual management by store staff. Recent studies even predicted retailers providing in-store recommendations to shoppers through AI engines to be the most mainstream in-store technology in the coming years.

Though AI is often pegged as a technology of the future, it’s a concept that is slowly taking shape and is not too far into the future. AI capabilities enable retailers to pursue customer personalization in real time – which will soon become a top priority becoming important for shoppers. The capability to display prices and promotions, which are subject to change, also coincides with the concept of a more personalized consumer-friendly store.

Conclusion

As we approach Black Friday – the official kick-off for the holiday shopping season, it will be interesting to see in which ways retailers and brands will leverage AI into their shopping strategies this holiday season. While personalized offers and promotions to enhance shopper loyalty will definitely be in the mix in the months of November and December, retailers can also take advantage of the data they receive to encourage repeat business throughout 2019.

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iphone with images on the screen

Visual Search: AI tool for E-commerce

Visual Search: AI tool for E-commerce

AI has been empowering many of the world’s top technology solutions. Within e-commerce, AI is being used to make the industry increasingly customer-centric. This can be seen with sales forecasts, product recommendation engines, virtual personal assistants like Siri or Alexa, AI-powered chatbots, automated warehouses, etc.

The need for visual search in e-commerce


Large e-commerce companies offer catalogs with thousands of products and plenty of options. Customers, however, are becoming increasingly impatient during the buying process figuring out what they want to buy in the shortest possible time. This hence poses the question of how to make the search process short and seamless.

In an important use case, AI has enabled search engines to become smarter. This can be seen when using text as a search query, the search becomes more semantic and conversational. AI has also enabled enhanced voice search features. The latest popular feature being search via images.

A new way of search

E-commerce companies are investing largely in integrating all three search methods on their websites to make a more responsive search platform. With text and voice search being increasingly used for products such as electronics, visual search aids customers to find an easier alternative for fashion and lifestyle products which may be difficult to describe with words. For instance, when searching for outfits worn by celebrities, knowing the right keywords would provide the outfits that are indexed with those keywords. Most often than not, the right outfit is not found. With visual search combined with indexed images, the right outfit can be found in just a click!

Today, visual search has increased the level of engagement that customers have with e-commerce websites as well as offline retailers. Be it for searching a product page online or being provided with relevant product recommendations, smartphone apps are becoming more accurate and faster at predicting the customer needs.

Visual search has created new shopping experiences for online and offline retail stores. Customers can now scan images of their choice of products whether it is online or in a store. Providing relevant and accurate product results will ensure that users can shop from anywhere and at any time.

AI and visual search: The tech

Visual search is a very recent trend, and this has been possible only due to the recent advancement in this technology. Visual search is built using Deep Neural Networks, a subset of machine learning. This in fact built as a replica of the neural networks in the human brain.  To put it simply, Deep Neural Networks make machines intelligent to gather and categorize information in the form of text, images or videos like humans do, using their biological neural network.

For example, To make a machine understand a sofa using deep learning, it is first shown pictures of thousand sofas. The algorithm reads and extracts features that can collectively classify a sofa such as a backrest, armrest, cushions, etc. After this, if a new image of a sofa is shown, the machine would be able to now tell if the image has a sofa or not.

Furthermore, if a complete picture of a living room is shown, the machine can individually identify different objects that it has been trained via deep neural networks such as rocking chair, coffee table, rugs, side table, etc. This technology is very adaptive - it recognizes a user’s search pattern so as to provide accurate purchase predictions.

Deep learning technology, providing accurate results can ensure that users find exactly what are searching for, in a short search span. This helps enhance user experiences, which in turn, leads to an increase in conversion rates. Neural networks and deep learning provide the best solutions to problems being faced in image recognition, speech recognition, and natural language processing.

Visual search has become one of the most successful technological innovations in e-commerce and retail, in turn, boosting the effectiveness on a global scale.
With the tremendous emphasis on digitization and the rising economy, this holds a strong promise.

Today, companies are looking for product differentiation through tech and visual search advancements offer just what they are looking for.

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woman holding chips and smiling

Personalization: The future of e-commerce

Personalization and recommendations: The future of e-commerce

Commerce has evolved over the span of 100 years. Over the century, it went from being driven by demographics in the 1890s - with retail catalogs offering a limited product selection to being driven by brands in 1990s - with stores and malls offering a rising product selection. With the advent of the world wide web, commerce was driven utility - with the rise of now e-commerce giants eBay and Amazon. In the 2010s, data began taking over as the driving trend.

The current trend

An indication of data-driven e-commerce are personalized e-commerce offering, curated product discovery and 24/7 recommendations. Many e-commerce and retail companies now have incorporated some level of personalization whilst engaging with their customers.

 The best examples can be seen with websites like Netflix - from the time a customer watches their first movie or show, Netflix’s algorithm starts working. They have been so successful at tracking customer preferences that they are spending almost 8 million dollars to keep up with the demand. They’re even using e-commerce personalization to affect the graphics for their shows.  Customers can get to see one of many different graphics of a show based on their preferences that Netflix knows about.

Another example on the other spectrum would be Subscription boxes like Stitch Fix, a personalized style service. Using the preferences provided by the user, Stitch Fix would deliver the best 5 items to suit them in the comfort of their own homes. Based on what customers keep and what they return, they personalize the clothes even further.

wooden box filled with condiments

Personalisation completely relies on data gathering to be effective, which depends on the customers as they have to be willing to trust and share their information with a brand. The brand can then, enhance their experience and engagement using this data. It becomes a win-win situation when carried out efficiently, the use of data will correlate positively with customer satisfaction.


While this is the current scenario of how companies are using some elements of personalization today, here are some predictions about how personalization will play a more substantial role in the near future.

The rise in Subscription services

Customers are slowly evolving from product purchases to subscribing. This is due to the rise in personalization - the leading factors driving the growth of subscription-based services. There is plenty of evidence suggesting that subscription services are the future of e-commerce or at least a big portion of it.   

Digital subscription services such as Netflix, Amazon Prime or even Spotify are now the driving our entertainment consumption, while retail subscription services like Birchbox, Dollar Shave Club and Stitch Fix have started becoming more and more popular among consumers.

We have already demonstrated with Netflix, how personalization is breaking ground, another example could be Spotify, with their paid subscribers rose from 0% in 2008 at its launch to 45% in 2017. In other words, if a service is available for free, yet its paid counterpart is providing a better and compelling experience, consumers will not hesitate to invest.

wooden box with bath supplies

Spotify uses personalization to effectively nurture its recommendation engine - which provides daily discoveries of music based on a user's preference of songs, artists, genres, etc. This has not only increased the app preference amongst users but also increased the exposure of new artists enlisting their albums & singles on the platform.

Automation to support omnichannel marketing

Automation and personalization largely go hand in hand.
In the next few years, automation will play a massive role especially with the growth of omnichannel marketing. A study conducted by The Harvard Business Review among 46,000 shoppers in the span of a year stated that only 7% of that group solely shopped online, 20% shopped solely in stores and a whopping 73% shopped using multiple channels.

Omnichannel marketing has challenges yet tremendous opportunities that companies will be able to leverage to utilize automation in the near future and the companies that would be able to leverage it would only be those that can efficiently utilize automation so as to offer personalization across all channels.

Personalised deals and pricing

Shoppers today not only differ on what they want to buy but also on what they would be willing to pay for. Traditionally, companies had to study different price ranges so they would pick on what would give them the most profit, even if this meant that they’d turn down potential customers.

This is now slowly changing. Personalisation is giving way for companies to charge individual shoppers. For instance, Orbitz used to charge Mac users more - based on the assumption that that demographic tended to have more spending power. Hence, it stood to reason that they were willing to pay more.

With the advent of AI and machine learning, companies in the future will easily be able to get into the granular details. This, in turn, will enable more people to get the products and services that they require at an accurate price point based on their past buying decisions. This approach will help e-commerce companies to build attractive bundles or tailor-made promotions for individuals.

AI and Machine Learning

Leveraging AI and machine learning, personalization can scale new heights by anticipating customer support needs before they even have them.

Furthermore, machine learning will also change the language that websites use based on the visitors it gets. In a scenario where a user needs help, machine learning would allow the site to find the best answers based on the information instead of the standard replies that most websites give now.

If the site knows that a returning shopper is looking for some products with respect to a previous purchase, they will be able to recommend the best products but also further provide them with relevant content that would help them make the purchase.

Looking ahead

E-commerce personalization is already here, so if retail or e-commerce businesses have not utilized it yet, they must start now. With more and more innovations coming in, the horizons are widening day by day. These predictions can ensure that your business is on the right path towards personalization.

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