The need for more effective and efficient personalization strategies is pushing artificial intelligence into the priority column on comms budgets, and an urgency to capitalize on new AI-focused techniques has many marketers ready to spend big before year’s end, according to new research from content marketing agency WBR Digital and engagement firm Persado.
The new jointly published report, Building Lasting Consumer Relationships in Retail, shows that 86 percent of retail marketing leadership have planned to invest in AI/machine learning solutions in 2017. A majority of those (47 percent) are looking to spend up to $50 million on AI, but a quarter are budgeting as much as $100 million.
The study found that effective customer engagement is expected to be the primary benefit of implementing AI, where “engagement” is considered foremost as a driver of revenue (37 percent) and, to a lesser extent, brand awareness (13 percent).
Expected benefits of implementing AI and machine learning in marketing:
Retail marketers look to improve engagement by providing more relevant experiences, but continue to struggle with personalization
On a scale of 0 to 4, with 0 as least effective and 4 as most effective, marketers find that they could do a better job with personalization techniques such as tailoring product recommendations (2.85), segmentation (2.53), offering personalization (2.49), and personalizing content (2.13).
Even with an onslaught of tech innovation giving retailer marketers deeper insight into what motivates audiences on a personal and emotional level, their ability to activate this insight is stunted. For example, only 22 percent of respondents believe they are skilled at applying emotion to content. Furthermore, retailers’ personalization techniques are typically limited to the basics of demographic and location data.
The biggest roadblocks to AI adoption:
“Most major retailers have more data than they know what to do with or have the capacity to process,” said Ryan Deutsch, SVP of global customer success at Persado, in a news release. “AI and machine learning allow marketers to generate insights for sure, but the key is to leverage the machine towards a particular purpose, and to one that actually drives results.”
Percentage of respondents who consider these issues challenging, or very challenging:
The report shares the results of a survey of 100 CMOs and other senior marketing executives, conducted by WBR as in-depth individual interviews in March 2017. Headquartered in the U.S. and U.K., participating retail brands include Best Buy, Marks and Spencer, Williams-Sonoma, Urban Outfitters, and Nordstrom, among many others.