Can Agentic AI fix retail’s personalisation crisis?

Can Agentic AI fix retail’s personalisation crisis?

In today’s digital age, personalisation has become a key differentiator for retailers looking to stand out in a crowded market. However, despite the best efforts of many retailers, personalisation remains a major challenge. In fact, a recent study found that 80% of consumers are frustrated with the lack of personalisation in their shopping experiences. The good news is that Agentic AI, a cutting-edge technology, has the potential to revolutionise the way retailers approach personalisation, effectively addressing the crisis.

So, what is Agentic AI, and how does it work? In simple terms, Agentic AI is a type of artificial intelligence that adapts to each shopper’s behavior in real-time, recommending products, dynamically bundling offers, and adjusting prices on the fly. These intelligent agents learn from browsing patterns, past purchases, and inventory data to deliver personalised journeys at scale – making mass customisation a standard, not a luxury.

The Problem with Traditional Personalisation

Traditional personalisation methods rely on static segmentation, where customers are grouped based on demographic data, such as age, gender, and location. However, this approach is limited, as it fails to take into account the individual’s behavior and preferences. As a result, customers are often bombarded with irrelevant offers and recommendations, leading to feelings of frustration and disengagement.

The Rise of Agentic AI

Agentic AI, on the other hand, addresses these limitations by using machine learning algorithms to analyze vast amounts of data in real-time. This enables the AI to understand the customer’s preferences, behavior, and purchasing patterns, allowing for highly tailored recommendations and offers.

The benefits of Agentic AI are numerous. For instance, it can:

1. Improve customer engagement: By providing relevant and timely recommendations, Agentic AI can increase customer engagement and conversion rates.
2. Enhance customer satisfaction: Agentic AI can help retailers deliver a more accurate and meaningful shopping experience, leading to increased customer satisfaction.
3. Reduce churn: By providing customers with a more personal and relevant experience, Agentic AI can help reduce churn and increase customer loyalty.
4. Increase sales: Agentic AI can help retailers identify new revenue streams by recommending products that customers are more likely to purchase.

How Agentic AI Works

Agentic AI works by using a combination of data sources, including:

1. Browser data: Agentic AI can track a customer’s browsing behavior, including the products they view, search, and abandon.
2. Purchase history: Agentic AI can access a customer’s purchase history, including the products they’ve bought and the frequency of their purchases.
3. Inventory data: Agentic AI can access real-time inventory data, allowing it to make recommendations based on availability and stock levels.
4. Customer data: Agentic AI can access customer data, including demographics, preferences, and behavior.

Using this data, Agentic AI can create a unique profile for each customer, allowing it to make highly tailored recommendations and offers. For example, if a customer has previously purchased a specific product, Agentic AI can recommend similar products or offer a discount on a related item.

Real-World Examples of Agentic AI in Action

Agentic AI is already being used by several retailers to drive personalisation and revenue growth. For instance:

1. ASOS: The online fashion retailer uses Agentic AI to provide customers with highly tailored product recommendations, resulting in a 20% increase in conversions.
2. John Lewis: The UK-based department store uses Agentic AI to deliver a more personal shopping experience, resulting in a 15% increase in sales.
3. Sephora: The beauty retailer uses Agentic AI to provide customers with personalized product recommendations, resulting in a 10% increase in conversions.

Conclusion

The Agentic AI revolution is here, and it’s changing the way retailers approach personalisation. By providing a more tailored and relevant shopping experience, Agentic AI has the potential to drive revenue growth, increase customer satisfaction, and reduce churn. As the technology continues to evolve, retailers that adopt Agentic AI will be well-positioned to stay ahead of the competition and deliver a more personal shopping experience that meets the evolving needs and preferences of their customers.

Source: https://www.growthjockey.com/blogs/agentic-ai-in-retail