A new Forrester Consulting study commissioned by Emarsys, “Building Trust and Confidence: AI Marketing Readiness In Retail and eCommerce” explores the readiness gap in applying AI, specifically in the retail and e-commerce sector. Arguably, this should be the area of business with the earliest adopters, considering the arms race that has taken place in e-commerce, which deploys a vast array of technologies that make digital cash registers ring faster.
The study surveyed 717 marketing decision-makers at retail and e-commerce businesses
with revenues from $50 million to $5 billion, in the U.S, U.K., Germany, France and Australia. It identified four categories of AI readiness across three dimensions of strategy, organization and
1. Experts (11%), who “demonstrate true AI readiness across all three dimensions.”
2. Opportunists (34%), who “excel at two of three dimensions.”
3. Novices (28%), who “excel at only one of the three dimensions.”
4. Laggards (27%), who “clearly struggle across all dimensions.”
Overall, most organizations (72%) expect to implement AI marketing technologies within the next six to 12 months, and have goals of meeting the following meaty objectives: to drive revenue growth, better serve existing customers, meet rising customer expectations, remain competitive and improve / strengthen the brand.
So why hasn’t AI adoption moved more quickly, given everyone realizes the benefits of using AI technology can be significant?
The main issue, according to the study, is that many marketing organizations are grappling with entirely new challenges managing and leveraging data: “Thanks to the digital age, 90% of the data accumulated in the world today has been created in the last two years.”
So there is new complexity to organizing, cleansing and understanding this data, but this is the very same reason AI presents such an enormous opportunity: “Understanding these mountains of data exceeds human cognitive capacity, which creates an ideal scenario for unleashing AI marketing technologies.”
Allen Nance, global chief marketing officer of Emarsys, points to the fact that retail and e-commerce businesses are tailormade for AI implementations, based on the vast amounts of data and volumes of images that are naturally part of their infrastructures. But if they don’t get going, it’s likely they will be eating their competitors’ dust.
Nance notes, “The vast majority of websites fall into two categories: they change or they don’t change (UX) – winners and losers. You either don’t do, it and you’re losing or you do it and you’re winning.”
Of course, he is referring to AI technology that can leverage a brand’s image and text assets to generate thousands -- even millions -- of versions to present the most likely messages that will result in sales. Nance emphasizes, “The people who win in AI will be exceptional in managing their data, because AI needs a data structure set to teach an algorithm.”
But in order to work with AI platforms, a marketing organization has to be “data-ready.” Nance says, “If a company is just at the point of organizing their data, AI can’t help them.”
The study indicates the issues most businesses will need to address to master their data strategies. At the top of the list is a lack of technical skills (66%), and a lack of appropriate product marketing skills (65%) among internal staff. Another issue is that standard marketing processes are set up to gather and apply customer insights sequentially and iterate campaigns. AI will require a reorganization of business processes in order to address customer’s needs in real time.
E-commerce players that are mastering AI indicate they are reaping the rewards: “49% of experts and 33% of opportunists consider themselves the fastest growing organizations in their industries, compared to just 13% of novices and 8% of laggards.”
Cosabella, an Italian lingerie brand that sells its products around the world (an Emarsys client), falls into the expert category. The company is dedicated to “operating at the forefront of AI technology,” according to CEO Guido Campello, who asserts his intent “to lead in technology while offering innovative fashion products to deliver the perfect experience to our customers.”
Providing the “perfect experience to customers” is the name of the AI game, which, according to study respondents, will “reinvent the retail industry” (88%) and “dramatically change what the company does” (81%.) Given that many companies are reshaping their entire business processes around AI technology, no wonder this is taking some time. But it will be important to get right, as AI will separate the next generation of winners and losers in retail and e-commerce.