How data and genAI are helping retailers boost conversions in a tough economy
How Data and Generative AI Are Transforming Retail Conversions in a Challenging Economy
In today’s difficult economic climate, marked by inflation and reduced consumer spending, retailers face growing challenges to maintain and expand their market share. To survive and thrive, adopting data-driven e-commerce strategies is becoming not just advantageous but essential. This article explores how leveraging data analytics and generative AI (GenAI) technologies can boost online retail conversions despite fierce competition.
Harnessing Data for Personalized Customer Experiences
Data marketing plays a pivotal role in creating personalized shopping experiences, plugging potential leaks in the conversion funnel, and ultimately driving measurable revenue growth. Retailers that use data insights can better understand customer behavior, refine targeting, and tailor product recommendations, which enhances shopper engagement and loyalty.
The Rise of Generative AI and its Impact on Retail
Generative AI tools have rapidly increased traffic to retail platforms, necessitating a new optimization approach called Generative Engine Optimization (GEO). This complements traditional SEO methods to capture consumer attention more effectively through AI-enhanced content and product feed optimizations.
Manual tweaks to product titles and descriptions are no longer feasible at scale, so automation powered by GenAI is being employed to optimize product feeds. For example, a collaboration with sporting goods brand Salomon resulted in a substantial uplift: a 43% increase in click-through rates, 81% rise in conversions, 34% greater ad spend, and an 83% boost in revenue, effectively doubling return on ad spend through AI-driven catalog enhancements.
Continuous Conversion Rate Optimization (CRO) Through Data
Beyond acquisition, retailers are focusing on ongoing conversion rate optimization with structured testing roadmaps. Retail giant Hugo Boss implemented a ‘CRO Factory,’ conducting 60 targeted tests to improve user experience across devices, yielding an 11% increase in desktop conversions and 22% on mobile.
Addressing all points of friction in the customer journey, especially abandoned shopping baskets, is critical. Personalized, timely communication via email and SMS significantly increases completion rates, as demonstrated by a UK electronics retailer that boosted revenue from abandoned baskets by 72% over five years.
Key Takeaways
- Data-driven marketing enhances personalization and prevents conversion funnel leaks.
- Generative AI enables scalable, automated optimization of product data, increasing traffic and conversions.
- Continuous CRO testing improves user experience and conversion rates across devices.
- Recovering abandoned carts through personalized outreach can dramatically improve revenue.
Conclusion
Despite the economic headwinds and escalating competition, retailers who strategically implement advanced data analytics and generative AI technologies can optimize marketing efforts, enhance the customer journey, and significantly increase profitability. Expert application of these tools will be crucial for standing out in a saturated digital marketplace and successfully guiding consumers through the sales funnel.
Source: https://martech.org/how-data-and-genai-are-helping-retailers-boost-conversions-in-a-tough-economy/