by Artificial intelligence has become an industry signifier that a brand is innovating to better understand and meet growing customer needs more effectively. However, furniture retailers are now faced with the unique challenge of safely bringing AI into automated communications in a way that feels authentic to their customers. For furniture retailers, driving traffic and sales is as much an art as it is a science. So, having AI tech in the toolkit, with the right training and dataset, can help get the job done.
Retailers know there is an elusive “magic moment” to reach out to customers — when they are most likely to engage with communications, automated or not. But these “magic moments” vary from customer to customer and heavily depend on context and circumstances, presenting a unique challenge to furniture retailers when finding the ideal moment to reach out. That’s where AI can help.
By analyzing data on individual customers, from previous interactions to understating their entire profile, AI can help determine when to reach out to maximize communications. Here are five ways furniture retail brands can ensure AI is helping perceive customer needs and truly working for the company:
Develop an Accurate View of the Customer
To truly harness the power of AI, it’s crucial to develop an accurate, single view of your customer to feed your AI solution the most accurate and up-to-date information on your target customer. This involves analyzing data across various systems, including your point of sale and delivery systems, as well as any online interactions. Whether a customer provided a landline phone number from years ago, a mobile phone number now or several different email addresses over time, consolidating these details into one comprehensive view is essential.
A unified customer view means integrating all available information from all channels. A customer that has purchased from your brand for many years should have an extensive profile with a cohesive view of their purchasing history. This approach allows AI to examine a customer’s entire purchasing journey, recognize patterns and predict future behavior and needs.
Ensuring You Have a Long-Term Perspective
Having a long-term view of customer data is crucial for generating more accurate insights, and so is the quality of data collected. In fact, the idea that people are “only as good as what they eat” applies to AI as well. Feeding your AI high-quality, comprehensive data over an extended period produces better outputs and predictions.
Typically, a five-year minimum perspective allows for a deeper understanding and anticipation of customer behavior. However, the specific time period to consider can vary depending on your industry. A shorter time frame might suffice for short-term purchases, but generally, the longer your data span, the more accurate your predictions will be in understanding customer behavior and market readiness.
Organizations like the National Retail Federation use models like Recency, Frequency and Monetary analysis, which is a marketing technique used to quantitatively rank and group customers based on the recency, frequency and monetary total of their recent transactions to determine customer engagement and spending patterns. Looking at industry benchmarks for the average time span used in such analyses helps ensure your data set is robust enough to make accurate predictions.
Using Cookies and Purchased Data
Don’t be shy about utilizing your purchased data because AI excels at recognizing trends through cookies. Many mature organizations have been purchasing third-party data for years, and overlaying this with your internal data can amplify your insights. Even with the challenges posed by cookie acceptance and Chrome’s delay to phase out cookies until 2025, there are still opportunities to utilize third-party data from recent subscriptions to web traffic based on IP addresses. All of that invaluable information can help AI predict upcoming purchasing trends.
For instance, if customers have recently purchased decking materials and tools, it would be an ideal time to target them with promotions for patio furniture. Recognizing and acting on these trends can significantly enhance the customer experience and help you capture more wallet share.
Painting the Broader Environmental Picture
AI’s effectiveness increases when it includes broader environmental factors that seem unrelated to your specific customer. Your environmental picture should include political, economic and social influences. Something as broad as increased fuel prices or changes in insurance coverage for particular regions can change a customer’s purchase intention from that luxury patio set to a more affordable option. In fact, high-end lipstick sales often increase during economic uncertainty because consumers still want to indulge in luxury, even if on a smaller scale.
Incorporating these broader factors into your AI strategy helps in understanding the psychological aspects of buying behavior. Customers’ emotional responses to their perceived needs and the overall economic environment play a crucial role in their purchasing decisions. Including these insights ensures that your AI is well informed and capable of making more sensitive predictions and recommendations.
Delivering Fully Informed, Personalized Messages
Personalized communication is crucial for engaging customers effectively. A brand that understands its target audience will create personalized and effective messaging; however, it is useless if it isn’t reaching the customer in their preferred channel. AI can help inform brands if an email, text message or even a phone call on a traditional landline will facilitate a two-way dialogue, enhancing customer relationships and loyalty.
AI enables businesses to segment their customer base accurately and customize messages accordingly. For instance, customers interested in sports equipment might appreciate updates on new arrivals in that category, whereas those interested in home decor might prefer tips and ideas for home improvement projects.
A multichannel communication strategy ensures businesses can engage customers across their preferred platforms. This not only increases the chances of message delivery, but also fosters opportunities for customers to provide feedback and actively interact with the brand.
Final Thoughts
Ensuring AI works for you involves more than just implementing the latest technology. It requires a strategic approach that combines accurate data analysis, a broad understanding of the environment, personalized communication and comprehensive views of the customer. Once you have that, AI can serve as a well-loved tool in your marketing toolkit.
Tara Kelly is president and chief executive officer of Splice Software Inc.
