By Christine Kern, contributing writer
More than 86 percent of CMOs are planning to invest in machine learning and AI in 2017.
Machine learning and AI are expected to be big with retailers in the coming year, as more than 86 percent of CMO’s say they are planning to invest in it in 2017, according to a study of 100 marketing leaders by Persado. “Building Lasting Consumer Relationships in Retail,” conducted in-depth interviews with CMOs and other marketing leaders at US- and UK-based major retailers to determine how retailers are attempting to connect with customers on the personalization front.
The results revealed that despite their valiant efforts to provide relevant content and experiences, most continue to fall short of customer expectations. The study found that part of the problem is the way the companies are currently personalizing: marketers are relying too much on demographic and geographic data while underutilizing behavioral data, lifecycle stages, and psychographic indicators like emotional triggers, according to the results. Now, Retail CMOS say they are turning to AI solutions to help overcome these shortfalls and engage their audiences in a far more personalized manner.
The study found:
- 47 percent of respondents said they plan to invest up to $50 million in the technology, while a quarter plan to spend over $100 million on it.
- The most challenging issues for CMOS were applying learnings from past campaigns (34 percent) and effectively targeting unique audiences (26 percent), followed by predicting campaign performance and scaling content across campaigns and digital channels (each at 24 percent).
- Effective customer engagement topped the list of benefits that marketers hope to receive from an investment in AI, where engagement "is considered foremost as a driver of revenue (37 percent) and to a much lesser extent, brand awareness (13 percent)," the report states.
- Despite the possibility of using technology to drive personalization, only 22 percent of those surveyed felt skilled at emotionally engaging customers through their content, something the researchers believe might be a result of data collection that is limited to demographic and location data.
The study concluded that “emotion is key: to create the relationship that both consumers and brands are seeking, retailers must tap into language that strikes the right emotion.” That’s where AI can help. And more than 1 in 3 marketers said they need a system for capturing and analyzing the emotional profiles of their audience segments.