Retail was in a state of dramatic change before COVID-19. Now it’s in crisis mode. In April, retail sales fell 16.4%, the largest-ever decline on record. Sales at non-store retailers, a category that would include e-commerce sites like Amazon, increased 8.4% in April. Sales at clothing and accessories stores, meanwhile, plunged almost 90%. As a result of this crisis, the big retailers without long-term debt issues are likely to get bigger and their position stronger as they reach into their deeper pockets to adapt. Their advantages in pricing and delivery time will only grow. Competing against them on such dimensions will be a non-starter for most companies.


Knowing that the big will only get bigger, with lower prices and faster delivery times—and that customer outlook, behavior and norms are evolving—how does a retailer win share and customer loyalty? If you can’t be faster or cheaper, make your customers feel respected, special, seen and heard. Don’t compete to win their impatience or thrift; fight for their trust. Win their hearts. Understanding these shifts and responding with personalized offerings and messages may be key for retailers to differentiate, and AI is the most effective way to deliver personalization.

So what are the critical steps in developing your ability to personalize?

  1. Think dynamically. Consumer preferences have shifted significantly, with customers becoming more cost-conscious. While it’s true that many customers will gravitate toward lower costs, others will look to brands they trust during times of uncertainty as it tends to signal reliability. New consumer habits are also emerging. In this new reality, customers may not even know exactly what they want until you present it to them. Allow for a changing landscape and be prepared with an agile mindset that best supports it. For instance, Frito-Lay launched a direct-to-customer site to respond to the recent snacking surge. Other CPG companies are likely considering different modes of marketing or even new product categories as new habits emerge.
  2. Understand your customers. What mechanisms can you put in place to learn more about your customers? What are their behaviors, needs and attitudes? Are there data sources beyond market research that can provide insights? For example, syndicated location intelligence data can help retailers monitor behavior at a more granular level and help them gain a better understanding of consumer behaviors and preferences.
  3. Match offers to needs. With an enhanced understanding of where customers find themselves in the sales cycle, what offer should you make so that you move them to the next stage? If a customer is aware of your brand, how do you get them to move from awareness to trial to adoption to brand champion? Let the customer indicate how they feel about your promotions (such as “thumbs up” and “thumbs down” buttons), so that rapid feedback helps you better understand what’s resonating with them.
  4. Test. Algorithms can make predictions that certain offers may work, but how do we know if they will work? The ability to rapidly test to determine what works before investing time, money and effort is a critical capability.
  5. Learn and adapt. Finally, the ability to learn quickly and adjust to new realities and customer behaviors, preferences and needs is critical to success in this new normal. Be prepared for new norms. Some of them can’t be predicted, but others are obvious. Increased work from home is likely to be permanent. With consumers working from home, grocery shopping from home and seeing doctors from home, digital consumption is likely to increase beyond the lock down. We’re already seeing this kind of adaptation in action. The NBA now sells team-branded face masks. Zappos launched a customer service site for anything—from help picking out a wall color to post-pandemic vacation planning—no purchase necessary. And Walmart is establishing drive-through testing for COVID-19.

How might this advice play out end to end? If you’re a retail clothing brand, you’ve most likely been adversely impacted by the crisis. Understand your customer base and see which consumers or segments are responsive now or likely to be responsive to promotion. Maintain awareness with these consumers through personalized, digital outreach in order to establish a connection, including how the brand is faring in order to build trust and follow up with useful, personalized recommendations. These communications need to be thoughtful and relevant based on information about your customers and their needs. Activate your responsive customers and drive sales.


How can you accomplish all this? AI is made for precisely this task and can be seamlessly integrated with many automation mechanisms and tools. It can handle large volumes of data, and it can create and manage more segments than a human can, in a fraction of the time. Leverage machine learning to make offers to customers while it learns from their responses and suggests adaptations. Set up experiments and A/B test your ideas and keep your adaptations as nimble as our changing world demands.  


Yes, the world has been transformed and is in a continued state of flux and uncertainty. Yes, budgets are frozen, hiring is frozen, sales are down. But if there’s any room in your budget to plan for your company’s future, now is the time to begin that work. Given what we already know, we can make some educated guesses about the competitive landscape. We know some of the consumer trends that we can expect in the months and years to come. And finally, we have the technology at our disposal to create a system that can respond to what we know now while being nimble enough to adjust as the world continues to change rapidly. Your future may depend on how you prepare for what’s to come. Now is the time to invest in AI and personalization.


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