3 Proven AI Strategies to Boost 2024 Holiday Retail Sales

The U.S. holiday shopping season is almost here, and most retailers anticipate another record-breaking year. In fact, analysts at eMarketer predict that consumers will spend more than $271 billion, a 9.5 percent increase in domestic holiday retail e-commerce sales over 2023.

Being a winner of the upcoming holiday season may come down to a retailer’s ability to leverage new developments in artificial intelligence to improve the online shopping experience.

AI continues to be top of mind as a way to optimize the online experience. Yet retailers and consumers alike remain wary of AI-generated recommendations. With these factors in mind, here are three safe, AI-driven actions retailers can use to make the most of the next several months without disrupting existing strategies:

1. Cleanse your top selling product data.

It used to be that cleansing product data was a never-ending process that became more complicated with multiple sales channels and unsynchronized data. It also used to be that customers took a predictable path to purchase along those sales channels. AI and new ways of searching have disrupted the traditional customer journey. Now, there are multiple entry points that bypass a retailer’s home page and bring shoppers directly to a product page. These pages are often designed to appeal to the majority of buyers while lacking personalization.

AI now makes it easy to accurately update, enrich and syndicate product information for consistent and relevant experiences. A generative AI assistant can then be easily added to provide intelligent, easy-to-understand recommendations explaining why a product is the right fit for a buyer. These simple actions have historically enabled retailers to increase online conversions from single to double digits.

2. Close the retail labor gap and deliver consistent omnichannel customer experiences.

The shortage of qualified labor in retail persists and seasonal hires can’t help if they don’t have a mastery of your inventory. But you can fill labor gaps using AI-driven conversations that are presented to shoppers and sales reps through a store kiosk or available online.

Supported by clean product data, AI can guide the shopper through a handful of simple questions to narrow the selection process. When consumers spend time answering questions, reward them by presenting the right products based on their needs, not the brand’s incentives.

This eliminates choice paralysis caused by an overwhelming amount of search results. It also reduces in-store wait times and abandoned online shopping carts while delivering a more consistent omnichannel experience. Another benefit of recommending the perfect product is combatting high return rates, which is especially important as the average return rate for online purchases continues to rise, now sitting at 15.2 percent.

3. Build customer trust to boost sales and reduce returns.

Using zero-party data is one of the most trustworthy actions a retailer can take. Much like a retail store associate forgets a customer’s details after the conversation ends, the same holds true for online engagement. Instead of tracking customers with the hope of a future sale, use zero-party data to close the sale now.

This builds trust, closes more sales, and reduces the likelihood of returns. In fact, trusted companies have been shown to financially outperform their peers by up to four times, and customers who trust a brand are 88 percent more likely to buy again, according to Deloitte.

While AI remains front and center in retail conversations, concerns are warranted. Deloitte’s report found that half of retail executives are prioritizing AI-driven personalized product recommendations, but only five in 10 are confident in their company’s ability to use AI effectively across their businesses. For the 2024 holiday season and beyond, start slow and make sure the product data feeding AI is clean, high quality, accurate, and built on zero-party engagements. Small actions now will set the foundation for a lucrative holiday season and longer-term customer relationships.

Ken Yanhs is the chief marketing officer at Zoovu, a product search and discovery platform powered by AI.