Harnessing the Power of AI for Retail Merchandising

A retailer’s ability to create a seamless and relevant experience for their customers ultimately can be the difference between gaining loyalty or falling behind competitors. Today’s customers are looking for faster connections to the items they’re looking for and want personalization at every step along the way. This is why the pressure to nail online retail merchandising — the strategic placement of products on a retail website — has never been higher.

Art Meets Science

Within a website it's hard to create the type of eye-popping experiences for customers that can be achieved in a physical location. Online you don’t have the luxury of physical elements that boost merchandising efforts. Elements like attractive signage, community presence and well-made product displays can capture a shopper’s attention quickly, and all they have to do is step right in.

In the online retail world, businesses cannot just rely on flashy site design and the location of the products on the website. Consumers spend less time online than ever before, so the onus is on retailers to provide them with an experience that captures their attention long enough to successfully complete a purchase. The underlying data behind these behaviors is essential to providing an experience that keeps shoppers coming back for more. This is why effective online merchandising is both a science and an art. A data-driven approach is the science and product placement strategy is the art.

However, online merchandising requires a deep understanding of your potential customers’ shopping needs and behavior, fueled by data. This is where artificial intelligence can help.

Tapping Into Intelligence

Breakthroughs in AI technology, such as low- and no-code solutions, are enabling retail professionals to automate repetitive merchandising tasks, pinpoint exactly where to optimize the experience for the end customer, and visualize data so that informed actions can be taken.

Advanced merchandising tools using AI can track how shoppers are reacting to different merchandising strategies in real time. These analytics are invaluable for retailers looking to deliver engaging online experiences, boost customer loyalty, and drive higher conversion rates. Additionally, the reports generated from AI-backed analytics can offer a reimagined view of business-critical metrics as well as insights into how certain campaigns are performing.

AI Driving 'Searchandising'

As mentioned, online merchandising needs to be driven by data. Data can make the most powerful impact for a search bar. Forty-three percent of visitors to e-commerce websites go straight to the search bar. The individuals who do this are likely to be a retailer’s best customer since they're clearly coming to the site with a purpose. Within the world of online merchandising, “searchandising” that utilizes AI presents a massive opportunity.

AI can be used to curate search results in ways that drive sales, conversions and key performance indicators for e-commerce stores. Controlling the ranking (order) of results puts you in the best possible position to offer your customers exactly what you want them to see first — and ultimately to buy. AI can be used to boost trending items in rankings, personalize recommendations based on user behavior, and more.

Given how fast customer needs change, businesses cannot afford to be stuck with a solution that’s unable to scale with technological innovation. Many of the advanced merchandising tools using AI are doing so through low- and no-code formats, enabling anyone to harness its power. To drive loyalty in a way that resonates with consumers, retailers must tap into the data-driven nature of e-commerce and deploy intelligent technologies in order to understand how today’s buyer can be a customer for life.

Reshma Iyer is the head of product marketing, e-commerce at Algolia, a site search and discovery platform powered by artificial intelligence.