How Bloomingdale’s is Using AI to Bring Humanity to Shopping

At a session during the eTail West show on Tuesday, James Kim, vice president of digital and technology at Bloomingdale's, shared how the retailer is incorporating artificial intelligence into its business to bring more humanity to a very human activity: shopping. Kim outlined Bloomingdale's innovative approach to integrating AI to enhance customer experiences and drive engagement.

For years now, boosted by the COVID-19 pandemic and consumers shopping more at home, retailers have been increasing their investment in the digital experience. Bloomingdale's began using Lily AI in a four-month test of dresses in October 2019, according to the The New York Times. There was a 3.5 percent increase in conversion rate, and the next year Bloomingdale's expanded the use of Lily AI across all apparel categories. By 2021, Lily AI told The New York Times that Bloomingdale's had generated about $20 million of additional online revenue, and by 2022, the company added Lily AI to all of its merchandise.

Bloomingdale's is thinking about customers from an intent-based perspective, Kim said. The company is aware, for instance, that a shopper browsing leisurely for a dress is different than one who is landing on a product detail page from Google because they want that specific product. Bloomingdale's is providing experiences for both, ensuring relevance for each customer interaction no matter the level of purchase intent.

Kim shared how Bloomingdale's is using AI for product discovery and engagement, implementing strategies to encourage customers to explore more products and discovery new brands, ultimately aiming to increase customer lifetime value and conversion rates. The key, Kim said, is to tap into what's highly relevant to customers in the moment — like the Barbie movie over the summer, for example — and leverage AI to provide relevant search results.

Kim acknowledged the challenges of gaining buy-in within a large bureaucratic organization like Bloomingdale's for new technology investments. He emphasized the importance of simplifying complex concepts surrounding AI to ensure widespread understanding and acceptance, including easily understood use cases. Kim advocated for articulating AI's potential benefits in human terms, using relatable use cases and emphasizing efficiency improvements.