Maximizing Holiday Sales With the Power of AI-Driven Personalization

During this 2024 holiday season, retailers are navigating a rapidly evolving landscape of consumer behavior, technology, and economic uncertainty. To stay ahead, brands must adopt innovative approaches to reach and engage their audiences, especially as holiday promotions begin earlier each year. In fact, analysts predict moderate sales growth of 2.5 percent to 3.5 percent, with e-commerce continuing to surge by 7 percent to 9 percent year-over-year.

One strategy proving to be a game-changer for retailers is artificial intelligence-driven personalization, which allows businesses to use customer data and create tailored experiences at scale. This approach helps brands break through the holiday clutter with relevant offers and experiences that resonate with individual consumers. Personalization has also been shown to reduce customer acquisition costs by as much as 50 percent, according to McKinsey, making it a powerful tool for driving sales growth.

Below are four ways retailers can use AI to maximize sales during this critical season.

1. Real-Time, Unified Customer Profiles

The first step in personalizing holiday marketing is ensuring that data is accurate and usable. Building first-party data customer profiles allows retailers to leverage their own data sources — e.g., website interactions, purchase history, and loyalty programs — to create more relevant experiences that encourage customers to take action.

To maximize these strategies, retailers need a lakehouse-architected customer data cloud to activate customer data in real time, addressing challenges like time lags and limited reach in digital marketing. By continuously updating identity graphs with machine learning, these platforms create live, comprehensive customer profiles that provide accurate insights into preferences and behaviors, allowing retailers to identify shifts in consumer habits quickly. This automation enables retailers to engage customers with timely, relevant offers, enhancing the effectiveness of their holiday marketing efforts.

2. Personalization at Scale

Gone are the days of one-size-fits-all marketing. Today, AI can analyze massive amounts of customer data to identify preferences, shopping habits and behaviors quickly and efficiently. What’s more, lakehouse technology can do it in real time, allowing marketers to stay on top of shifts in consumer behavior and quickly adjust their strategies as needed. By leveraging these insights, retailers can offer targeted promotions across various channels, which is increasingly important as consumers start their holiday shopping earlier and across more platforms.

3. Maximizing E-Commerce Growth

As e-commerce continues to grow at a rapid pace, retailers need to ensure their online shopping experience is personalized and seamless. Real-time, AI-powered insights help retailers optimize product recommendations, improve navigation, and create a more enjoyable shopping journey for customers, whether that's online or in-store. This continuous stream of updated data allows businesses to stay responsive to shifting customer preferences and behaviors. By offering a tailored online experience, retailers can capitalize on the projected 7 percent to 9 percent growth in e-commerce sales this holiday season.

4. Building Brand Loyalty Beyond Discounts

In an era when discounts are no longer the sole driver of holiday purchases, retailers must build meaningful customer relationships. AI-powered personalization helps retailers offer more than just discounts by providing exclusive recommendations, early sale access, and loyalty rewards based on individual shopping behaviors. This creates long-term engagement and strengthens brand loyalty, helping retailers stand out in a competitive market.

This holiday season is the perfect time for retailers to assess their data strategy and test use cases such as audience onboarding or personalization. With composable solutions, they can start small and capture valuable holiday traffic insights even before the full system is implemented.

In essence, the holiday season offers a unique situation that can reveal a retailer’s data strategy's strengths and weaknesses while providing rich insights to fuel future innovation.

Matthew Powell is director of pre-sales solution consulting at Amperity, where he leads a team of technologists in developing customized marketing presentations and data-driven solutions for enterprise consumer brands.