In retail marketing, predictive merchandising is all about putting the right products in front of the right customer at the right time. Predictive technology is giving customers information they need even faster, sometimes before they’ve even realized what they’re looking for. Aggregating and analyzing data from clicks, searches, length between visits and more, tells marketers when a user is just browsing, is ready to buy or if they’re looking for support. This evolving technology is transforming retail, marketing and how we operate internally at our jobs. 

Predictive Merchandising Starts With The Search Bar

Retailers are continuing to pour resources into online platforms to meet customers where they prefer to shop. The search bar is one of the most significant digital tools driving the digital experience. From day one, search has been about matching a user’s question to the data available and then ranking it according to how good of a fit it is. Search engines are highly optimized for digesting this type of information and ranking all of these different factors quickly at massive scale. The search functionality of your site is a great place to start if you’re struggling to pinpoint how to improve the end-user experience. Increasing metrics like relevancy, accuracy and speed can have a major impact on the customer experience and conversion rates.

Marketers are beginning to understand that search these days goes way beyond most users’ traditional understanding of keyword search. The advent of people-tracking technology is enabling businesses to learn where their customers are located, what they’ve shown an affinity for in the past, what other customers like them have done, what type of inventory is available and much more. Getting closer to the customer pays off. Amazon reported a third-quarter sales increase of 34% to $43.7 billion as a result of AI-powered product recommendations that activate valuable user data. Forrester Research predicted that these types of AI-related investments would grow by more than 300% in 2017 compared to 2016.

Breaking Down Silos To Get Closer To The Customer

One of the largest pain points underperforming retailers face is their siloed approach to sharing customer information, where each team only knows one part of the equation. All too often, IT owns the infrastructure but rarely knows the customer. This makes it difficult to apply what they know of the back end to create higher-quality customer experience or increase purchases. The marketing team knows the customer based on their aggregate analytics but usually doesn’t know what the back end is capable of or how to effectively implement the search engine. Data scientists often get stuck doing abstract exercises in machine learning, without the ability to deliver meaningful results to either IT or marketing.

For retailers, breaking down siloed communication requires a shift in how you understand the customer. Creating an omnichannel outlook will encourage a more holistic understanding of the customer and deliver a more seamless digital, online and in-store experience for those looking to buy. Sephora won “Store Concept of the Year” from RetailDive last year by nailing this type of omnichannel approach with Sephora Studio, having focused on connecting customers’ digital lives and in-store experiences.

ABT: Always Be A/B Testing