Holiday shopping and AI, oh my!

Commerce is at the top of many minds, considering we just made it through the Holiday season gauntlet of premium online shopping days – Prime Day, Thanksgiving, Black Friday, Small Shopping Saturday, and Cyber Monday. According to the National Retail Federation, a record 200.4 million consumers shopped over the five-day holiday weekend – surpassing last year’s record of 196.7 million.1  

With that many people shopping online, there are bound to be frustrations. According to FullStory, online shopper frustration increased by nearly 25% on Cyber Monday.2

If we look at the entire set of 5 days, frustration has risen over 16% from the previous year. Those frustrations could be from slow page loading, broken links or buttons, intrusive modals, slow cart or checkout process, discount incentives and lack of personalization. 

So, how do we manage those frustrations? One opportunity is to reduce friction for consumers as they shop and buy with the use of AI.

Think of the customer who is coming to your site for the first time to buy that purse they saw their friend showing off. Being able to recognize them as a first-time customer and provide targeted content through recommended products along with that purse can lead to increased sales. 

Look closer at that repeat customer who loyally buys from the same vendor. Being able to provide them a personalized experience that is unique to them via specific discounts based on their browsing behavior – maybe free shipping, maybe BOGO, or even a discount on a specific product they’ve been known to buy previously – shows that the vendor knows the customer is key to building a strong and loyal customer relationship.  

Some may look at those examples and view it as pushing consumers to buy more than they need; but more importantly, it’s improving their buying experience. Being able to offer a higher level of convenience and personalization is crucial to online shopping success in the future.  

Insider Intelligence predicts that personalized customer service, marketing promotions, and commerce experiences powered by AI will drive $194 billion of spending.3

As we look at improving personalized experiences, promotions are another great opportunity to drive engagement. According to NRF1, consumers reported that on average, 55% of their Thanksgiving weekend purchases were specifically driven by sales and promotions, up from 52% in 2022. Another 31% said a limited-time sale or promotion convinced them to make a purchase they were hesitant about, up from 29% last year. 

You can use AI to instantly generate and target promotions to your audience based on product interest. This is valuable to marketers as well as customers – a win-win for all. Marketers can gain better insights into customer behaviors and interests, and customers are more satisfied as they receive a personalized experience that simplifies their purchase experience.  

The future is bright for customers who are looking to experience personalized shopping that’s catered to them. Let’s leverage AI to help get organizations there – it’s what customers are craving.  

At Optimizely, and specifically from a commerce perspective, we are focused on purpose-built AI where we can show proven impact. We identified three areas that can provide ROI-driven AI enhancements that are measurable. Our focus is looking at a particular commerce problem and knowing customers can get value out of it. This includes: 

Keep an eye on our public- facing commerce roadmap as we continue to build AI into our commerce products! 

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1 Thanksgiving Holiday Weekend Sees Record Number of Shoppers (National Retail Federation, November 28, 2023)

2 Shopper frustration increased by 25% this Cyber Monday over last year (FullStory, November 30, 2023)

3 Discounts, generative AI, and social media advertising will power holiday shopping this year (Insider Intelligence, August 29, 2023)