How data and genAI are helping retailers increase conversions in a tough economy | MarTech

Retailers face increasing competition at a time when high inflation and higher prices are limiting consumers’ spending potential. This year, brands will have to work harder than ever to cut through the noise and drive purchase intent, and data marketing can and should play a central role in retailers’ and brands’ e-commerce strategies.

From personalization to product feed, effective data management and use supports a leak-free customer journey, driving more consumers to the bottom of the funnel and subsequently increasing sales and revenue.

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The volume of traffic referred to retail websites by GenAI (Genative AI) tools is increasing rapidly, with US and UK sites experiencing an increase in 4700% And 1200% the past year. While traditional search engines such as Google and Bing still dominate the market, this rapid growth means that retailers must also consider GEO (Generative Engine Optimization) in addition to SEO.

Retailers and brands with a significant online presence often spend the majority of their media budget on Search Shopping campaigns, which use product feed data to determine what information is displayed. Consistency and reliability are critical, but with much of the search data being pulled from retailers’ websites, which are rarely optimized for this use, inaccuracies are starting to creep in.

Advancing AI product discovery

Improving the titles and descriptions of product feeds usually yields the greatest success in terms of performance. However, manually updating this data would be very time consuming. It is possible to overcome this challenge by using GenAI to drive automated operations, resulting in a measurable impact on the bottom line.

Working with Salomon, a major sporting goods brand, fifty-five designed and integrated a Gen AI prompt that adapts these key features to specific formats according to best practices. In a proof of concept study, fifty-five A/B tests were implemented with FeedX to measure various KPIs including click-through rate (VTR), conversions and revenue for almost 700 products in the UK market.

The results confirmed the impact of the prompt on performance, with the GenAI-powered catalog generating a 43% increase in CTR. The traffic turned out to be approximately twice as qualified as that of the unoptimized control group, resulting in an 81% increase in conversions.

These conversions led to a 34% increase in spend and an 83% increase in revenue, while more than doubling return on ad spend, allowing Salomon to achieve better results with less investment.

Switch to a data-driven conversion strategy

As consumers become more cautious about their spending, product-driven companies can no longer rely on the power of their brand to drive sales. Improving the customer experience across devices helps increase engagement and conversion, but for lasting results, brands must implement a continuous conversion optimization (CRO) strategy.

By defining a roadmap of test scenarios every quarter based on precise objectives, opportunity analysis and hypotheses, and prioritizing based on complexity and business value, brands can take a structured approach to iterative improvements.

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Developing and setting up scenarios and running two tests per month continuously enriches the internal roadmap and guides the best routes for project implementation. In the case of Hugo Boss, for which fifty-five created a ‘CRO Factory’, 60 tests and custom scenarios resulted in an 11% increase in conversions on the desktop website, and a 22% increase in conversions on the mobile website.

In today’s economy, brands cannot afford leaky customer journeys. Closing gaps in the customer pipeline keeps them within the funnel, increasing the likelihood of click-throughs, conversions, and revenue. While data can be used to identify delivery points, brands can also use data-driven personalization to drive consumers to make a purchase.

Breaking through the competition

Abandoned shopping carts are one of the best opportunities for retailers to increase conversion rates. Optimizing communications that encourage prospects to pick up where they left off ensures more customers complete purchases, with timing and content critical to both click-through and conversion.

For a UK-based electronics retailer, 55 companies conducted multiple tests over five years, implementing a more robust email volume alert system and identifying the impact of different communication channels, timing and personalization on sales. Emails and text messages proved to be the most effective, with the resulting communication process allowing the company to increase abandoned cart revenue by 72%.

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Despite increasing competition, a systematic approach with robust data-driven insights and applications can help retailers and brands differentiate themselves online and move consumers through the marketing funnel.

When deployed for the right use cases with efficiency, planning and expertise, automation and GenAI are critical success factors throughout the customer journey, improving the customer journey and helping retailers become more cost-effective and profitable.