How to Maintain Retail Success Boom Going During an Economic Downturn
Advertisers and retailers got an early Christmas present this year in the form of record highs on both Black Friday and Cyber Monday: $9.12 billion in online sales on the day after Thanksgiving, another $11.3 billion on Cyber Monday, and an eye-popping total of $35.27 billion online for Cyber Week put together. In-store shopping also broke records in terms of turnout from shoppers looking to make the season bright.
The real challenge is maintaining spending as money becomes tighter as we enter an economic downturn. Consumers are willing to embrace multiple payments and shopping options, including buy now pay later (up 85% the week of Black Friday) and mobile shopping. In fact, US online spending increased by 3.5% during the holiday season, which is much higher than expected. Shoppers are out there – now advertisers just have to reach them through the blizzard of ads and prodigious use of ad blocking software.
Digital advertising is going through plenty of changes as an industry, including entering the cookieless era. That is why it needs a guiding star to provide relevant, timely, and attention-grabbing ads that make customers feel that the brand understands them at this time of the year and in this uncertain economic climate.
Enter the latest iteration of an AI-based solution: Deep Learning.
Role of Deep Learning in Retail Success
Deep Learning is a form of AI that bases its neural network structure on that of the human brain, enabling it to learn new pieces of information and use what it’s learned to create or shift its strategies. Ultimately, the use of Deep Learning provides three benefits to advertisers that will be of use as the economic downturn continues: customized optimization, newly-discoverable insights, and improved efficiency in personalization.
Even after the launch of a campaign, Deep Learning enables optimization due to its ability to synthesize insights based on high volumes of campaign and consumer behavioral data. With that data in hand, advertisers can more precisely understand a customer’s needs, then deliver just the right coupon code or special offer through just the right medium at just the right time to increase the ROI and the likelihood of conversion.
While we’ve been trained to think that we have every snippet of data we can use, Deep Learning has made it clear there’s more to learn and more insights to be discovered. Whether it’s tracking which pages on an online store are visited in what order, which products get added and removed, or even something as simple as how long a customer spends on a particular product page, Deep Learning can access this previously-hidden data as part of the broader data set it uses for personalization and optimization.
Better personalization is vital for the industry at large, now more than ever. The looming recession in the US and the potential for that same recession to go global through a number of factors, marketing and advertising budgets could be feeling the squeeze. Even if they avoid dreaded budget cuts, they’ll be facing demands for better ROI.
Personalization goes far beyond just dropping the right promotion at the right time, as previously discussed. It’s about analyzing all available data to have a better understanding of what product has the greatest potential to be purchased by which consumers and adjusting the campaign accordingly. This could mean changing what’s displayed on a banner ad every time it’s seen. It could be reordering what products appear, or even understanding how long you can expect attention from a consumer before they tune out, showing you what’s most important to quickly get across.
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Americans alone are planning to spend nearly the same amount this year as they did in 2021: about $1,450. Estimates of gift spending in the US rise as high as $178 billion. In short, there’s plenty of cash at play this holiday season, and advertisers who lean into technology like Deep Learning have the potential to reap the rewards.