What roles will AI play this Black Friday?

The holiday shopping season will soon be upon us— here's how retailers could deploy AI to stay ahead.
8 October 2019

Silly season will soon be upon us. Source: Shutterstock

Christmas is less than three months away, and retailers both online and ‘on land’ are anticipating a peak sales period as hungry shoppers get ready to snag the best deals of the year. 

The term Black Friday is thought to refer to the day after Thanksgiving dreaded by policemen and bus drivers of Philadelphia due to massive congestion accompanying the start of the Christmas shopping season

The reference caught on nationwide, and soon retailers set out to market it to generate profit after a year of loss.

Now, Black Friday is a weekend-long retail holiday ‘celebrated’ annually en masse. In 2018, Adobe Analytics revealed Black Friday achieved US$6.22 billion in online sales alone while Cyber Monday pulled in a record of US$7.9 billion from e-commerce. 

In anticipation of the holiday, retailers will be looking to exploit cutting-edge digital solutions to stand out amid the frenzy and to ensure they’re well equipped to maximize profits from the annual spike in demand. 

Here, TechHQ focuses on the varying roles that AI and machine learning technologies, in particular, will play during the busy holiday shopping period. 

Chatbot support

A UX-friendly website that can cope with demand and targeted email newsletters are staples for retailers today, while cart abandonment emails and notifications remain effective ways to trigger customers to complete purchases.

But several sources reveal an increase of 20 percent in conversion rate when live chats are available. Customers are reassured of the quality and specifics of products by asking in chat boxes, which are increasingly being controlled with AI. 

A study by Gartner states by 2021, AI will manage 15 percent of all customer service interactions on a global scale. 

Hence, retailers are looking into machine learning to craft personalized messages, improve the overall shopping experience and earn brownie points. Those with the right tools could see uncertain customers tipped over the line. 

Predictive analytics

Last week, UK retailer Sainsbury’s announced it was using Google Cloud to develop a data insights platform, using its vast amounts of customer data and machine learning to identify on-going and changing trends, and ultimately maximize and optimize its sales and supply chain. 

This, however, is nothing new in the retail world, which now relies on data insights as a means of efficiently managing pricing, inventory, and distribution, to ensure stock is flying off the shelves. 

At periods of high demand, machine learning and AI tools will help anticipate trends guide sales strategies based on huge volumes of data, enabling retailers to more effectively capitalize on a swell in demand. 

AI in advertising

Last year, IBM Watson composed an entire script of a one-minute advertisement for Japan’s luxury automotive brand Lexus. This year, Best Western turns to the power of AI to create personalized and interactive advertisements in a competitive online travel market.  

Clearly, AI is becoming vital in the creative industry and has proven capable of creating effective marketing content. In the run-up to Black Friday, AI could either be programmed to use historical data to target a wide pool of consumers or a specific demographic. It could leverage the latest shopping trends, consumer behavior and information from third-party sources (location, age group, lifestyle) and use it to create uniquely persuasive ads.

During a period in which consumers are bombarded with offers, advertisements, and promotions, tools that intelligently optimize creative could put brands a foot forward. 

Getting to know the needs of shoppers is a good start but knowing when and how to advertise a ‘wanted’ product makes it powerful.

AI in supply chain

More than ever, efficiency is the driving force for retailers to manage inventory and monitor orders during Black Friday. Retailers can expect to see a spike in demand and if unprepared, logistics will come under strain and consumers will be left disappointed, and put off from future purchases.  

Experts in the supply chain recommend close collaboration between production, marketing, and logistics departments to meet escalated consumer needs during Black Friday.

This is where AI comes in to help retailers devise well-planned operations and logistics for Black Friday. Retail veterans like Amazon and Alibaba strategically distribute stock to various centers based on demands and predictive purchase patterns. Effectively, saving on the transportation costs and ensuring smooth logistics during one of the most hectic yet profitable days of the calendar. 

Automated Grinch bots

Retailers running sales on virtual stores are vulnerable to cybercrime committed by ‘Grinch bots’ during Black Friday, where vast amounts of transactions are made. Grinch bots take advantage of the seasonal sales by harvesting details of customer accounts and stealing loyalty points and gift card values. 

Besides that, limited edition and popular products are often bought in abundance, only to be sold at higher prices on secondary markets.

On Black Friday 2018, a bill titled Stopping Grinch Bots Act was passed, aiming to make illegal the use of bots to make purchases online and resell of products bought.

Black Friday is no longer a day to be dreaded, instead, it is very much a part of the American culture.