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Many holiday shoppers are winging it: Nearly half of holiday purchases in 2018 were either completely or partially unplanned, according to Deloitte, and 20% of those shoppers are open to being influenced by retailers, both in-store and online.

With the entire retail industry at a crossroads—with store closures, CMO reshuffles, and competition from Amazon—retailers have a lucrative opportunity to differentiate themselves and win over undecided shoppers through marketing. Unfortunately, this is not an easy task.

In fact, one of the biggest challenges facing nearly half of retailers for the 2019 holiday season is figuring out to reach their target audience.

The solution? Artificial intelligence (AI).

Even though some retailers are cautious about investing in emerging technologies, they do believe in the power of AI: Nearly 50% of marketers will have adopted AI or machine-learning in 2019 alone. Which means that the data analysis, audience insights, and creative enhancements discovered by AI will be one of the largest trends this holiday season.

So let's take a look at why leveraging this technology will help you deliver a winning marketing strategy this holiday season.

AI manages marketing costs

One of the biggest obstacles for retailers this year is managing increasing advertising costs, with 59% of retailers saying that is their top challenge of the year. But with AI, advertisers can discover the biggest way to save costs on digital campaigns while driving the biggest results.

Here's how it works: AI analyzes billions of consumer data points every day to find what ad elements drive consumer behavior and determine how marketers can more effectively interact with their target audiences. It also combs through an organization's past and current campaigns to discover the biggest ways to save costs while still increasing results.

With the data, AI takes the guesswork out of ad placement by alerting users on how to update ad placement, audience analysis, and creative concepts, so they can decrease spend and maximize results. It also saves hundreds of hours of data analysis and condenses it into short, actionable insights on how to best reach customers.

Consider RumbleOn. This online vehicle retailer was able to reduce cost-per-ad (CPA) by 70% while receiving hundreds of incremental conversions thanks to leveraging in-flight optimizations for creative, budget, audience targeting, and ad placement with AI.

AI builds excitement

With AI, marketers have a better idea of what type of content will drive the highest return. By analyzing data points, AI can tell you what ad elements drive the consumer behavior your campaigns need: image tags, video content, emojis, headline character count, and much more.

Let's say you're putting together a social media advertisement to promote a new holiday sale. AI can tell you whether opals or diamonds will perform better. Or, if you want to feature a photo of people under the mistletoe, AI can determine whether the people should be smiling or kissing.

By aligning the right creative elements for your products, as a retailer or marketer you can grab the attention of potential shoppers and drive the highest conversions while still differentiating yourself from the competition.

AI saves time

All marketing strategies require a mix of print, digital, inbound, and grassroots marketing. But deploying so many aspects of marketing can take time, pulling you away from other creative marketing endeavors. With AI, you have the power to launch entire creative and data-driven ad campaigns in minutes that can produce an average ROI of 21% in as little as 15 days.

AI helps acquire new customers

Although an abundance of evidence shows that returning customers drive the most revenue, there has been a growing concern for retailers about acquiring new customers, both in-store and online.

That prioritization stems in part from fears about the so-called "retail apocalypse," but also from the challenges of connecting with a newer, younger base of customers who have different expectations than their predecessors. But with AI, marketers are able to understand which aspect of the ad will drive the highest return and convert new shoppers.

Bump Boxes is a subscription box company for new and expecting mothers. By leveraging AI in Facebook and Instagram campaigns, it was able to drive an increase of nearly 50% in new purchases in just 60 days while cutting ad costs in half. It was able to do that by using AI to understand what type of verbiage best resonates with potential customers, allowing the company to optimize creative faster than ever before.

AI helps with campaign fatigue

AI also addresses a major challenge for marketers: creative fatigue. Marketers often make the mistake of not reacting fast enough if a campaign goes on too long, or if certain aspects of the visual or text creative are overused. When not addressed, creative fatigue can cause CPA for a campaign to rise over time.

AI can suggest new campaigns daily and ensure ads aren't running too long. Furthermore, AI can help marketers run different types of ads to various types of audiences at the same time to create a more sophisticated approach to marketing.

AI answers questions you don't know to ask

When AI measures hundreds of thousands of data points daily to intuit human behavior, you may see some curious results. AI has insights into past behaviors and content, and it can see in real-time how those behaviors are shifting. What may take days or weeks for a human to see, AI sees a new trend immediately and can prompt marketers to take advantage.

An example: A men's clothing retailer's target customer is men age 25-40, but AI might tell you to market to women age 24-65. Although that may sound ineffective, you must trust the data. (After all, many women buy men gifts during the holidays!)

AI can see elements within ads that are guaranteed to drive conversions. Let AI be your guide into launching timely marketing efforts, and you'll see the conversions unfold.

The time for AI is now

Every retailer is gearing up for the holiday season, and adopting new tech is the solution many are replying on. Fully 59% of online retailers say they will introduce new technologies to present products to customers during the 2019 holiday season. But, out of the technology available, AI will be the best tool to drive the largest results.

From managing marketing costs, building excitement and driving conversations, AI will allow your brand to not only survive the holiday season but also thrive.

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ABOUT THE AUTHOR
image of R.J. Talyor

R.J. Talyor is founder and CEO of Pattern89, an artificial intelligence-based software company that optimizes paid social media advertising campaigns.

LinkedIn: R.J. Talyor

Twitter: @rjtalyor