How Retail Marketers Can Leverage AI to Win Holiday 2024

By Melissa Tatoris, VP Retail. As the 2024 holiday season approaches, retailers face increasingly complex consumer behaviors shaped by economic pressures, digital convenience, and shifting preferences. 

Artificial intelligence (AI) offers a powerful solution to these challenges by providing advanced insights into price sensitivity, shopping propensities, and channel and product preferences, while also enabling more accurate churn modeling and customer engagement.

By strategically using AI-driven tools, retailers can optimize key performance indicators (KPIs) such as customer retention, conversion rates, and overall sales performance. Let’s dive into several ways retailers can use AI for holiday marketing this year.

1. Price Sensitivity and Discount Preferences

AI’s ability to analyze consumer data in real time allows retailers to understand fluctuating price sensitivities and adjust strategies accordingly. Retailers can dynamically adjust their offers based on consumer behavior patterns to remain competitive, while also maximizing margins.

Zeta’s AI models can predict when and where consumers are most likely to respond to price cuts or promotions, enhancing the effectiveness of targeted discounts across various store types, including discount stores, local boutiques, and big-box retailers.

2. Shopping Propensities: Online, In-Store, or Both

Our AI-driven insights enable retailers to identify a customer’s propensity to shop online, in-store, or through a hybrid approach (e.g. buy-online-pickup-in-store). AI can analyze past behavior, geography, and convenience factors to target relevantly. 

Retailers that leverage this understanding can better allocate resources, optimize store layouts, and enhance ecommerce platforms to cater to the preferred shopping methods of their customer base.

3. Store Type Preferences: Discount vs. Local vs. Big Box

AI models can segment customers based on their shopping habits and preferences for store types—whether they favor discount outlets, local specialty stores, or large department and big-box stores. This enables retailers to craft highly personalized marketing strategies, offer store-specific promotions, and even target locations that are over inventoried in certain categories.

4. Churn Modeling and Forecasting Responses

AI churn models predict which customers are likely to disengage and stop shopping with the retailer, before they stop. By analyzing behavioral patterns and purchase histories, retailers can identify high-risk customers and intervene with personalized retention offers, improving loyalty and reducing churn rates.

Forecasting AI tools also enable retailers to anticipate customer responses to various marketing strategies, such as email campaigns, SMS offers, or in-app notifications, allowing for more refined, data-driven outreach that enhances engagement.

5. Product Recommendations

AI-powered product recommendation engines are key to driving conversions, particularly during high-stakes holiday shopping. Using real-time customer data, AI can predict the best product suggestions for each customer, maximizing cross-sell and upsell opportunities.

AI can also refine its recommendations based on browsing patterns, purchase histories, and seasonal trends, ensuring that the right products are presented at the right time. This not only increases cart sizes, but customer satisfaction and engagement as well.

6. Forecasting Segments

High-powered AI tools enable marketers to know which segments will perform best before they hit send on campaigns. Many marketers are leaving ‘money’ on the table by excluding certain segments that will perform and add revenue to campaigns. AI can quickly identify individual segments that will add to positive performance.

7. AI Agents and Support

Zeta has ZOE, an AI-powered virtual planning assistant, to help offer personalized assistance to marketers when fast facts, results, or recommendations are needed. Using the chat-based interface, marketers can ask for assistance with strategy, copy, analytics, segments, and more.

AI agents allow marketers to decipher results and receive answers to very complex problems. For example, by understanding which brands have taken up the real estate of marketing tactics like email, direct mail, and programmatic ads over each quarter, marketers have the ability to get more co-op funding for the over-advertised brands. Another idea is to see what categories have owned the creative in all marketing so merchants and marketing can have a better idea of what has been featured and the impact each category has had on sales. 

The key to successfully implementing AI capabilities into your marketing processes lies in your tech stack. Instead of adding disparate AI tools, with their own use cases, find AI-powered marketing platforms, like Zeta, with AI at the core. Learn more about Zeta’s AI capabilities or see our Agents in action.