In today’s retail world, personalization is a key element of the shopping experience. Customers are confronted with an endless array of opportunities to make a purchase – whether they’re strolling through the mall, scrolling through ecommerce ads on social media, or looking at merchandise on their favorite store’s website. To differentiate themselves from the competition, retailers need to be thinking about how to personalize the shopping process and tailor it to specific consumers’ shopping patterns.

That’s where Predictive Merchandising comes into play. Predictive merchandising basically makes use of data science techniques to help retailers more accurately ascertain what products a consumer is most likely to buy. It utilizes what are known as online tracking tags. These tags basically record crucial information at each point in the shopping process. They show, for example, what items a consumer has looked at, what items they put in their shopping cart and ultimately abandoned, and what items they purchased.

If you have ever seen an ad on Facebook or gotten an email about a product you put in your online shopping cart but ended up not purchasing, that is a prime example of predictive merchandising in action. Predictive merchandising ultimately results in better recommendations to customers. The technology can help retailers figure out which products are best for the first sale, cross-selling, and upselling to a particular consumer or segment of consumers.

Given the importance of visual content in driving purchases, the nexus of predictive merchandising and Visual Intelligence is becoming increasingly important.

“The current and most significant catalyst for inspiration and purchase – social media – creates new opportunities for retailers by leveraging images to understand individual interests and build stronger engagement,” AI and commerce expert Oliver Tan explained in Inc. “AI-powered visual intelligence opens doors by making it possible for retailers to gain the necessary insight from an image and provide consumers the ability to purchase directly from those images with features like ‘Shop Now.’”

Therefore, image-based data analysis is now a critical part of the equation when it comes to leveraging the power of predictive merchandising.

The bottom line? AI technology is shaking up the world of retail, and visual intelligence and predictive merchandising are only going to get more important from here.

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