Online AI-Powered Algorithms Reinvent Personalized Shopping
Over the last decade, e-commerce has undoubtedly made shopping more convenient—and with help of data technology, it’s about to get more personalized.
Clothing subscription platforms that rely on data to provide personalized shopping recommendations are on the forefront of streamlining an already simple process. These companies use artificial intelligence to curate products to users’ specific tastes and ship them to customers at regular intervals with the goal of ironing out some blemishes that still exist for ecommerce.
The first? Option overload. The glut of options online often leave consumers feeling overwhelmed by choice. And once the choice is made, there’s contending with making the wrong one. The wrong size, color or style results in an often-arduous returns process: the second wrinkle e-commerce must grapple with. Returns, according to some reports, produce over five billion pounds of waste annually in the U.S. alone.1
With the help of data-backed AI-powered algorithms, subscription services allow consumers to skip the endless scrolling, while the companies avoid waste and cut costs by learning precisely what each of their customers want.
Bombfell’s Sandro Roco on the Promise of Data in Retail
Bombfell is a subscription e-commerce company and, according to director of strategic initiatives Sandro Roco, data is key to Bombfell’s business. Its customers fill out a questionnaire to assess preferences early on, but shortly after a user signs up, Bombfell’s AI-powered algorithm cross-references customers’ profiles with their actual purchasing behavior to curate personalized boxes that cut down on choice overload and wasteful returns.
Q+A with Bombfell’s Sandro Roco
How are consumer shopping habits changing—and how does data help subscription-based models like Bombfell keep up?
Roco: Convenience is increasingly important to shoppers, and the curated box aims to address that. But we also realize that there are other challenges. For example, people don’t always just shop in 30, 60 or 90 day intervals that the boxes follow. Needs can arise suddenly, and when consumers do want to purchase an item, there’s just too much choice out there.
So, we’ve come up with a model that uses data to create a personalized shopping experience called “Shop Favorites.” It’s similar to a traditional e-commerce experience, except that it’s a curated shop. This isn’t an infinite scroll through a product catalog. Instead, we’re saying ‘based on what we’re seeing in our inventory, here are several items that we think work best for you.’
We’re focused on making each recommendation high quality based on the data we have, rather than offering endless options. This way, we’re adding flexibility to the subscription model, while maintaining that data-driven approach.
Are there ways that data is changing retail beyond consumer experience?
Roco: Data has become a force for good in many ways in the apparel space. When you consider environmental impact, for example, retail is a very wasteful business. The entire supply chain requires a lot of water, textiles, and other resources. There’s also a lot of breakage and unproductive inventory that ends up getting discarded across the whole vertical, not to mention the volume of returns that continues to grow. But because we’re getting a really good sense of who our customer is through the purchases they make as well as the feedback they leave on items they choose not to keep, our customers are less likely to return items, which means we’re reducing waste.
What about the retail companies you work with? Is the availability of data reshaping the way they work?
Roco: Yes. We’re able to provide actual feedback to the brands we work with about their products. We can say, ‘This style worked really well’ or ‘You cut this style in a small, but we’re seeing that return rates are much higher than normal.’ That specific feedback on fit just didn’t exist before these highly-curated shopping models, where the next box’s contents depends on feedback from the previous box.
Data is definitely having a positive impact on product development, because we’re helping the industry get in sync with customers.
How do you envision data continuing to transform retail?
Roco: We’re excited about how data is helping us better understand consumers and change the market for the better. But we’re careful about not overblowing its impact at the moment, and are focused on making the most of what’s available to us now. The key is that it’s not just a matter of having great data. It’s critical to have the mechanism to properly analyze it and continue to get actionable insights from it.
Hyper-personalization like Bombfell—using AI to cull data from your active behavior (what you return, your feedback on certain styles) and passive behaviors (the pants you scroll over and don’t think twice about)—is poised to not only help ease some of the burdens e-commerce still faces, but also start to make online shopping start looking more like personalized shopping.
This content is produced by WIRED Brand Lab in collaboration with Western Digital Corporation.