How AI Becomes a Christmas Elf Helping Retail Giants During the Holiday Season

Artificial intelligence (AI) is quietly making its mark in the bustling world of holiday retail, influencing an estimated $194 billion in global online spending during the November and December holiday season, according to SalesforceCRM's tracking of shopping trends.

AI Boosts Cyber Week

According to Forbes, AI has become a popular and transformative force across diverse industries since late 2022. Retail giants, in particular, have been using AI to streamline their operations.

During Cyber Week, a crucial shopping period encompassing Thanksgiving through Cyber Monday, Salesforce's data reveals that AI left its imprint on a staggering $5.1 billion in online sales.

Rob Garf, vice president and general manager of retail and consumer goods at Salesforce, emphasized that we are merely scratching the surface of AI's potential impact, saying retailers are still testing and learning with this technology.

Numerous retail giants, including Walmart, Target, and Nordstrom, have already embraced AI, incorporating it into their operations. From optimizing inventory management to enhancing marketing strategies, AI plays a pivotal role behind the scenes, contributing to a more efficient and streamlined consumer shopping experience.

How Retailers Are Using AI

Amazon, a pioneer in AI integration, introduced time-saving features for sellers and advertisers. Instead of laboriously crafting product descriptions, sellers can now input a few words and let generative AI do the heavy lifting. Advertisers can also leverage AI to create visually compelling images to accompany their products.

In the spirit of the holiday season, Kohl's unveiled an AI-powered tool named "Storybook Magic." This innovative feature crafts personalized poems for customers and offers thoughtful gift suggestions, providing a touch of magic to the shopping experience.

On the other hand, Target utilizes AI to forecast demand at different stores and predict potential out-of-stock items. By preemptively replenishing shelves, the retail giant aims to eliminate the risk of lost sales due to unavailability.

Nordstrom is also concentrating on understanding how AI can expedite order fulfillment while gaining insights into the nuances of customer language. The retailer is delving into understanding customer requests, ensuring an accurate search that will lead users to buy their desired item.

In essence, the impact of AI on Christmas sales is subtle but pervasive, weaving itself into the fabric of the holiday shopping experience. From predicting consumer demand to enhancing product discoverability, AI is becoming a silent ally for retailers, contributing to a more efficient and customer-centric holiday shopping season.