AI Adoption Among Brands: A 2024 State of Play

The Base Technology Layers have been Revamped and Primed for the Future

Most leading brands have transitioned to a digitized baseline that is more composable in nature and has a lot more plug and play ability across the board. According to Chris Zahner at Signet Jewelers – “Being able to swap out and put in a new order management system, being able to onboard a new CDP and connect it to paid media, Web, SMS, email and build these sophisticated marketing journeys has all become a lot easier.” This has enabled brands to launch AI pilots more efficiently. 

AI Governance is being Established and Guardrails are Being Put into Place

Many leading brands have established AI governance and collaboration boards composed of stakeholders and influencers from key parts of the organization. These groups are sharing early learnings and establishing guidelines to minimize risks, even as the technology evolves at breakneck speed.  

Customer Facing Functions Including the Creative Process Are Being Transformed by AI

While lots of AI work started in the back office, it is now moving to touch the customer. Brands are using AI to spot trends, write copy, create product and marketing imagery.

According to Slisha Kankariya of Adrianna Papell, “We are trying to use AI driven tools to supplement our quarterly campaign shoots with showing more contextual imagery on the site. This AI driven approach that we’re perfecting and deploying across email and social ads is really allowing us to capture the attention of audiences that are looking for something fresh every time they open up their phone. It’s also more effective to show things in context so it’s easy for people to envision where might I wear this outfit or why should I buy this? Or how does this fit into my lifestyle? With AI we’re trying to answer all of those questions to alleviate any questions or gaps that somebody might have about the clothing or the brand”

Brands are also using AI in customer experience through product recommendations, as well as customer service. AI is helping brands optimize pricing and promotions including with trigger-based promotions based on consumer behavior. 

Jason Seeba, CMO at Session AI (part of the Direct 60 selection committee) noted that “the smartest e-commerce companies are already making an impact with AI.  Especially the ones focused on the customer experience.  For them, it’s about knowing people in real-time based on their behavior, not just their history or demographics.  New AI is making it possible to create better experiences – driving growth and improving margins at the same time.”

AI is Making its Way into the Design Process

Generative AI is powering software to help brands to visualize assortment as early as possible in order to reduce the downstream impact. We have also seen brands testing AI-enabled design collaborations with consumers and influencers. In addition, AI-enabled trend spotting is starting to help brands create successful products and reduce waste and markdowns. 

There is Palpable Excitement about the Revenue Driving Potential of AI

Beyond efficiency, AI has the ability to offer brands new capabilities not possible before. Rachel Terrace of Marquee Brands mentioned – “We’ve been looking at AI as a potential revenue driver for brands where we have a huge library of content like Martha Stewart. We can leverage our content to teach an LLM. I’m sure there are many people out there who would love to have a Martha Stewart chatbot guide them through a recipe or help them figure out what to cook for dinner based on what’s in their fridge. So we are exploring those types of opportunities for a group of brands within our portfolio.”

Finally, Brands are Bracing Themselves For How Consumers Will Use Gen AI for Product Discovery

Jason also noted that – soon when we buy online, we’ll just ask our assistants to buy products for us. This changes how businesses operate. Today, people start on search engines. Tomorrow, they’ll ask their assistants. Future AI will know us and proactively recommend what to buy. It will pick out products we love faster than we can browse for them. Brands need to start thinking through and get ready for those use cases.