mmense and growing. The rise of Amazon, Netflix and Spotify, with their highly personalised recommendation engines, is a testament to the success of the strategy. According to Think with Google, 90 per cent of marketers say personalisation significantly drives business profitability. In Australia, almost two-thirds (62 per cent) of shoppers want more personalised discounting from retailers says The Ayden Australia Retail Report 2023. Forty-three per cent want retailers to remember their preferences and purchase history for more customised browsing. In addition, the Cheetah Digital 2022 Digital Consumer Trends Index highlights that there has also been a huge increase in Australian consumers who feel frustrated with a brand’s lack of personalisation initiatives for their unique desires and needs. Chatbots expanding customer service Hyper personalisation has become a game changer in retail. Advances in technology make it possible to deliver personalisation at huge scale. For example, research by Digiteum suggests that chatbots can raise shopping cart conversion by up to 30 per cent, by activating reminders, suggesting “best offer” notifications and discount codes, and cross-selling and upselling. This is the kind of approach that a skilled retail assistant might use in a physical store with a single customer at a time. In a virtual environment, artificial intelligence (AI) can handle thousands of customers simultaneously. Big data driving personalisation Retailers are collecting vast amounts of data to better understand customers’ personal, transactional, and behavioural information. AI algorithms can then carry out behaviour analysis, predict customer preferences and tailor personalised offers, which improves customer engagement and loyalty. The personalisation provided by customer-level data enables much more intelligent recommendations, reducing risk of costly returns due to incorrect orders. Online clothing retailer The Iconic uses AI to predict return rates with 80 per cent accuracy, helping optimise stock levels. It has also been using an augmented reality (AR) tool for sneakers and a “Snap To Shop” search function where customers can upload an image to shop similar products. The Iconic is also experimenting with the Metaverse as a way to blend physical and virtual experiences, using avatars in its Runway X show. GenAI and virtual retail Generative AI (GenAI) such as ChatGPT is also driving new and exciting possibilities. It can create content from text (such as product descriptions) to images, video and audio. Google has been testing a technique called diffusion for a new AI shopping feature, where people can see what clothes look on a wide range of body types and sizes. Levi Strauss also plans to supplement human models with AI-generated models to show a wider range of clothing sizes. Cosmetics retailer Sephora offers a Virtual Artist feature for customers to try on different makeup products. It includes tutorials customised to a user’s own face, mapping out exactly where to place a product for contouring, and enables them to colour match makeup to their outfit. Stitch Fix’s AI Stylist uses AI to analyse customer feedback, size, style preferences, and purchase history. It then suggests outfits and clothing pieces tailored to each individual’s taste. Personalised shopping is no longer a nice-to-have or an experimental feature: it’s an expectation and a requirement for any successful retail strategy. Embracing hyper-personalisation enhances customer engagement, loyalty and overall shopping experience. It also cuts costs and time, enabling retailers to do much more with less. In a market where many retailers offer similar products, it can be a key differentiator and competitive advantage.