As competition in the retail media space intensifies, brands and retailers are feeling the pressure to meet consumer demands. As artificial intelligence (AI) advances, so too do the opportunities to provide consumers with unique advertising experiences. The rapid development of AI is putting us on the verge of a revolution in the retail media space.
Not only does AI have the power to deliver personalized and targeted content to consumers, it also provides retailers and brands with a seamless way to explore consumer insights. However, this is not without consequences. Consumers are fed up, and rightfully so. The questions surrounding the future of AI in retail media are: Can retailers be given the power to harness the data collected by AI? And can consumers trust these companies with their personal information? The answer is yes, but only if companies commit to responsible stewardship of the data they collect. Earning trust requires deft leverage, a delicate balancing act, and most importantly, transparency. This includes protecting consumer data, using it ethically, and ensuring AI applications enhance the customer experience in meaningful ways.
The evolution of retail media and artificial intelligence
The foundation of most modern marketing strategies is the Retail Media Network (RMN). A Retail Media Network is a platform that allows retailers to sell digital space on their websites for third-party advertising. Brands and retailers can use this network as an opportunity to engage directly with consumers. By using data analytics, advertising content can be tailored to the people who will like it most based on preferences and trends. For example, a brand that sells hard drives can use RMNs to display personalized ads for other hardware products on a retailer’s website. Retail Media Networks can target consumers who have previously shown interest in similar items on other websites. The recent increase in corporate personal data breaches is finally causing consumers to rightfully be concerned and demanding greater regulation and transparency from brands and retailers.
Privacy is a feature, not a hindrance
Throughout my career, I have come across business owners who thought they could ignore customer data protection, but this is simply not the case. In the past, when brands collected personal data from consumers, their information was at risk. Now, we no longer have to store personal data insecurely to provide a unique brand experience. I believe that the future of retail media networks will prioritize privacy to earn consumer trust. AI can help us rethink what we know about privacy and help brands collect data and ensure that the data is anonymous. It also enables us to cherry-pick data while protecting the identity of consumers. Data platforms powered by AI can help businesses understand consumers while respecting their privacy.
In the modern retail media landscape, companies must ensure consumers understand how companies use their data. Consumers should know how their data is used so they can have better control over their privacy.
AI can help consumers better understand how their information is being used, but it can also benefit businesses. AI-driven platforms can use data loss prevention (DLP) tools to detect and prevent any data breaches before they become serious. For example, the recent Nissan North America data breach exposed the information of more than 53,000 employees. An AI-driven security platform could have prevented this leak through algorithms that were able to detect potential leaks and report them to the data security team. I believe that combining AI and privacy as the foundation of any retail strategy will help businesses build better relationships based on trust.
The future of AI in retail media
I can say without a doubt that the future of retail media does not exist without AI. I believe the focus will shift from personalizing the consumer experience at the expense of privacy to ensuring that personalized content is delivered responsibly. One trend I see gaining traction is using AI platforms to educate consumers on how businesses might use their data before they click the “I agree” checkbox.
As consumers seek stricter data privacy regulations, brands need to be clear and honest about how they use data. AI-driven platforms can help businesses communicate with consumers by providing educational information about how data is used.
About the Author
Shobhit Khandelwal, CEO and founder of Carter, has extensive experience building data products and ad tech solutions for enterprise retailers and brands. After earning his master’s degree from Columbia University, he led product and data science teams at Citigroup, Jet.com, and Walmart in New York, and later moved to the Bay Area to lead analytics teams at MZ and Evernote. He co-founded Minoan Experience, a platform for creating “native retail experiences” by transforming spaces into customized shopping experiences. Shobhit was also the founder and CEO of ShyftLabs, a company that specializes in innovative data solutions for enterprises. Most recently, he led Carter, a privacy-first, AI-driven retail media network.
