by David McMahon, PerformNow
How AI will help build connections with customers and make retailers more competitive and adaptable in today’s rapidly evolving business environment.
As the home furnishings industry continues to embrace artificial intelligence (AI), businesses stand to benefit from enhanced efficiency, optimized customer experiences, and increased profitability. In recent discussions with performance group members and CRM software clients, I explored various AI-driven strategies across marketing, merchandising, sales, and operations. Here’s a look at these areas and some potential value-added AI use cases.
1. AI in Marketing: Data-driven Campaigns and Optimized Content Creation
AI’s data-processing capabilities are invaluable in the highly competitive home furnishings landscape. By analyzing customer demographics, preferences, and purchasing behavior, AI ena-bles marketing teams to develop targeted campaigns tailored to specific audiences. AI tools can process vast datasets, including website interactions, past purchases, and social media, creating robust customer profiles that inform advertising and promotional strategies. This pre-cision in targeting can maximize ad spend and improve the relevance of messaging, thereby enhancing conversion rates.
An entryway into AI for many furniture companies has been content creation. Tools like ChatGPT can generate content for product descriptions, blog posts, and social media posts. The result could increase SEO performance and improve online visibility. AI has the potential to re-fine existing promotional content and suggest improvements in engagement, tone, and clarity. For example, by analyzing past campaigns, AI can provide insights into messaging that may better resonate with customers. It also may offer actionable recommendations to make future promotions more impactful. The result for many retailers could be a more dynamic and respon-sive content strategy that keeps brands visible and relevant.
AI can analyze how competitive retailers position themselves in marketplaces with policies and current promotions. See an example below of an AI response (#1) to a query about what furni-ture retailers are advertising in the San Diego, California, market.
2. AI in Merchandising: Inventory Management and Trend Identification
Effective inventory management is a significant challenge in the home furnishings industry. Trends shift rapidly, and considerable inventory risks are common. AI-powered systems can help manage stock by forecasting demand, identifying top-selling products, flagging slow-moving inventory, and sourcing new products. AI insights can further assist businesses in maintaining optimal inventory balance, ensuring that popular items remain in stock and losses are mini-mized on slow-moving items.
AI can identify trends by analyzing data from online sources such as social media, industry re-ports, and competitor offerings. It can help businesses stay current with trends, such as popular materials, colors, and furniture designs. For example, if mid-century modern styles or eco-friendly materials are trending, AI can highlight this information, enabling businesses to con-sider adjusting product mixes accordingly. A proactive approach positions companies to re-spond faster to market changes, aligning inventory with customer preferences and avoiding the risk of stocking outdated items. It’s also a quick and easy way to research possible additions to product lineups before attending a furniture show. Retailers might, for example, ask ChatGPT, “What are some top-selling sofas in the USA?” See “AI Response #2:” at left.
Note that when asked the same question multiple times, whole-language chatbots like GPT will return different answers. Asking the right questions and qualifying them to limit source material can improve results.
Additionally, voice-activated queries in AI-driven systems will be able to allow staff to retrieve information about inventory levels, bestsellers, and other metrics in real-time without using their hands. This functionality will reduce the need for manual data entry and accelerates deci-sion-making, allowing employees to spend more time delivering exceptional customer service.
3. AI in Sales: Enhanced Training, AI Chat, QR Codes, and Personalized Communication.
AI can support sales by making training and resources more accessible. Sales teams can use AI tools to create and locate process documentation, training modules, and product information in a centralized, easily accessible location. Having immediate access to relevant data can help employees better understand products, handle objections, and engage with customers.
AI Chat: AI chatbots are begging to either co-exist or take the place of humans. Chatbots can now be “trained” and “learn” to process common questions asked by customers. These ques-tions can produce recommendations that in turn could pass a tangible lead on to a sales asso-ciate. The AI bot may recommend merchandise and provide a link to schedule an appointment with a real person, for example. A common question retailers ask is, “How do I manage the chat 24 hours a day?” The answer is “Turn on the AI Chatbot!”
QR Code Integration: Integrating QR codes into the retail experience is a popular way to en-hance in-store and remote shopping. QR codes linked to product details allow customers to ex-plore information at their own pace, viewing product specifications, pricing, and reviews with-out asking sales associates. This can empower customers and foster a more informed shopping experience, increasing satisfaction and sales volume.
AI Personalized Communication: AI enables personalized customer communication. With AI-enabled email templates and automation, businesses can automate post-purchase follow-up, offer tailored recommendations and generate customer reminders about new arrivals and spe-cial offers. These personalized interactions nurture customer relationships, increasing the like-lihood of repeat purchases and brand loyalty.
Below is an unedited AI-generated email template from our CRM software. It was created in one second by filling in standardized fields and a pull-down menu.
The query entered into the CRM content builder was to: “Build an email to add a rug to a room.” Then a choice of template was made, a subject specified, “Elevate Your Living Room with the Perfect Rug,” and preheader text entered, “Discover how adding the right rug can transform your living space.”
4. AI in Operations: Streamlined Documentation and Continuous Process Improvement
AI’s ability to record and document meetings is invaluable for operational efficiency, especially for large teams where accurate communication is crucial. Automated transcription tools cap-ture conversations, identify action items, and organize notes, ensuring that all team members clearly understand the next steps and priorities. This functionality reduces the time spent on manual note-taking and keeps everyone aligned on project goals. See the “Ideacast: Use Tech-nology to Sell More” example on page 10, based on AI output from a recorded meeting.
AI also plays a role in optimizing operational processes, from delivery to post-purchase ser-vices. For example, AI can analyze customer feedback and identify areas for improvement in delivery processes, such as customer pickups or white-glove delivery services. Data from past deliveries can highlight common challenges or delays, helping businesses refine procedures to reduce wait times and ensure seamless experiences.
To illustrate, below is a portion of an AI-generated checklist created by accessing customer feedback and delivery data.
Competitive Edge with AI
AI’s integration into the home furnishings industry offers transformative potential across mar-keting, merchandising, sales, and operations. By leveraging AI, businesses can deliver highly personalized customer experiences, streamline internal processes, and stay agile in response to changing market trends. Companies prioritizing AI-driven solutions will be well-positioned to lead in an increasingly digital and customer-centric market.
On the horizon are AI-enabled whole language models that promise to handle lead funnel shopper inquiries in a way that mimics natural human dialogues using real-time inventory and other data to coordinate post-inquiry follow-up.
Through capable technology leadership, organizations can use AI to strengthen their connec-tions with customers, making them more competitive and adaptable in today’s rapidly evolving business environment.
HIGHLIGHTS
“AI’s potential to refine existing promotional content and suggest improvements in engagement, tone, and clarity cannot be overstated.”
“Asking the right questions and qualifying them to limit source material will improve results.”
“AI can identify trends by analyzing data from online sources such as social media, industry re-ports, and competitor offerings.”
“Voice-activated queries in AI-driven systems provide a hands-free way for staff to retrieve information about inventory levels, bestsellers, and other metrics in real time.”
