Shop Direct to 'double down' on artificial intelligence to drive sales

The online retailer, which reported a 43.6% leap in its underlying full-year pre-tax profits to £150.4m today, is making a “significant” investment in its use of artificial intelligence (AI) as a means of communicating with its customers while they are shopping online.

Utilising artificial intelligence

“The next big bet in personalisation is going to be artificial intelligence, it’s one of the big technology investments that we’re making right now and that we’re confident is going to pay off in another record year this year,” Baldock told Retail Week.

“We’ve experimented with AI to improve how we keep in touch with customers and we’re very encouraged by the early results, and it’s encouraged us to double down on our investment.”

Shop Direct has partnered with IBM Watson to communicate with shoppers after they have made a purchase from its Very.co.uk website, but Baldock said the technology has “much, much further to go.”

“There’s no reason why we can’t have every Very customer being able to talk to Very to get advice and recommendations on what’s right for her,” he said.

While Baldock said the online retailer was still in the experimental phase of using AI to improve its online offer, he said it would “continue to invest significantly” in the technology over the next year.

Increasing the team

Shop Direct has also made several senior team hires from outside the retail industry in recent months to drive its use of big data including Sasha Berson, who joins the retailer this month from Groupon.

“We’ve experimented with AI to improve how we keep in touch with customers and we’re very encouraged by the early results, and it’s encouraged us to double down on our investment”

Shop Direct boss Alex Baldock

“We do have a lot of data at our disposal here but the point is to pull the insight out of that data and our judgement has been that the best skills in that area lie outside of retail,” said Baldock.