With the holiday season fast approaching, many people are on the hunt for the perfect gifts for their loved ones. However, finding the right gift can be overwhelming and time-consuming due to the vast number of choices and limited information available.
To address this, Mastercard has introduced Shopping Muse, a new service that uses artificial intelligence to offer personalized recommendations on a retailer’s website. This service tailors suggestions to match each consumer’s unique profile, intent, and preferences, and it evolves with the context of the conversation over time.
Shopping Muse is powered by Dynamic Yield, a personalization platform and decision engine that Mastercard acquired from McDonald’s in April 2022. Dynamic Yield supports over 400 brands across various industries by delivering individualized product recommendations, offers, and content based on factors like past purchases, page views, customer affinity profiles, and AI algorithms.
So, how does Shopping Muse work? It’s a generative AI tool that helps consumers search for and discover products in a retailer’s digital catalog. By using a chatbot, consumers can receive tailored product recommendations, including suggestions for coordinating items and accessories. They can explore various aspects like aesthetics, trends, and dress codes using unconventional search terms, and Shopping Muse will provide relevant results.
The recommendations are personalized based on the consumer’s profile, intent, and preferences, and they build on the context of the conversation over time. The tool combines contextual and behavioral insights to produce recommendations informed by the retailer’s keywords, visuals, and the consumer’s own preferences. It can also recommend visually similar products based on image recognition, even if the technical tags are missing.
Shopping Muse takes into account the shopper’s browsing history and past purchases to better predict future buying intent. It ensures that the suggested items are complementary, not redundant, based on the consumer’s preferences and broader collective behavior.
Mastercard highlights several benefits of using Shopping Muse for both consumers and retailers:
– Saving time and effort: Shopping Muse simplifies the discovery of new products and reduces the risk of purchasing the wrong or unwanted item. It also makes it easier to find and buy complementary products.
– Enhancing customer satisfaction and loyalty: Shopping Muse offers a more personalized and engaging shopping experience, helping consumers find the most relevant and meaningful gifts. This increases the likelihood of repeat purchases and referrals, strengthening the relationship between consumers and retailers.
– Boosting sales and revenue: Shopping Muse drives more traffic and conversions to retailers’ websites, increasing the average order value and basket size. It also helps retailers showcase their products and services, differentiating them from the competition.
Shopping Muse is part of Mastercard’s broader strategy to leverage its data and services capabilities to provide more value beyond transactions. It aims to help customers and partners grow their businesses, engage consumers, and make smarter decisions with better outcomes across the enterprise.
This product exemplifies how AI is transforming the retail industry, creating new opportunities and challenges for both consumers and retailers. According to a Gartner report, by 2025, 80% of customer interactions will be managed by AI. A recent McKinsey report also predicts that AI will generate $400-660 billion in value for the retail industry.
However, AI also raises ethical and social issues, such as privacy, security, transparency, accountability, and bias, which need to be addressed and regulated. For example, how can consumers trust that AI recommendations are not influenced by retailers’ interests or incentives? How can consumers control and protect their personal data and preferences? These are some of the questions that Mastercard and other AI players in the retail space will need to answer and resolve in the coming years.