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A woman experiences a virtual fitting mirror backed by Alibaba’s AI technologies. Provided to China Daily

Today"s digital retail landscape has "spoiled" modern consumers who now have high expectations for a personalized shopping experience, and this means that marketers must improve customer interaction and meet these demands by tapping into artificial intelligence, according to industry experts.

Jacky Tang, general manager of Reo Communications, a digital agency in Shanghai, pointed out that AI technology can allow marketers to separate their customers into distinct categories and understand exactly what motivates them.

"By analyzing customers based on their movement among segments over time, we can achieve dynamic micro-segmentation, and predict future behavior in a very accurate fashion," he said.

Tencent Holdings Ltd, the developer of messaging app WeChat and mobile games, has been leveraging AI to create more personalized shopping experiences by allowing their partner merchants to customize their virtual storefronts for individual visitors. According to Tencent"s chief operating officer Ren Yuxin, the idea here is to offer real-time, tailor-made product recommendations based on a variety of factors like age, gender, location and purchasing power.

Over at Alibaba Group Holding Ltd, the world"s largest e-commerce site by transaction volume, AI is used to provide more precise search results and relevant product recommendations to users, which in turn drives sales.

According to Zhao Bin-qiang, an algorithm expert at Alibaba"s digital marketing business unit, the company"s "e-commerce brain" system can identify a consumer"s preference for certain products, price ranges, product specifications and other key parameters. It then uses the data to build models to predict what consumers want before making recommendations for relevant products.

Ren Peiyu, chief product officer and president of nEqual, a data technology firm, said that artificial intelligence is also playing an increasingly important role in helping marketers capture the right audience and engage with existing users.

He referred to the use of data management platform, which is in essence a unifying platform to manage, organize and activate any form of data from any source, and convert it in a way that is useful for marketers, publishers and other businesses to know their audiences.

Ren explained that such platforms can create a set of audiences based on a range of variables like demographics, geography and behavior to create a unified customer view. It can also translate data into useful information for marketers, publishers and other businesses to know their audiences better.

Fast-moving consumer goods, maternity and baby products, as well as automobiles are among the top three sectors that embrace such smart data management tools to optimize customer outreach, he noted.

"In China we notice a growing urgency for brands to trace where their marketing budget goes and how well the advertisements are tapping into prospective customers," said Ren.

He also highlighted how algorithm can make the lives of marketers easier. For example, AI can be used to identify target audiences simply by analyzing what advertisements people click online or the search terms they normally use.

"This will reduce the need for us marketers to understand every signal and define an audience, amid an influx of high velocity and high variance data," he said.

"Also, with new avenues such as the emergence of new social media platforms being added frequently for the customer to interact with products and services, AI"s probabilistic decision-based journey can help marketers adapt to the changes to the dynamic customer journey and target the audience with better precision."