This case well describes optimization in retail sales.
Artificial intelligence solves the problem of prediction based on historical data. First, buyers who purchased a product are taken. AI builds a model according to pre-selected parameters that indicate the propensity to buy. Then the model hosts a list of customers who have not yet purchased the same product. The model trains and points to those who are more likely to buy the product if offered to them.
The disadvantage of the approach is that for each product you need to build your own model. For example, for online stores with thousands of products, this is very costly. In addition, the model greatly narrows the target sample of customers - we only focus on those who potentially need the product.
This is where recommendation systems (RSs) come into play. Instead of hundreds of models, a "customers-products" matrix is being built. The intersection shows which of the customers bought which product. And on the basis of similar purchases, new offers are made where there are no intersections. So, for example, the system of online cinemas works.
The main advantage of the recommendation system is not the increase in the conversion of a client into a buyer. Because for both the model and the recommender system it is about 10-15%. The advantage of the recommender system is an increase in reach by about 40%. For those who need the product, there will be a 10-15% increase in conversion. And for those who are less inclined to buy it, it is only 1-2%. But these 1-2% - across the entire client base. And so with one marketing offer, you can reach many more people.
An important nuance: math cannot be considered in isolation from business.
If I am an online retailer, all I need to do is attach a recommender system to the site that starts offering products. The customer clicks on the products and, if interested, buys..
If I am an offline retailer, a bank, an insurance company, a telecom operator, for sales I have to make outgoing communication - calls, SMS, e-mail. And here we must admit that although the model itself gives a conversion increase of 10-15%, the conversion is strongly influenced by the method of sale. If I advertise something to a client and he needs to do something to buy (to go to the store, to an event, etc.), this creates a barrier. And automatically greatly drops the conversion. A customer might be very inclined to buy jeans, but if they were around, that's one possibility. And if you need to go somewhere or go after them, the degree of desire decreases.
There is no modeling here. There is a delivery process - the model will show one efficiency, no - a completely different one.
If we are talking about remote sales via phone, then I have not seen a conversion of more than 2-3% in principle. And if a person is connected to something remotely (for example, some kind of tariff), the total conversion from a call can reach 11-12%. If there is a process for delivering goods - for example, a bank offers cards and delivers them - the total conversion can reach up to 5%. That is, this part is even more dependent on the sales business process than on artificial intelligence modeling.