AI in e-commerce and the new era of personalization
As society as a whole pursues convenience and moves away from traditional brick-and-mortarretailmodels toward online shopping, online retailers must change their relationship with customers. way of interaction. The idea of providing a personalized shopping experience for each customer has always been around, but now we've officially entered a new era of personalization. This is an era that includes and requires artificial intelligence (AI).
E-commerce businesses have integrated AI into their online operations to better understand their customers and enhance the shopping experience. When shopping at any major online retailer, you're likely to see the AI branding and experience the benefits of AI. In fact, AI has become a must-have for online retail success.
How can artificial intelligence help you shop?
With the focus on personalization, customers expect 24/7 access to businesses, and businesses need customized advice, content and support to close deals. With the help of AI, businesses can not only collect important customer data in real-time but also better improve the online shopping experience by anticipating customer needs.
Currently, there are dozens of large retailers in the market innovating in this space, developing powerful AI and deep learning solutions to support their sales strategies. As personalization reaches its highest level, we need to pay attention to the following key areas:
1. Search engine function
Searching for products is easier and more valuable than ever. By leveraging natural language processing technology, AI can narrow down relevant search results for customers and incorporate context, which is customer-centric search technology. Not long ago, a search for "boat shoes" would bring up both boat and footwear products. Now, the search is even more advanced because the AI knows you don’t need any boat products, just shoes.
Even the display of results has changed. Today, AI can display search results in an understandable and intuitive way, grouping similar items as needed. AI tags each product with specific attributes such as size, color, shape, and category. These tags allow search engines to provide relevant results and compare products. Additionally, AI can use these tags to show you complementary products (for example, suggesting dryer sheets when you search for laundry detergent).
Through search engine functionality alone, AI can more quickly recommend products to customers that they want, reducing the time for each transaction.
2. Product recommendations
You may have noticed that most e-commerce businesses regularly recommend products to you. Streaming services recommend movies for you, while clothing stores send you emails with outfits you might like and more. Behind all these suggestions is artificial intelligence.
The computer looks at valuable data to provide the product recommendations you see: shopping history, search history, third-party data, and relevant demographic information about each customer. They analyze what customers similar to you have purchased recently and use predictive behavior patterns to guess what you might want to purchase in the near future.
Yes, retailers know how annoying it is when you repeatedly receive unwanted product recommendations. They don’t want to lose you as a potential customer because of unsuitable recommendations, which is why using AI algorithms correctly is so important: relevant, high-value recommendations can help businesses increase conversion rates and shorten sales cycles.
3. Web interface
We are in an era where brands need to be “accessible.” Take a look at any major fast food company on social media and you'll see how they interact with anyone they connect with in a friendly, approachable (and sometimes humorous) way. It is also important for online retailers to make customers feel welcome while still providing a personalized experience, which is why they are turning to AI.
The computer not only provides product recommendations but also looks at the customer's location, shopping history, search history and other data to do more. In effect, AI can change the web interface that customers see. With a customizable web interface, retailers can push relevant and useful content tailored to customers at the right time, rather than pushing generic content to all potential customers. As a result, they increase customer engagement and the likelihood of a purchase.
4. Customer Data
In the age of personalization, e-commerce businesses will continue to stay ahead of the curve if they not only collect the right customer data, but also analyze and use that data to drive strategy. Customer data insights gathered through an AI lens can help retailers better understand their target customers and even drive them to discover new target customer segments.
Data insights can also support them in making strategic decisions about when to offer promotions and discounts. The insights gathered by AI can also influence decisions companies make about which new products to offer or which products to return, making AI’s impact even more profound.
5. Experience covering various devices
E-commerce businesses are trying to reach you through your mobile phone, their website, email marketing campaigns, and the latest technology (wearables). AI aggregates the results of feedback from all these devices to give companies a complete understanding of their customers and how they use technology, which in turn helps companies target customers.
In the future, you might see a scenario where you're browsing tents on an online retailer's website on your computer when your phone gets a notification for a new sale - 50% off all camping gear! This approach provides customers with a more integrated shopping experience, creating higher value for customers by quickly connecting them with what they need.
6. Customer Service
Customer service is an important part of shopping, whether online or in-store. When you shop online, there won't be a salesperson ready to answer your questions or help you find what you need. We know that banks are trying to solve this problem with chatbots and virtual assistants, and online retailers are doing the same.
Chatbots can use large amounts of natural language data and observed speech patterns to simulate human conversations. In an age where customer service must be available 24/7, chatbots never need a break and can handle automated processes like orders and returns in a split second. Chatbots can also be used to help customers find what they are looking for and answer any questions, thereby providing added convenience to customers as they no longer need to send emails or call customer service.
Retailers are also using chatbots to target you on social media platforms. Brands know that you are often logged into your social media profiles when shopping online. They are now starting to take advantage of this. For example, by sending you a Facebook message, updating you on your recent order or sending you new promotions.
Read Danny Asling's Linnworks article to learn about the use of AI in e-commerce.
The future of AI in e-commerce
Providing personalized e-commerce experiences across platforms and devices is critical for online retailers to stay ahead of the curve. Currently, AI is the only way to efficiently and professionally customize the shopping experience for individual customers.
By embedding AI into online shopping platforms, retailers gain the following benefits:
- Increase customer engagement across all platforms
- Improve conversion rate
- Shorten sales cycles and transaction times
- Discover new target customer groups
- Improve customer retention by delivering a better, customized customer experience
AI can do what no sales team can: analyze millions of transactions every day to create hyper-personalized customer experiences. With the help of AI technology, companies can gain unprecedented customer insights, thereby creating higher value for customers and higher profits for themselves.
These changes will continue, and as such, brands must ensure transparency and security, finding a balance between personalization and customer data privacy. If a business offers a high-value product/service, customers are more likely to share their personal details. Keep this in mind: Businesses must work to bridge the gap between personalization and privacy.
The future of e-commerce will continue to show us how artificial intelligence can be further integrated into our lives. What’s the next trend in online shopping? For customers, it may be the arrival of the era of “hyper-hyper personalization”.