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Improving the customer ecommerce experience with AI
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Brands fight for customers’ attention, so search results need to be accurate and fast. Staying abreast of the latest technological and merchandising trends like AI-powered search is crucial for retailers as they aim to provide their users with accurate and personalized search and browse experiences at lightning speed.

In our B2C Ecommerce Site Search Trends Report for 2024, we talked to leading IT decision makers (ITDM) and business decision makers (BDM) in the B2C ecommerce space. Looking beyond the basics of AI technology, the report’s data-driven insights take a close look at the when, where, and how leaders in the sector are using and implementing generative artificial intelligence and natural language processing (NLP) tools as well as their outlook for the future.

It’s clear that for ecommerce retailers of all sizes, AI is an increasingly important part of the technological mix. It helps fine-tune the business offering, shapes customer demand, and delivers outcomes that generate more powerful, meaningful, and personalized user experiences for their customers and end users.
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Accuracy and relevance — generating meaningful experiences

The heart of the search experience is about connecting customers to the products that they want to see and buy. Using AI to help generate more accurate and relevant results ultimately translates into a better user journey. The more relevant the outcome, the greater the likelihood of converting a user browsing online into a paying customer.

As with the in-store shopping experience, it’s all about generating meaningful experiences and presenting customers with what they want while also delivering well-curated options that they may not have considered.

The pleasure and convenience that comes out of that browsing and exploring turns an occasional shopper into a loyal customer. With this approach in mind, it is no surprise that over 64% of the ITDMs and BDMs we talked to are critically aware of the importance of using AI in helping shape their search strategy. They understand its value in not only generating bottom line results, but also helping them curate user journeys at all points along the sales funnel.

For those B2C retailers that have put into place AI-driven search and discovery technology,  the top factors driving their implementation decisions have been:

  • Increasing revenue
  • Meeting customer demand
  • Improving the overall user experience

Over 60% of retailers indicate that they are “very or quite satisfied” with the outcomes achieved using AI-powered search and discovery. As a result, it is no surprise that investment in the technology has seen a steady and broadly consistent increase year over year — a trend that is likely to continue into 2025.

AI-based site search — a keystone technology

More than half (53%) of the ITDMs and BDMs we talked to attribute their company’s ongoing investment in search as part of a larger competitive strategy. Respondents also view AI as an important tool to help deliver more personalized user journeys through more accurate and relevant search results.

Our research indicates that over 40% are investing in the technology to boost customer focus on their valuable digital real estate. It’s clear that B2C retailers are paying close attention to the quality and effectiveness of their search technology. They are also keenly aware of its critical role in increasing revenue and conversions.

The pros and cons of building vs. buying an off-the-shelf AI-powered search solution, as well as the costs involved with either option, are increasingly driving B2C companies to more dynamic and cost-effective intermediary solutions like customizable API technology. Nearly half (49%) of the businesses surveyed developed their search capabilities in collaboration with a third-party provider, and just over a quarter (28%) chose to rely on an in-house solution.

The limitations of pre-packaged off-the-shelf software account for the relatively low uptake of this alternative. On the other hand, there are significant challenges and costs to building a solution from the ground up. Respondents who chose this route pointed to a series of issues:

  • Shortage of development staff (37%)
  • Lack of expertise (43%)
  • Inability to adapt quickly enough to advancing trends (52%)

For many, a bespoke AI search solution implementation continues to pose significant business and cost challenges.

When it comes to B2C ecommerce, we know that most people operating in the sector are well aware of AI’s role as a keystone technology in the search and discovery space. Sixty percent of respondents acknowledge the important role played by AI in their businesses search strategy, and the critical role of generative AI in supporting product comparison (51%) and buyer’s guide (46%) tools.

Given this high level of awareness, it is no surprise that keeping up with a technology that is advancing at such a breakneck pace is an abiding concern. For players looking to keep up and take advantage of rapidly advancing improvements in the field, like multi-channel customer views and increasing personalization, making the right choice of AI-supported search and discovery solution is a critical business concern.

Offering a dynamic, cost-effective, highly customizable, and scalable API search and discovery solution, Algolia’s AI Search is at the heart of a gamut of powerful and adaptable AI based search technologies that help businesses guide and shape their customers’ online journeys.

With powerful merchandising and personalization tools and features, as well as lightning-fast and accurate retrieval capabilities, Algolia AI Search provides businesses, developers, and end users with an unparalleled AI-driven search experience.

A 2024 Gartner Magic Quadrant Leader for Search and Product Discovery, Algolia Search continues to set new benchmarks for search excellence, driving conversions, delighting customers, and bringing world-leading AI-based solutions to B2C retailers across the globe.

Find out more about AI search. Download the  B2C Ecommerce Site Search Trends Report for 2024.

About the authorTariq Khan

Tariq Khan

Director of Content Marketing

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