How ecommerce AI is reshaping business

Like other modern phenomena such as social media, artificial intelligence has landed on the ecommerce industry scene with a giant splash — not a drop, not a ripple, but a tidal wave.

The ecommerce industry has always been fairly dynamic. But recently, thanks to AI solutions, things seem to be accelerating at warp speed. The integration of AI in ecommerce stores isn’t just an upgrade for online retailers, it’s a true paradigm shift, as AI fundamentally overhauls many of the ways consumers shop, browse, and buy items online.

Now, in order to successfully appeal to online shoppers and boost sales by providing a great personalized shopping experience, ecommerce website managers can’t just rely on things like the quality of their products and, perhaps, the help of human virtual assistants toiling away remotely. To effectively meet the unique requirements of each potential customer who enters their online store, they need to leverage AI-enabled technology such as advanced search and personalized content.

How, exactly, is AI technology in ecommerce reshaping online business use cases? It’s permeating the customer journey, making its mark from initial product search to personalized product recommendations to customer support when things go wrong. It’s providing powerful features such as:

Here are some ways artificial intelligence is reimagining digital shopping.

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Customer-centric experiences

Just as it might not work in a physical store, a one-size-fits-all approach doesn’t work for online shoppers. The digital shopping customer experience has moved far beyond generic transactional processes and toward personalized customer journeys .

The reason? People like to be acknowledged, seen, heard, and understood. In other words, effective personalization works.

According to McKinsey , “Personalization drives performance and better customer outcomes. Companies that grow faster drive 40 percent more of their revenue from personalization than their slower-growing counterparts.”

Do you understand your customers? The closer you can get to anticipating their needs and delivering them the right solutions, the higher the revenue you’re likely to garner.

Predictive personalization

Anticipating the personal needs of customers is what modern ecommerce is all about.

Imagine, for example, that, now and then, on Thursdays, someone orders a hamburger through a food-delivery app. A savvy restaurant can use this kind of information to boost revenue. On Thursday morning, it can predict the customer’s potential preferences for that evening. The customer receives a well-timed offer — “Hungry for a burger? We’ve got some meal deals” — just as her stomach starts to growl. Offering a prediction-based solution keeps her satiated and loyal; rather than looking for other restaurants, she sticks around.

AI-powered virtual agents

Good news: customer service done by robots is no longer a sci-fi concept that works only in theory. The days of waiting on hold and having to navigate annoying phone trees are numbered, thanks to  optimization advanced by AI-powered virtual agents. Used effectively, these entities can answer common customer queries, leaving the more-complex issues for human agents to tackle.

Unparalleled availability

Traditional customer service is marked by limitations: limited hours, limited availability, limited ability to handle multiple queries. As a solution, chatbots can provide instant round-the-clock help. And when these bots work the night shift, that can also help reduce morning bottlenecks for human customer-service workers.

In a world where ecommerce businesses operate on a global scale and cater to customers across different time zones, 24×7 customer service ensures that anyone with a pressing question can receive prompt personal assistance. Ecommerce AI makes it easy for organizations to provide that.

Personalized assistance

Ecommerce AI has something business owners don’t: knowledge of comprehensive customer data.

A good customer-service employee in the real world might remember a regular customer, but certainly not recall the customer engagement record for everyone who’s ever entered the store. Online, customer relationship management (CRM) systems have helped businesses keep track of and audit shoppers’ cookie trails, but ecommerce AI fuels user-experience personalization at a much higher level.

The monolithic datasets that AI can often access and learn from are beyond human comprehension. Over a period of time, a virtual agent can refine its communication with a prospect based on what’s been collected about every previous conversation. That’s not something even the best salesperson can rival.

Ecommerce AI possesses another unparalleled advantage: speed. Access to vast datasets detailing information like previous customer interactions and purchase history in near real time — a matter of seconds — means quick query resolution. By contrast, a human agent would have to dig up a previous interaction, read through it, and, based on the information, attempt some good decision-making. So AI is far more efficient.

AI-powered search

In ecommerce, choices are everywhere. There are so many websites, offers, and products that shoppers can easily fall into a state of choice paralysis. As an article in Psychology Today points out, Rarely do you hear an ad for hot tubs or tires or whatever where the announcer says, “Come on down! We have limited options for you to choose from!”

And for an online marketer, the worst thing a shopper can be is overwhelmed, which means choice-narrowing search, personalized accurately for searchers, is a must.

Personalized search is like a digital concierge, giving shoppers options that resonate, a shopping journey that seems curated, and a sense of customer satisfaction. Good search engines segment and categorize, tag and prioritize, letting a customer control their retail exploration.

Ecommerce AI systems are playing a pivotal role in providing personalized recommendations in shoppers’ search results. It’s becoming more anticipatory; it feels to shoppers less like marketing functionality and more like being accompanied by a close friend. It knows you better than you do, at least when it comes to your online shopping habits.

For example, let’s reconsider the food-app customer. Maybe she likes ordering from three burger joints. By applying AI algorithms, her search results might prioritize those particular restaurants and offer her more of her favorite tantalizing options. Perhaps this person likes sweet-potato fries and, every so often, treats herself to a milkshake. That’s easy for the AI to keep track of, so with personalized search, “intuitive” culinary suggestions can find her just as she’s craving them.

Future trend: voice-activated search

Digital users are typing less and speaking more (as well as doing visual search ). In ecommerce, more than half of all consumers are researching products using voice-activated search . More than 20 percent of consumers are making purchases using a voice command, and that figure could very well go higher.

This practice has everything to do with ecommerce AI. Natural language processing (NLP) algorithms comprehend the intricacies of spoken language, enabling devices to not just understand words but grasp context and intent.

Better business decisions

Understanding your customer needs, desires, and concerns goes far beyond tracking their purchases. You can use customer-behavior analysis to figure out all the nuances of a shopper’s experience. Key data points such as what they click on first and how long they linger over an item. Whether they’re looking for bargains or just browsing to see what’s out there.

Prior to the advent of ecommerce AI, you’d have been hard pressed to get this type of in-depth merchandising information. Now, with advanced AI tools, you can track people’s browsing habits, customer preferences, and purchasing triggers in minute detail. Then in response, you can make the exact-right business decisions and show your customers just what they’re looking for.

Capitalize on ecommerce AI

Looking to automate and streamline your ecommerce platform operations with a profit-enhancing makeover?

The use of AI can help your business keep up with — and essentially get ahead of  — your customers’ evolving expectations. Ecommerce companies that ride the AI wave are better poised for success and more insulated from falling behind.

So when you’re ready, let’s talk about Algolia’s AI-powered ecommerce search tools and how we can help you seriously boost your conversion rates and ecommerce sales. We’re looking forward to hearing from you soon.

About the authorVincent Caruana

Vincent Caruana

Senior Digital Marketing Manager, SEO

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