How is AI changing the shopping experience in the eCommerce market?

Application of AI Automation in eCommerce Services

Alan Turing, the British progenitor of computing science and inspiration behind the film Imitation Game, expounded the possibilities of AI in his 1950 journal Computing Machinery and Intelligence. He underpinned the theory that machines can display similar kinds of problem-solving skills and cognitive capabilities as humans. This laid the groundwork for AI.

Fast-forward 50 years, AI was not a theoretical possibility anymore. It had become the reality.

In this day and age, Artificial Intelligence has consumed every aspect of our lives and we don’t even realize it. According to a study by HubSpot, 63% of people don’t know that they are engaging with AI technologies. From the GPS used for navigation to the smartboards used for classroom teaching, AI has changed the way we perform our daily activities. This puts forth the fundamental question: Are we controlling the machines or are the machines controlling us?

Needless to say, artificial intelligence has made every cumbersome and mundane activity fun, dynamic and engaging, including shopping. Speaking of shopping, did you know that the retail industries were one of the early adopters of AI?

Unlike the robots we have seen in movies like Wall-e and Terminator, AI for digital commerce platforms relies heavily on algorithms and tools. It usually comprises three components: Natural Process Language (NPL), neural networks and Machine Learning (ML).

With the proliferation of these technologies, one thing is for sure. The online marketplace has become a treasure trove of creativity and advanced innovations.

How has AI impacted every length and breadth of the eCommerce industry?

The origin of a digital marketplace dates back to the inception of Amazon. Who would have imagined that the world’s largest online retailer would become everyone’s favorite shopping companion? That’s because Amazon adopted the flywheel approach. By prioritizing its customers’ needs, the shopping giant leveraged AI and ML to reorient its business workflows, models and strategies.

Taking cue from Amazon, other eCommerce platforms have started tapping into AI to offer products and services in tandem with consumers’ needs. They are enabling AI tools to collect customer insights, enhance revenues, improve data analysis and boost revenues.

Let’s deep-dive further into how AI-powered technologies can stimulate your eCommerce journey.

Personalization for maximum customer satisfaction

Out of all the major music streaming platforms, Spotify has perfectly nailed the game of personalization. It creates a customized playlist based on your preferences and moods. If that’s not all, Spotify launches its annual marketing campaign called Wrapped. It’s a compilation of a user’s yearly activity and interactions with the platform. You get to know your top 5 artists, genres, songs and the total hours spent on the streaming platform. But how does Spotify’s personalization marketing hit the right notes? The audio giant is high on machine learning and artificial intelligence. By leveraging these technologies, it examines the user’s listening patterns and converts them into data. This data is then used for recommending songs and genres to the listener. By creating emotional resonance in its marketing efforts, Spotify’s campaigns have always struck a chord with audiophiles.

Marketers need to understand that customers will remain committed to brands that deliver exclusive and individualized experiences. Artificial Intelligence helps to display customized products that a shopper wants to actually buy. It employs big data to evaluate consumer buying behaviors across different touchpoints and acquire information from transaction history and previous activity. But that’s not all. AI can predict future purchasing trends and create tailor-made and strategic marketing strategies.

During COVID-19, people engaged in virtual shopping that blended the lines between online and physical stores. People were able to browse products the same way they would do at a regular store. This was possible due to AI. It tracked users’ preferences with predictive analysis and face recognition, resulting in stimulating phygital (physical+digital) experiences.

Virtual shopping assistants are redefining customer experience

You may have browsed through shopping websites umpteen times and encountered a pop-up message that says “How may I help you?” That is the definition of a virtual shopping assistant. It is basically a software program that integrates AI and big data to decode human language with Natural Language Processing. Virtual assistants are designed to recognize a consumer’s voice to process orders and requests. Besides, they can also identify users’ shopping habits based on brand loyalties, consciousness and preferences. Not to mention, virtual assistants can offer useful feedback to the system based consumer’s interaction with the website.

According to a report by Statista, 46% of users prefer shopping through self-service virtual assistance. Automation has clearly helped virtual assistants forge personal connections with consumers. By leveraging data science and machine learning, they have significantly improved customer services and retention.

Chatbots can give a human touch to the brand

Spike Jonze’s ethereal masterpiece Her portrayed a romantic relationship between a human and chatbot named Samantha. But what if we say that this film is not science-fiction anymore. Even though this movie was set in the context of dating, the role of chatbots has actually evolved beyond machines. In the world of online shopping, eCommerce platforms are integrating AI chatbots to fill the empathy gap between consumers.

Powered by machine learning and National Processing Language (NPL), AI chatbots allocate numerical scores against emotions like happiness, anger and frustration. This process is called sentiment analysis. It helps in delivering accurate responses to customer queries and mapping consumer journeys. But the best part of sentiment analysis is that it allows chatbots to adapt to customer moods in real–time and personalize services accordingly.

Visual Search is breaking the mold of online shopping

Did you know that Tommy Hilfiger was the first fashion brand to venture into visual search marketing and host its very first shoppable fashion show? For the 2017 LA Fashion Week, it collaborated with Slyce, a visual search engine, to develop the SNAP: SHOP app. The app allowed attendees to take snaps of the outfits worn by runaway models and direct them to the brand’s eCommerce page. This activity gained instant success among shoppers and generated a sharp 200 % increase in ROI.

Since then, AI–enabled visual search has come a long way in crafting remarkable customer experiences. Visual search engines are built upon neural networks. These networks use machine learning to identify shapes and outlines in a single image and enable users to match with different objects. Consumers have often canceled their transactions as they found it difficult and time-consuming to search for products online. For this reason, major eCommerce platforms are bending over backwards to enhance their visual search capabilities for better visibility and quicker purchases. Some retail brands are even partnering with Pinterest, Google Lens and Pinterest to drive traffic to their homepage and boost their SEO rankings.

Developing new and innovative products

Product research development can make or break a business for eCommerce platforms. Not every new product that is displayed online will sell like hot cakes. This happens mainly due to poor market research and inaccurate product positioning. AI studies forecasts, selections and shopping patterns to generate reliable data on buying behaviors, disposable income and product types. This helps in effective research and development.

Paving new way for quality content management systems

Content Management System is the part and parcel of superior customer experiences. Artificial Intelligence can develop high-end content management systems for designing, cataloging and selling products. They add granularity to the consumer segmentation process that helps in constructing distinct user profiles and curating customer journeys based on these personas.

Putting a stop on customer churn

Customer churn has plagued the eCommerce industry. Increased competitors, outdated marketing models and run-of-the-mill services are the primary reasons why consumers leave an eCommerce site. This is why customer retention has drawn immediate attention from big digital commerce platforms. AI can come to aid. By leveraging the machine learning system, it can predict consumer turnover rates. This can help brands prepare initiatives to reduce customer churn.

Steer forward in your AI journey with Concord Commerce

We are living in a time where robots are being used to serve food at restaurants. This is the power of the AI revolution. And it’s going to be much bigger and more impactful in the coming years. For your eCommerce platform, AI is like oxygen. Without this tech innovation, your business is as dead as the dodo. Very soon, AI will emerge as the next digital frontier in the eCommerce landscape.

Don’t get left behind. Integrate AI with Enterprise Resource Planning ERP to maintain coherence across key areas of your eCommerce business. Get started with Concord Commerce. Leverage MACH (Microservices, API, Cloud commerce and headless commerce) architecture to seamlessly deploy AI-powered technologies. Improve operational efficiency, create real-time customer services, remove redundancies and enhance data analysis.

Schedule a demo today!