AI in eCommerce: Benefits, Use Cases, and Best Practices
By Bethany Llewellyn • Last updated: Thursday May 4th, 2023
The world of eCommerce is evolving rapidly, and one of the most significant driving forces behind this change is artificial intelligence (AI).
As competition in the online shopping space continues to grow, retailers are turning to AI to help them enhance user experiences, streamline operations, and gain a competitive advantage.
In this article, we’ll explore the benefits of AI for your eCommerce business, showcase real-world examples and share best practices for implementing AI technologies on your website.
Suggested reading: Discover more of the trends that are driving change in eCommerce in our eBook, ‘The State of eCommerce’.
What is artificial intelligence in eCommerce?
Artificial intelligence technology is being used to enhance various aspects of the online shopping experience.
It has now become a crucial component of the eCommerce industry, with its impact felt across multiple sectors of business operations.
From automated customer interactions to personalised Product Recommendations, AI and machine learning are helping to create more tailored and streamlined customer journeys.
AI enables eCommerce businesses to cater to the wants and needs of individual shoppers by:
- Analysing vast amounts of customer data to identify buying patterns and trends.
- Responding to the actions of online shoppers and personalising the on-site experience accordingly.
- Making access to customer support faster and easier.
Data shows that 84% of eCommerce businesses are actively working to integrate AI solutions or view them as a top priority, so now is the time to adapt or prepare to be left behind.1
Benefits of AI in eCommerce
The adoption of AI in eCommerce has presented numerous advantages to the industry.
And AI is not only beneficial for online consumers but also for eCommerce businesses.
By leveraging artificial intelligence and machine learning, online retailers can create a personalised experience that works to:
- Improve customer satisfaction
- Drive business growth
- Generate more sales
But how does AI do this? And what specific benefits does it offer eCommerce businesses? Some of the top capabilities it provides are:
- Uncovering valuable insights from big data: AI can analyse mass amounts of customer data to provide unique insights that humans would be unable to recover. Analysing big data in eCommerce allows businesses to provide genuinely relevant product suggestions to create a unique personalised shopping experience that makes each customer feel valued.
- Monitoring KPIs: Since AI has the power to monitor and analyse customer behaviour, you can keep track of key metrics like conversion rate, retention and website abandonment or monitor business operations like ROI from your marketing efforts or inventory management. These metrics be assessed using tools like Salesfire’s Trends to see how well a business is performing in comparison to its competitors.
- Offering intuitive virtual assistants: AI can help alleviate customer support tasks from eCommerce teams by handling simple customer requests to provide personalised, seamless AI customer journeys for online shoppers.
The benefits that come with AI are transforming the way online retail operates and are setting the example for today’s ever-changing consumer trends.
As more businesses utilise this technology, it’s now or never for retailers to evolve and embrace new opportunities for growth and innovation.
Suggested reading: Explore the importance of AI-driven customer experiences in our blog, ‘AI and the Customer Journey: What You Need to Know’.
Use cases of artificial intelligence
The implementation of AI in eCommerce is diverse, and there are numerous AI applications and integrations that can greatly enhance the online shopping experience in different ways.
More and more retailers are adopting AI technology, and by 2025 the global conversational AI market is expected to grow to $13.9 billion.2
By better understanding the use cases and best practices for AI, online businesses can make more informed and strategic business decisions about how to integrate this technology into their own operations.
Below are four key use cases that demonstrate the impact AI can have in the world of eCommerce.
1. Increasing personalisation through AI-driven recommendations
Personalised Recommendations are a powerful tool used by eCommerce retailers. By using AI to analyse customer browsing behaviour, retailers can provide truly relevant suggestions that lead to improved satisfaction and increased sales.
eCommerce AI personalisation comes in many forms, and can include user-specific Overlays or direct on-site recommendations. These can each be used to increase urgency in eCommerce and help to support the customer from discovery through to purchase.
2. Providing improved omnichannel customer service
AI-powered customer service channels, like chatbots, are a great way to enhance user experiences. Since AI can handle routine enquiries and tasks, humans gain more time to handle more complex issues to ensure that customer support is efficient and effective. This is just one way in which AI drives customer loyalty in the long term.
3. Allowing more accurate cross-site searches
Search engines can sometimes struggle to provide the relevant results that customers are looking for. However, visitors who use site search are 2 to 3 times more likely to convert, so by introducing AI, you can ensure you provide accurate and appropriate search results.3
Salesfire’s AI-powered Search tool makes site searches more accurate and effective by:
- Providing redirects when search results might typically come up empty.
- Providing auto-query suggestions to encourage easy navigation.
- Offering Search Promotions to boost on-site engagement.
4. Providing voice and visual search capabilities
As voice recognition improves and becomes increasingly popular, on-site Search solutions that offer voice capabilities will continue to dominate the eCommerce space by creating seamless and convenient solutions for customers.
The same goes for Visually Similar Search functions, which enable shoppers to locate items they love based on images they’ve found elsewhere. Salesfire’s advanced Visually Similar Search tool allows shoppers to crop and zoom in on specific items, replicating the engaging social media experience on-site.
It’s clear that artificial intelligence has the potential to revolutionise the eCommerce space as we know it.
As businesses continue to adopt and refine their strategies to introduce AI, they’ll be better equipped to meet the evolving needs of online shoppers, ultimately driving business growth, improving data-driven customer experiences and generating more revenue.
Best practices for implementing AI in eCommerce
Implementing AI into your strategy can be a game changer, but it’s essential to do so in a strategic and well-thought-out manner.
To ensure the best results when integrating AI technology into your eCommerce business, it’s crucial you are aware of the best practices to follow.
In doing so, you can harness the full potential of AI technologies while avoiding pitfalls that can compromise customer experiences and reduce loyalty.
Here are some best practices to keep in mind:
- Target multiple parts of the customer journey: Implement AI strategies at various points throughout the customer journey. From AI product discovery to post-purchase support, you can ensure you meet the needs of your customers no matter what stage of the funnel they’re at.
- Combine AI with human marketing strategies: Artificial intelligence is undeniably powerful but can sometimes be overdone when trying to replace human intuition and creativity. Combine AI real-time insights with human-led marketing strategies to create effective and well-rounded campaigns.
- Enhance personalisation, don’t suppress it: AI allows you to create a personalised experience individual to each visitor’s wants and needs. Don’t fall into the trap of generic marketing Instead, harness the power of machine learning to provide tailored solutions to your customers based on what they are actually looking for.
- Ensure data privacy and security: 77% of consumers are willing to share their personal data in return for a tailored experience and additional incentives.4 However, the increasing use of customer data and eCommerce personalisation means that it’s essential for eCommerce businesses to prioritise data security and privacy to maintain customer trust.
While AI comes with various benefits, if it is under or overused it can hinder your business and result in unhappy, disengaged customers.
Suggested reading: Learn more about the impact of AI on eCommerce by reading our article, ‘How AI is Revolutionising eCommerce’.
The future of AI in eCommerce
AI is constantly evolving and transforming the eCommerce space. It’s now impacting how eCommerce stores feature and sell their products or services to their customers, and presenting the opportunity to provide seamless shopping experiences.
By implementing AI in a strategic manner, online retailers can reap the benefits of cutting-edge technology and stay ahead of the competition.
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