AI and personalization are doing something huge to ecommerce. They’re not just helping retail businesses increase revenue. They’re also reshaping the way people shop online.
AI-driven personalization, chatbots, predictive analytics, voice commerce, visual search — these technologies are individualizing the shopping experience. As a result, today, attracting customers, nurturing, and loyalty are less about reaching an audience and more about creating and fostering relationships with individual customers.
That means, in the future, ecommerce brands targeting a general audience will be left behind. And those that excel at personalization and AI are more likely to be tomorrow’s leaders.
At Guidance, we specialize in ecommerce web development and know how important it is to stay abreast of technological advancements. This article explores what AI technologies retail is using today, the impact of personalization and AI, and what that means for the future of ecommerce.
The Role of Personalization and AI in Ecommerce Today
Ecommerce personalization is the process of creating customized experiences at every touchpoint along a customer journey. Ads, emails, and even web content are personalized for the individual.
Artificial intelligence technologies are what developers use to make online personalization at scale possible and to deliver increasingly sophisticated targeted experiences.
With AI and personalization, your ecommerce website is not just a static online presence and purchasing portal. For every visitor, it jumps to life, offering segment-specific content, personalized recommendations, and intelligent search results.
Here’s an example of personalization in action: When the expert team at Guidance helped King Arthur Baking Company re-platform with BigCommerce, we included specially made product carousels so shoppers see the top-selling products in real-time.
This feature helps to increase conversions and improve the shopping experience.
Read more about how Guidance helped the baking brand increase conversions and customer satisfaction in our King Arthur case study.
Types of AI Used in Ecommerce
Ecommerce uses different types of AI to offer more personalized and better streamlined shopping experiences. Here is an overview of the three main types of AI found in ecommerce:
- Natural language processing (NLP) is a technology that enables computers to interpret, understand, and generate human language. Chatbots and virtual assistants use this type of AI.
- Computer vision (CV) allows computers to comprehend visual information from images and videos. Visual search relies on CV technology.
- Machine learning (ML) enables computers to learn from data and make predictions or decisions through the use of algorithms and other statistical techniques. Predictive analytics and AI-driven personalization use machine learning technology.
5 Ways AI and Personalization Are Changing Ecommerce Web Development
There are a lot of reasons AI and personalization in ecommerce are becoming the norm. AI technologies and personalization are improving the customer experience (CX), leading to more engagement, conversions, loyalty, and sales.
Take a look at the numbers to see the impact on ecommerce:
- Greater engagement: Four out of five consumers say they are willing to share some type of personal data, such as an email or their age, for a better experience.
- Higher conversion rates: Ninety-nine percent of B2B marketers say using AI chatbots increases their lead conversion rates.
- Customer loyalty: According to research by McKinsey, 78% of consumers are likely to make repeat purchases with a business that personalizes.
- Increased revenue: The same research found that personalization lifts revenue by 10% to 15%.
If you want to elevate your ecommerce experience, here are five ways to use AI technologies and win over customers.
1. AI-Driven Personalization Customizes the Shopping Experience
AI-driven personalization delivers tailored recommendations, messaging, and user experience (UX) flows to help customers discover new products, shop with ease, and feel special when engaging with a brand online.
Our partner Adobe Commerce has an AI tool called Adobe Sensei, which works on the backend to automatically create personalized recommendations for individual shoppers based on their past behavior.
Adobe Commerce’s AI-powered personalization is able to help businesses experience 10 times more conversions and a 9 times higher average order value.
Optimizely has an AI-driven feature called Dynamic Product Recommendations. It lets businesses build and customize widgets that deliver personalized recommendations to individual shoppers.
2. Chatbots and Virtual Assistants Revolutionize Customer Service
AI-powered chatbots and virtual assistants can offer product recommendations based on search and purchase history and other behavioral data, handle customer inquiries, and even process orders.
According to a recent study by Deloitte, 45% of consumer brands are using voice assistants, chatbots, and conversational AI regularly. These technologies can improve customer service and boost sales.
With generative AI, which is the technology that powers tools like ChatGPT and DALL-E to create content, chatbots and virtual assistants are becoming even more sophisticated. Forward-thinking businesses are already using generative AI chatbots and virtual assistants to offer more natural and conversational responses to improve CX.
3. Predictive Analytics Fuels Smarter Decision-Making
Predictive analytics takes historical data and uses it to make predictions and generate recommendations that can help businesses improve their marketing campaigns and digital user experiences.
Businesses can integrate their ecommerce platforms with tools that will collect and analyze data from customer relationship management (CRM) software, digital experience platform (DXP) software, and their websites to access insights on product pricing, customer preferences, and marketing.
Many enterprise ecommerce platforms have built-in predictive analytics, making it even easier to access AI insights.
Optimizely uses predictive analytics to generate insights on customer behavior, such as the likeliness of a near-future conversion.
BigCommerce offer features that allow businesses to see predictive analytics insights in a few clicks. The platform’s Ecommerce Insights creates weekly reports on everything from product descriptions that need to be improved to what products to use in your marketing efforts.
4. Voice Commerce Offers Frictionless Purchases
Voice commerce, also known as voice shopping or voice ordering, is when customers place orders using their voice.
This touchless purchasing process is made possible by voice assistants like Apple’s Siri, Amazon’s Alexa, and Google Assistant.
Voice commerce is growly rapidly. Already in 2022, over 27% of American consumers were making online purchases with smart speakers and other voice assistants. From 2021 to 2023, the global value of voice commerce is expected to grow fourfold, reaching close to $20 billion.
Why the swift rise? According to consumers, the appeal of voice is the easy and fast shopping experience.
And, as the ecommerce world knows well from past experiences with convenient innovations like mobile shopping and Buy Now Pay Later, once people realize a new technology is more convenient, it goes from trendy to normal almost overnight.
5. Visual Search Makes Searches More Useful
With visual search, AI-based algorithms detect features and patterns of an image or use image metadata to identify similar images, and then deliver those search results to the user.
Visual search is still relatively new, but it’s becoming a preferred search method for younger generations — research shows that 62% of millennial and Gen Z shoppers want visual search capabilities.
Visual search engines like Google Lens, Snapchat Scan, and Amazon StyleSnap are helping shoppers find products that match their aesthetic preferences. They’re also helping retail brands decrease friction in the shopping experience.
Visual search makes it easier for customers to find the products they’re looking for. It also removes the clutter of text-based search results, helping customers cut through ecommerce noise and make faster purchase decisions.
Ecommerce brands can take advantage of this type of AI by optimizing online images, building a robust (and visually pleasing) presence on social media, and using tools that link visual search engines to your product catalogs. For example, Shopify merchants can use the Pinterest App to organically reach Pinterest users.
You can also benefit from custom solutions that connect your ecommerce platform to the systems and data you need to elevate the shopping experience for your customers,
Make an Impact on Your Bottom Line with AI and Personalization Solutions from Guidance
Take your ecommerce platform to the next level with AI and personalization solutions that help you future-proof your shopping experience.
Guidance can develop high-powered solutions that help you take advantage of AI-driven personalization, predictive analytics, voice commerce, and more. Contact us today to learn more about our web development services.