So where is AI being used in ecommerce most commonly? And how can you put AI to work in your online store, without having to dispatch a team of developers? Read on to learn 4 areas that can be easily integrated into your ecomm business. In some cases, the tools are already at your fingertips!
1. Product predictions
Amazon is a master of AI and one place it’s most obvious is their “if you like this, you may also like that” product suggestions. Many ecommerce platforms already have the ability for you to make product suggestions built right into the system. If you’re using a platform that doesn’t already have the functionality built in, there are a plethora of apps/extensions to do this for you.
Giving product suggestions can obviously boost average sale value, but it will also increase total lifetime customer value and may increase your customer loyalty. If customers can find more of what they need from your store, and have it easily displayed, they are more likely to keep shopping. It’s the reason people keep going back to Amazon again and again.
But the reverse is also true- if product recommendations are not relevant to the customer, they are likely to leave the site. So put time, effort and research into connecting similar products. Which products are often sold together? Which products do repeat customers buy?
2. Price optimization
Dynamic pricing optimization services use AI to vary the price of products based on a set of pre-determined variables. This can be done by site visitor or by product, or both. Price optimization allows you to achieve higher gross profits by capturing sales you would have lost at a higher price, and charging more for sales you would have typically captured at a lower price.
Driving the optimization is a critical mass of data that provides the necessary scale for statistically significant decision making by the AI. As the data grows and the AI learns, it adds increasing value, continuing to optimize and continuing to maximize profit. In other words, the longer you use an AI-enabled price optimization solution, the smarter it becomes, increasing your gross profits more and more over time.
The work required to integrate price optimization into your business varies and depends on the provider, with some being a simple install of an extension and others requiring a lot of custom development done by either the vendor or the online retailer. Most providers give the retailer a range of admin settings to control the operation of the optimization service.
Nearly every website you visit now has a chat option of some kind. In fact, if you don’t have any chat option at all on your site now, you’re losing sales. Many of those chat features now are not monitored by humans 24/7- they are chatbots. Getting started with a chatbot requires some up-front work, you have to design a playbook of questions that site visitors are likely to ask along with answers and links to point customers to the right places on your site to find what they need. But the work is worth it if it means that site visitors can find what they need and don’t go looking elsewhere.
Plus, you can configure your chatbot to capture contact information from site visitors who interact with it—meaning one of your customer service channels has now transformed into a lead-generation machine.
4. Personalized shopping experience
eCommerce retailers have personalized shopping for their consumers by linking site behavior to marketing efforts. Search for a porch swing on shopping giant Wayfair and you’ll soon be getting emails from them specifically related to their porch swing selection.
Some companies also link site behavior to marketing by using AI to tell if a customer is price-sensitive or if convenience matters more to them. The site can then offer a 10% off pop-up to the price-sensitive customer and a free 2 day shipping offer to the convenience-oriented customer.
According to a report by Boston Consulting Group, ecommerce websites that have utilized personalization strategies often see sales increases of 6-10%.
An Accenture survey takes it one step further- saying that 91% of consumers are more likely to shop with brands who provide incentives and product recommendations that are personally tailored to the consumer.
While the concept of adding AI-powered tools to your current ecommerce workflow may sound like a huge project, the reality is that there are already a plethora of services available to help you do things like personalize the shopping experience, increase your profits and interact more efficiently with site visitors.