There’s more to artificial intelligence (AI) than ChatGPT. It’s all around you, from search engines to individualized product recommendations. And, if you run an e-commerce site, it can help you provide an outstanding customer experience. This way, your online store can stand out in a crowded marketplace.
In this article, we’ll discuss the growing popularity of AI e-commerce. Then, we’ll go over some of the ways you can use it to improve your e-commerce site. Let’s get to it!
The Growing Popularity of AI E-Commerce
Before we show you how to use AI for e-commerce, let’s briefly talk about what it is and how it’s grown in popularity over the past few years.
First of all, AI refers to a computer program’s ability to analyze and interpret large data sets to solve problems without human input. What’s more, it seeks to better how humans would interact with the same information.
In recent years, AI adoption has been steady. It’s grown from 50-56% between 2020 and 2021 across industries globally. This is likely because companies increasingly recognize its power to improve business operations and sales.
Naturally, e-commerce is at the forefront when it comes to implementing AI. In fact, the market size for AI for e-commerce has been projected to more than triple between 2022 and 2023.
AI also lends itself well to e-commerce needs. For instance, it’s commonly seen in chatbots, automated personalization, etc. (more on that later).
How to Use AI for E-Commerce (5 Ways)
Now, let’s discuss a few ways you can use AI to improve your e-commerce business!
1. Provide Enhanced Personalization
Research shows that personalization strategies lead to increased sales, customer acquisition, and repeat business. Moreover, 73% of consumers expect personalized attention and 88% feel their experience with a brand is just as important as what it offers.
So, in a nutshell, personalizing the customer experience is a sure-fire way to improve your e-commerce business, and AI can help you do it.
For example, you can use AI for segmentation. You can collect important user data, then segment users by location, demographics, behaviors, and more.
Then, you’re able to offer tailored messaging, discounts, and recommendations. This will likely make your marketing efforts more effective:
If you suggest similar products based on past behavior, upselling and cross-selling your goods, you can significantly increase your Average Order Value (AOV).
2. Expand Your Customer Service
With AI, you can also give your customer service team a major leg up—thanks to chatbots.
Chatbots are excellent customer service representatives. They’re always available and can answer most routine questions before and after a sale.
Furthermore, more sophisticated AI-powered chatbots improve over time, learning from their interactions. That means they can become more useful the longer they’re active.
The utility of AI-powered chatbots goes beyond answering queries, though. You can also use them for personalization. They’re able to learn about a customer’s intent and interests and make personalized product recommendations.
On the whole, chatbots are versatile tools that can elevate the customer experience and boost sales—either by delivering answers or suggesting relevant items to purchase. Chatbots can also save you time and money in a more direct way, since they enable you to maintain a lean customer support team even while scaling.
3. Offer Improved Search
Another way you can improve your e-commerce site is by using AI to make it easier to search for products and information.
That’s because certain AI software uses natural language processing and machine learning to interpret inputs and make connections that drive intelligent and voice search.
Intelligent search anticipates the user’s needs before they finish typing them. It works from a large data set of search queries or past searches to determine what the most likely search is.
For example, if a user searched for a composition notebook recently, typing in “comp” might draw the suggestion “composition notebook”:
It’s simple, but it does more than save your customers finger strain. It saves them time, mental energy, and potential frustration. By anticipating what they’re searching for, you can increase the chances that they find it (and buy it).
Meanwhile, voice search removes the barrier of typing altogether. All you have to do is speak into a smart device.
As smart devices have become more common, voice searches have, too. More than half of adults who owned one used it as a voice assistant in 2022, and 57% of them used their voice assistant daily.
Unlike typewritten searches, voice searches tend to be conversational. That means a person conducting a search through a smart device will be more likely to ask a question than use a keyword.
You’re still able to optimize your site for voice search, though. You just have to focus on long-tail keywords. No matter if your customer is speaking or typing their search, AI can help remove friction from the search process.
4. Get Fast Pricing Optimization
Pricing optimization can be a tedious job, especially if you run a larger e-commerce site. The good news is that AI can take care of it for you!
Though pricing optimization can be automated without AI, it requires manually selecting triggering rules or events, like a competitor lowering their prices. Moreover, the automation has to be continuously tracked to ensure it’s working.
AI can use machine learning to circumvent that manual labor. Once you’ve set it up, it’s able to analyze huge data sets and make price adjustments in real time.
Beyond your initial inputs (your products, how much they cost, competitors’ prices, etc.) the AI can react to things like seasonality and weather.
A lot of companies can help you get started using the AI approach. For instance, 7Learnings will gather the inputs you need to set it up. After that, you can create parameters for it, such as how much of a discount you’re willing to give.
Pricing optimization is key for businesses, especially in the hyper-competitive e-commerce landscape. AI can drive higher profits by setting the right price at the right time.
5. Try Retargeting
The average conversion rate for e-commerce sites is a mere 3.68%. That means most people visiting your online store are likely leaving with nothing in hand.
Retargeting is identifying those past visitors and marketing to them again. The problem is finding them manually. If you’re able to, you’ll then need to segment them by behavior, interest, and other characteristics to determine the best candidates for conversion.
However, AI can track, analyze, and sort visitors for you. Some AI programs are even able to send the ads. That gives you more marketing precision and a better return on investment.
In fact, the click-through rates for retargeted ads are 76% higher on Facebook than ads sent to a general audience. One AI retargeting vendor is Criteo:
It can follow your site’s visitors after they’ve left and then make personalized product recommendations. Plus, it can select the right time and type of ad to show customers to maximize the odds that they’ll return.
Ultimately, using AI for retargeting can pay big dividends. It can help save your marketing team time, run the ads for you, and ensure that you’re after the right leads.
Conclusion
Using the right AI tools can do wonders for your customers’ experience and encourage repeat business. Moreover, it can save time and reduce costs. For example, you can use a chatbot to answer common questions and personalization to serve customers’ specific needs.
Do you have any questions about how to use AI to boost your e-commerce site? Let us know in the comments section below!
Photo by Andrew Neel