In the eCommerce landscape, Artificial Intelligence (AI) is reshaping the game. This blog series explores how AI’s intelligent algorithms are revolutionizing online businesses, from personalized product recommendations to efficient inventory management. Join us for insights on leveraging AI to enhance the digital shopping experience and overall success in eCommerce.
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Rakesh Kumar, chief technology officer at Pimcore Global Services
In its Digital Economy Index report released in March 2021, Adobe claimed that 2022 would be the first trillion-dollar year for U.S. ecommerce. The increased adoption of artificial intelligence (AI) fuels this rapid growth, which is reshaping the ecommerce experience of today’s consumers.
From subtle changes like reducing product return rates to more apparent ones like hyper-personalized shopper journeys, retailers across the globe are experimenting with AI for a variety of use cases.
How SMBs are using AI
Thanks to the high emphasis on customer centricity, the need for human-centric AI interaction has become a vehicle not just to outdo the competition but deliver in a more open and resilient marketplace. Studies show that 70% of American and European decision-makers in the ecommerce industry believe that AI is a significant change for their business. AI is transforming the ecommerce industry by predicting customer shopping patterns based on purchase history, products searched, and browsing habits, as personalized product recommendations increasingly influence customer choices.
By entering the realm of customer behavior, AI is already assisting ecommerce businesses in online searches, identifying prospective consumers, sensing customer interests, presenting relevant products at the right time, and implementing analytics to broaden reach and customer base. AI is helping global brands like Nike raise the bar when delivering exceptional customer experiences. The iconic brand uses AI algorithms to offer tailored workout regimens and product recommendations as part of its customer loyalty programs.
But it’s not only the prominent players—mid-sized businesses are also leveraging the AI advantage to enhance customer experience. ecommerce retailers like The North Face utilize AI-driven virtual assistants to understand customer requirements better and provide personalized product recommendations based on real-time customer inputs.
2024 Leading Vendors to the Top 1000 Retailers Report
Simply put, AI enables ecommerce players to prepare better for the game ahead. Analyzing trends and customer behavior patterns can help improve sales processes and enhance strategic go-to-market decisions that impact the bottom line. Let us explore how:
Many believe that the emergence of disruptive technologies like AI and machine learning (ML) have contributed to the recent boom in online retail sales—up from $1.3 trillion in 2014 to $4.8 trillion in 2021. As borderless ecommerce becomes mainstream, AI is in for more rapid integration with retailers pumping in more money in tools that enable differentiators like personalized recommendations, voice search, virtual assistants, and more.
Researchers project retailer spending on AI to be $7.3 billion in 2022, with 54% on customer service and sentiment analysis, 30% on automated marketing, and 16% on-demand forecasting. Besides improving customer experience—the goal of any retailer—AI-driven platforms are increasingly used for demand forecasting, which is emerging as a vital tool for ecommerce businesses. With the advent of ‘special shopping days’ like Black Friday and Boxing Day, an accurate assessment of customer demand and correct inventory planning has attained utmost importance.
As we welcome 2022, ecommerce businesses face an interesting mix of challenges and opportunities, with little room for error. Top priorities are managing demands, adapting to fluctuating customer priorities, meeting sustainability goals, and tackling supply-chain disruptions. That said, as economies recover and demand gradually picks up, ecommerce business leaders will rely heavily on AI to unlock growth opportunities, adapt to changing consumer needs, and focus on the bottom line.
Pimcore provides open-source software for running ecommerce sites and data management systems.
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