Over 50% of all e-commerce shop owners have implemented AI to better their operations and boost sales.
Are they onto something? Is technology the holy grail of today’s online shopping? Or maybe it’s all in the way you use it? Let’s explore the best examples of how AI can actually help you out – backed by research.
How Is AI Changing e-Commerce?
In 2024, e-commerce sales in retail grew by as much as 10% compared to 2023. Online shopping has been thriving since the pandemic – and the tide is nowhere near turning. In fact, all the signs point to its power only rising in the years to come.
While that bodes well for e-commerce businesses, it also means that they need to become more and more competitive if they want to keep their current sales. Yes, online shopping’s big advantages are comfort and speed – but it’s not enough when everyone else is doing it, too.
That’s one of the reasons so many e-shop owners turn to AI to differentiate their offers and provide customers with experiences as unique, tailored, and engaging, as possible. What started as simple chatbots that dealt with easy customer queries has been growing into a powerful technology that handles inventory management or creates visual search tools to make shopping easier.
Today, the impact of AI in the e-commerce industry is undeniable and its benefits – more enticing than ever. Below, we’re taking a short look at numbers that prove it!
Benefits of AI in e-Commerce
- AI-powered forecasting can reduce errors by 30% to 50% in supply chain networks.
- Companies leveraging AI are seeing an average revenue increase of 10-12%.
- AI can boost sales by 59% in product recommendations in the e-commerce sector.
- 30% of e-commerce business owners claim using AI has helped them optimize processes related to marketing.
- Using AI in e-commerce can boost customer satisfaction by 25%.
- AI-driven recommendations are reported to increase the purchase rate by 30%.
9 AI Use Cases in e-Commerce
Okay, so we know AI can be great for an e-commerce business. But how do you use it in 2024?
1. Hyper-personalization
A whopping 80% of customers are more willing to buy from a company that offers personalized experiences. In the online shopping sphere, personalization is even more important, as it’s easy to get drowned out in the sea of content and offers.
That’s why AI-driven hyper-personalization can be so important to stand out from the crowd and make the customer drawn to your online brand. This can include ultra-tailored ads, the right type of content at the right time, or pre-populated applications.
All of that can greatly increase customer satisfaction, customer loyalty, and, in the end, your sales.
2. Dynamic pricing
Ever heard of prices adjusted dynamically by AI algorithms?
It’s the future of online shopping – and a great strategy to maximize your revenue, improve competitiveness, and quickly respond to market trends. When taking both customer behavior and industry movements into consideration, it’s easier to optimize the price for both profitability and customer satisfaction.
3. Visual search tools
Not being able to find a product you’re interested in is one of the top reasons behind customers leaving e-commerce web pages without making a purchase.
This problem can be largely solved by visual search tools. Using machine learning, artificial intelligence, and computer vision to analyze features such as color, shape, and patterns, these types of innovative search bars allow customers to look for products by uploading photos of their desired items.
Result? They’re more satisfied, and you report more sales. Win-win!
4. Virtual fitting rooms
Almost 25% of Gen Z consumers in the luxury sector have used virtual fitting rooms.
What are they? It’s a technology using augmented reality and AI to let customers visualize how clothing or accessories will look and fit on their bodies without physically trying them on.
Virtual fitting rooms are incredible at boosting customer engagement – they also reduce return rates, as clients have a better picture of how their online purchases will look in real life.
5. Recommendation engines
Ever watched a Netflix “recommended for you” movie?
As we’re being flooded by content, it gets harder and harder to choose offers that may be right for us. That’s why AI product recommendations can be a godsend – for both customers and online sellers. B
y providing personalized suggestions tailored to each consumer’s behavior and preferences, they enhance the shopping experience. According to research, product recommendations can drive up to 31% of e-commerce site revenues.
6. Chatbots & Natural Language Processing
While chatbots in e-commerce are definitely nothing new, their quality and ability to handle customers’ queries have skyrocketed.
Comparing the first chatbots to what they are now would be like comparing day and night. Using Natural Language Processing, modern chatbots are sophisticated systems that can understand context and even complex sentences while also producing very natural and human-like texts.
What’s more, they’re increasingly liked by consumers, 61% of whom feel that chatbots save their time when online shopping.
7. Sales and demand forecasting
AI tools can be great for tracking past customer behavior and predicting future trends by analyzing purchase patterns, seasonality, and market dynamics.
These insights help e-commerce businesses optimize inventory management, making sure popular products are always in stock while avoiding overstocking slow-moving items. In fact, AI and automation can reduce inventory costs by up to 25%.
8. Voice shopping assistants
Let’s be real here – modern customers are lazy.
With access to so much technology and all the content in the world, they’re often overwhelmed and need someone (or something) to hold them by the hand while making purchase choices. And increasingly often, that hand is a voice.
Voice shopping assistants, allowing customers to search for, compare, and purchase products using simple voice commands through smart devices, are gaining popularity due to their convenience.
All it takes is to whip up a phone and let Siri or Google Assistant handle the rest. Who wouldn’t want that?
9. Generate customer insights
While quite obvious, our list couldn’t be complete without this one.
By analyzing large amounts of data quickly and accurately, AI is perfect for generating valuable customer insights. It can process customer feedback from reviews, surveys, and social media to identify patterns and trends.
This helps e-commerce businesses understand what their customers want and improve their products or services.
AI-Powered e-Commerce
The AI force in the e-commerce industry is undeniable – and probably unstoppable. If you’re running an online store, chances are you’re already using it in some form or another. To make sure your platform stays on top of the current trends, don’t be afraid to implement some other use cases that we mentioned here!
