How Ecommerce is Using Artificial Intelligence to Improve Performance

It used to be enough for ecommerce businesses to have a brilliant team, fantastic products and an outstanding service to guarantee success. In recent years, however, cutting-edge technology is an essential element to ensure your business stands apart from the crowd.

Online retailers in particular need to be at the very forefront of innovation, and as such we are seeing artificial intelligence taken to the next level, being used in new and revolutionary ways to enhance the customer journey. Here we take a look at which businesses have run with the AI phenomenon, using it to boost performance and improve customer loyalty.

High Quality Personalised Recommendations

Thread, the London based menswear ecommerce startup, have been using AI so successfully to dress their 1 million customers, that they’ve recently secured $22 million in Series B funding, $3 million of which came from H&M. Specialising in using AI to provide customers with personalised styling and product recommendations, Thread can also boast that 25% of their customers use them exclusively.  
The idea of personalised shopping has been around for quite some time, but now businesses such as Thread are using AI to take the concept to a whole new level.

Instead of a person building a customer profile based on some basic questions and previous purchases, AI uses big data in order to predict what products the customer will be interested in and when they are most likely to buy.

A customer’s shopping history is used in combination with lots of other information including what else they have viewed or purchased anywhere online and the social media posts they have engaged with. Self-learning algorithms process the data, before providing insights into the behaviour of the customer and then offering them recommendations.

Starbucks are also among the companies investing heavily in AI and personal recommendations, as is The North Face who have partnered with IBM Watson to develop a digital brand expert.

Cognitive Chatbots

Chatbots are commonplace on ecommerce websites, but many still operate in a relatively basic, sometimes frustrating fashion – but this is all about to change! AI is enhancing chatbot technology to the point where customers are unable to differentiate between talking to a bot and talking to a human – at least in terms of expediency and satisfaction. 

The recent demonstration of Google’s new AI voice technology, Duplex, is indicative of just how far chatbots, virtual assistants and voice recognition have come.  

Chatbots can already help customers to find and compare products, check if they are in stock and even help take a payment. As AI develops this service will become more sophisticated and the chatbots will link up with other AI applications, instantaneously cross-referencing a mine of information to offer a more comprehensive customer service.

Improved Prospect Targeting 

AI can also help ecommerce businesses to improve their prospect targeting. The process of using predictive analytics is one where algorithms are used to score sales leads by comparing new data with that from an existing best-value customer. Leads that have the best match can then be prioritised as highly qualified opportunities.

Companies such as RedEye provide predictive capabilities that can identify prospects who are “teetering on the brink of their first purchase”. Footasylum are among the companies that have found success from using this model.

“Looking at the ‘high propensity to convert’ segment, Footasylum saw a 27.5% increase in conversion rate, when comparing the segment that received the dedicated campaign against the control cell. This showcased that with more customer information and the right messaging the marketer was empowered and able to deliver far more relevant communications to individual prospects.” RedEye website

Opportunities for Integrating AI

The opportunities for integrating AI into ecommerce are seemingly endless and there’s scope for it to be used at all stages of an operation, from supply chain to checkout. It will, of course, still require a talented team of staff to implement the technology and to continue with the work that calls for the human touch.

However, there is no doubting the fact that in ecommerce, AI is a game changer and those businesses that aren’t adopting the technology ignore it at their peril.