Your guide to AI in e-commerce in 2023
AI will revolutionise the retail industry – don’t be left behind.
So, by now you may have heard of Artificial Intelligence, or AI for short. This year has seen a massive boom in its adoption - in no small part due to the release of popular generative AI chatbots, such as Chat GPT. Naturally, conversations have exploded around the impact that AI will have on all industries and retail is no different. Just as there was the time before the internet, will there be a clear demarcation of how things used to be before AI?
The answer to that question will undoubtedly be resolved in the coming years, but for now AI poses a great opportunity for retail - you may just not know it yet. With that said, let this be your 2023 guide to using AI in retail.
Why just 2023 you ask? Well, just as no one (apart from David Bowie in 1999 somehow) could truly predict the impact the internet would have on the world, it is hard to say with any conviction what AI will turn into over the coming years. What is true to say in the first half of 2023, may not even be the case by the end of the year - let alone in five years' time.
The Covid-19 pandemic forced consumers online but those opportunities also provided big challenges for retail brands. From a general increase in demand to handling complaints and returns, many brands are beginning to use AI in various capacities to gain a deeper understanding of their customers and to continue delivering great products and services as their online businesses grow.
Before we look in more depth at how different AI tools can be used for retail professionals, I thought we'd ask the very popular chatbot Chat GPT how it can support e-commerce operations. Here is what Chat GPT had to say:
It is interesting to note that Chat GPT can only use data up to 2021, which will bring into question the insights that it derives from that data. So, while this is a great starting point, it is worth exploring other AI platforms and where further support can be found for marketing and e-commerce professionals.
In general, AI devices will become smarter the more data they have to use. The more they interact with customers and understand their preferences, purchase history and previous interactions, the better they will perform. Far from being limited to using this information to predict shopping patterns and sending out personalised emails to consumers - when done correctly, AI tools can use data to greatly enrich your retail brand’s operations. With help from Big Commerce and Luigi’s Box, below are some of the ways AI can transform your retail operations.
Customer service chatbots
Most will be familiar with this use of AI, and many retail brands have already implemented the technology - customer service chatbots. Timely responses are essential for customer satisfaction, with 90% of customers expecting a response in under 10 minutes. To ease the burden this will undoubtedly place on customer support teams, who are always busy dealing with customer requests, complaints, returns and exchanges, AI chatbots can answer simple questions and perform easier support tasks.
AI-powered chatbots can act as a filter for customer support, meaning that support teams' time is freed up to take on the tougher, more complex queries and support functions which provides a greater experience for all customers.
Dynamic pricing
The research involved with turning data on demand levels, competitor pricing and manufacturing costs into an optimal price for a product/service takes - time. With AI, all of this can be done automatically and prices can be constantly updated based on ever-changing data.
Prices can always remain optimised. Is competitor stock low? AI can increase prices. Is your competitor having a sale? AI will automatically lower your prices. Even better, the percentage increase and decrease of prices can also be optimised depending on sales forecasting to maximise profitability. If it has access to accurate big data, it will do it.
Amazon is already taking advantage of AI in this way by adjusting its prices up to 20% depending on competitor pricing.
Customer segmentation
Delivering tailored marketing campaigns is essential for any successful retail brand. It is no longer a way to just persuade customers to keep buying from you - customers now expect to have their shopping experience personalised by brands.
Segmentation is key in this effort, and with AI it can be done with more speed, accuracy and depth. By analysing the data given to it, AI tools can create customer segments based on similarities it finds in that customer data. The nature of AI also means it will leave no stone unturned when it analyses that data, meaning that it can create new customer segments by highlighting things about your audience that teams may miss if assessing data manually.
Enhanced automation
This may seem like an uninspiring application of AI because automation has been around for some years now. The new heights that automation will be able to reach with the integration of AI tools is anything but uninspiring, however.
From scheduling emails in a CRM and using solutions like Zapier to automate tasks when hiring, to automating product recommendations, providing low-level support and sending out discounts - AI will greatly advance the automation capabilities that will be at your disposal.
The future of logistics
A recent report from Emerging Tech Brew speaks of AI's ability to predict things like transit times, demand levels and shipment delays. By using real-time data, combined with technology such as sensors and RFID tags machine learning can expertly manage inventory and predict demand. Even better, AI and machine learning tools in this capacity can become smarter over time, meaning their logistics management capabilities will only become more advanced over time.
Conclusion
I am not David Bowie in 1999, expertly setting out the impact the internet will have on the world. I’m sure time will only tell how the guide above will pale in comparison with the eventual evolution that AI will bring to the industry. The above applications are, however, what can be done today, in 2023, by you, to greatly evolve your retail operations. From saving time and energy to providing greater insight and maximising revenue, various AI tools are out there for you to begin implementing……now.
Are you interested in learning more? Join some of the leading retail companies in the Nordics and get more insights on how they are implementing AI tools to grow their business. Sign up here.
