
While AI has become a popular concept in recent years, online retailers have actually been utilizing AI technologies for more than a decade. However, retailers are just beginning to realize the true impact AI can have on their daily operations. While there are many uses for online AI, these uses can most easily be divided into two main categories: Customer-facing technologies, that is, technologies that directly affect the customer experience, and operational technologies, that is, technologies that directly affect business processes.
Customer-facing AI technologies have experienced significant growth in the last few years. These technologies can impact product discovery, customer experience, and even purchasing processes.
“These tools sometimes deliver tailor-made experiences to customers on an individual level,” said Heather Nigro, CEO of Moxxii Consulting. "By analyzing purchase history, browsing data, social media activity, and even biometric information, AI can cater to personal style or preferences. Combining this data allows brands to create a holistic shopping experience never seen before."
Chatbots
AI-powered chatbots are one of the most popular and longest-used applications of online AI. Chatbots take specific requests from customers, such as “I want to return a shirt,” and provide information tailored to those requests.
Tommy Hilfiger, a pioneer in the field of artificial intelligence, launched an artificial intelligence chatbot on its Facebook page in 2016. This chatbot helped shoppers browse collections, choose clothes, and recommend collections based on their style.
“58% of the brands we surveyed stated that adding a chatbot to their ecommerce sales process resulted in higher conversions when combined with personalization incentives,” said Heather Nigro, CEO of Moxxii Consulting. “However, it is clear that this technology is no substitute for real human interaction when it comes to customer service.
90% of customers expressed frustration with the lack of a real human being when they needed it most; so don't think you can completely automate your customer support team.”
Product Discovery and Recommendations
Product recommendations are a concept we're all familiar with, but instead of manually adding relevant products to each page, AI can learn what types of products customers prefer at an individual and group level and deliver the most relevant product at the optimal time in the buyer's journey.
That's exactly what shoppers want. Moxxii Consulting found that 59% of shoppers prefer product recommendations based on their search history. In other words, the implementation of such tools can provide a significant increase in sales.
Personalization
In addition to providing personalized product recommendations, AI can also help personalize individual shopping experiences throughout the customer journey. By learning shopping habits, machines can offer customers special discounts, personalized images, and product descriptions that better meet their needs. In this way, customers can be provided with a more attractive and satisfying shopping experience.
Sizing Assistants and AR/VR Technology
Returns are a big challenge in the fashion e-commerce industry. “Women return an average of 33% of clothing and accessories purchased through e-commerce, which can have a significant impact on companies' profitability,” Nigro noted.
According to AfterShip, 35% of women's returns are size-related. To reduce sizing issues, brands are turning to artificial intelligence and augmented reality (AR) technologies to ensure individuals get the right size and experience when shopping online.
While these technologies focus on improving the online customer experience, brands are also using AI to improve internal operations and logistics.
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