Enhanced shopping experience with AI customization

1 year ago

Artificial Intelligence, a boon for eCommerce

Eileen Ooi Wei Ling, Managing Director, PHD Malaysia

Artificial Intelligence (AI) has been picking up speed in the online retail space of late helping to deliver a more personal experience for shoppers online.

However currently AI is now being deployed to other areas of eCommerce such as content creation, search innovation and targeting consumers with a likelihood to purchase.

Companies such as Alibaba and WeChat have driven major innovation with chatbots, integrating payment methods and resolving customer service issues at a mass scale, while Pinterest and Snapchat are using AI to power innovations in visual search.

AI allows retailers to take into consideration consumer’s key data such as name, gender, age, location, preference and respond to customer needs instantly.

This means a much more personalized experience for consumers without the need to filter through millions of online products and options.

Retailers that have implemented personalization strategies see sales gains of 6-10%, a rate two to three times faster than other retailers, according to a report by Boston Consulting Group (BCG).

One such example is outdoor wear company, The North Face, who partnered with IBM to create a more personalized shopping experience by incorporating AI into its online shopping app.

IBM’s Watson creates a psychoanalytic profile of customer data in less than a second, followed by questions about where, when, and for what activities customers will be using their apparel.

Next, the AI provides personalized suggestions ranked from “High Match” to “Low Match,”.

This creates a much more optimized experience for shoppers who do not have to scroll through thousands of items to find the right one.

Another example of a retailer creating a curated shopping experience powered by AI is Lazada in Malaysia.
Lazada Malaysia CEO, Hans-Peter Ressel, revealed that the company is working on a brand new Lazada app, driven by artificial intelligence (AI).

According to Ressel, the new app has been revamped to provide a highly personalized browsing experience for each individual user.

There will be less emphasis on product categories, and instead the app’s machine- learning algorithms will show off more products that the individual is interested in based on purchase and viewing history.

AI and Conversational Commerce

Another form of AI that is currently seeing a fast adoption rate is the use of “chatbots”.

eRetailers have integrated messaging apps such as Facebook messenger, WeChat and WhatsApp to allow customers to have a conversation with AI Robots.

Through this automated conversation, consumers can receive personalized recommendations on shopping items and resolve delivery related issues in real time, without the need for human intervention.

Notably, Alibaba’s AI-powered customer service robot handled 95% of customer service inquiries during Singles Day 2017, which is the largest shopping day of the year.

Furthermore, retailers are now integrating payment functionality within their chat apps to ensure seamless shopping experience.

According to a recent BI Intelligence report, more than 200 million users in China have added payment information into WeChat, a popular messaging application, and WeChat’s parent company now holds 37% market share of the Chinese mobile payment market.

Subway and MasterCard also partnered together to allow customers to purchase Subway food ahead of time.
Using Facebook Messenger, the bot allows customers to choose nearby Subway locations and customize a sandwich, which allows employees to focus more on serving in-store customers with less distractions.

AI and eCommerce Content

Creating relevant content for thousands of products requires time and budget from businesses.

AI is now helping resolve this by automating the content creation process.

Alibaba recently unveiled an AI tool that can produce up to 20,000 lines of content a second. This allows merchants on Tmall and Taobao to generate product information without the need for human intervention.

According to Alibaba, the copywriting tool analyses “millions of existing samples” on Alibaba’s online platforms and uses deep learning models and natural language processing technologies to produce content.

Alimama’s General Manager Christina Lu noted that the AI system was not able to replace human’s ability to be creative and, instead, would enable people to focus more energy on “richly creative work”.

It could, for instance, replace repetitive, low-value work involved in copywriting.

This is extremely important, as it will allow brands to focus on providing a richer brand experience for consumers online and focus on more enhanced eCommerce content such as videos and infographics.

AI and Visual Searches

AI is also helping pave the way for new and exciting innovations in online shopping such as visual search, which is fast becoming a key staple in eCommerce.

Last month a TechCrunch article suggested that Snapchat was building a visual product search feature, that delivers users to Amazon listings.

Pinterest has also used AI to create searchable images where users can tap just one part of an image to find product information.

Target leveraged this Pinterest feature and partnered with the social media platform to substitute keyword search for image search in its app, so instead of typing “waffle maker,” users can just upload a photo and let AI technology search the company’s inventory for a perfect match.

Recent studies show that social media platforms are responsible for 3.2 billion daily visual shares, and customers want to shop what they are sharing.

Visual search is still in its early stages, but AI technology is merging the online and offline shopping experience.

The power of AI to reach shoppers

One of the key challenges for eCommerce businesses is understanding where users are on their path to purchase and understanding a consumer’s propensity to purchase.

AI is now being used to identify consumers who are more likely to purchase products and those consumers with a higher value.

E-commerce fashion site Zalora has deployed an AI-powered Growth Management Platform (GMP) for customer acquisition.

Leveraging real-time predictive segmentation powered by deep Artificial Intelligence and Machine Learning capabilities, the tool allows marketers to deliver personalized journeys across web, mobile web, mobile apps and ad channels.

A Predictive Ad Audiences tool was also used to allow marketers to target AI-powered predictive segments in ad channels like Facebook and AdWords.

A “Likelihood to Purchase” algorithm then segments visitors who are more likely to make a purchase in the next seven days. By only targeting this segment, brands can make smarter investments and increase ad spend efficiency and, in turn, return on ad spend (ROAS).

Conclusion

Artificial Intelligence will play a major role in the future of marketing and eCommerce as highlighted in PHD’s publication “Merge”.

The publication outlines that the introduction of machine learning leads to dramatic improvements in the extraction of information – from advanced operating systems and the semantic web through to virtual assistants.

AI will undoubtedly have a positive impact on businesses and consumers in eCommerce.

Businesses will be able to save time, costs and manpower by deploying AI to deal with mass tasks such as content creation and customer service support, while consumers will receive a much more personalized shopping experience, powered by innovations such as visual search and conversational commerce.

How can brands leverage AI?

1. Optimize Product Content
As AI will play a major role in customizing the shopper experience to ensure that consumers are served items relevant to them, having optimized product content with high resolution images and relevant keywords will ensure increased product visibility and conversions to a more targeted audience.

2. Chatbots for Direct to Consumer sites
If your brand owns a Direct-to-Consumer eCommerce site, integrating messaging apps such as Facebook messenger and WeChat is essential. This will help in building your personalized on-site shopping experience and is also an efficient customer service solution.

3. Explore new AI technology
Artificial intelligence is the future of digital marketing and eCommerce. Looking out for technology partners who can provide solutions such as automated product content creation and “Likelihood to Purchase” algorithms, can help your business drive higher efficiencies.


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