Today, customer understanding is no longer just an added advantage, but rather a critical competency, especially in light of the emergence of data. As far as eCommerce is concerned, especially in the face of overwhelming competition, data is of utmost importance in moving units and increasing growth. This is where the future of search marketing, and indeed, the future of eCommerce itself, lies in harnessing the power of Artificial Intelligence (AI).
This is where Artificial Intelligence (AI) applies, creating a unique option for e-commerce businesses to understand customers and convert pure data into strategies deeply. AI-assisted online retail is the way of the future as it brings transformation in the engagement of customers through the help of patterns, tendencies, and emotional quests.
- 61% of marketers consider artificial intelligence the most critical element of their data strategy. (Source: MeMSQL)
- 85% of business executives believe AI will give them a competitive advantage. (Source: PwC)
- By 2030, AI is expected to add as much as $15.7 trillion to the global economy. (Source: PwC)
These statistics indicate very clearly: that AI is not a vision of the future, it is already here, it is changing the world and eCommerce is no exception. Businesses shift their strategy and target prospective customers by applying novel artificial intelligence customer insights.
This article explores how AI can reveal invaluable customer insights and outlines actionable strategies to improve your eCommerce sales.
How AI Works for Customer Insights
AI analyses these data sets to establish relationships among variables such as a person’s age, what they custodial over, what they bought, where they spent time online, and others to make viable forecasts. This enables companies to know:
- Customer Segmentation: Dividing buyers into several groups having common features and finding appropriate corresponding marketing campaigns for each of them.
- Personalized Recommendations: Generate strategic proposals that best suit a particular customer’s profile as well as their past purchases.
- Predictive Analytics: Make proactive assessments of performance and avoid customer needs, as well as make such conditions wherein clients can be lost.
- Price Optimization: Analyze variations in demand, competition, and buyer behavior about different products to arrive at the best prices available.
7 Ways AI-Driven Customer Insights Can Grow Your Ecommerce Sales
1. Hyper-Personalized Product Recommendations
Those days, when one suggestion fits all, are over. With AI, data spanning across customers is analyzed efficiently to suggest products that customers are very willing to purchase to improve productivity in terms of conversion and click rates.
Example: The perfect illustration of AI at work is the recommendation engine that is employed by Amazon where a customer’s previous purchases and search patterns are actively analyzed to promote certain products.
2. Targeted Marketing Campaigns that Resonate
Understanding customer interests and behaviors helps in customer segmentation and this has been made easier through the use of AI. As a result, businesses have become capable of addressing specific segments with messages and offers that drive higher engagement and conversions.
Example: For instance, an online shop for sports apparel can use AI to find customers who buy start-athleisure repeatedly, and send them emails about new arrivals in this category.
3. Optimized Pricing Strategies for Maximum Profitability
AI techniques assess competitors’ prices, customer demand variations, and how customers engage with the products, enabling price setting for products that generate the most profit without losing a competitive edge.
Example: In the airline industry, the use of AI-supervised pricing over tickets enables the levying of rationalized ticket charges depending on season and customer traffic.
4. Improved Customer Service and Chatbot Interactions
Ai chatbots can attend to customers’ inquiries, help with concerns, provide solutions and perform recommendations at any time of the day or night. This improves customer experience and helps human agents to attend to more valuable questions.
Example: A telecom company employs the assistance of an AI chatbot to guide clients through solutions to any internet connectivity problems assisting the customers with customized provides.
5. Inventory Management and Demand Forecasting
AI techniques use past sales records, seasonal patterns, and other environmental conditions to forecast future sales which helps them control stock levels, avoid lost sales opportunities, and even decrease product obsolescence.
Example: A chain of grocery stores makes the effort of street level demand forecasting on their seasonal products assisted with AI tools to have enough supply during peak seasons and reduce excess supply on off-peak seasons.
6. Fraud Detection and Prevention
AI techniques can scan transactions and determine whether fraud is being perpetrated by looking for transactions that are out of the ordinary and raising alarms.
Example: An organization has leveraged the potential of AI in taking charge of credit card fraud occurrences by processing the transaction history and identifying unusual spending behavior.
7. Enhanced Website Design and User Experience
The mechanism through which AI technology improves user orientation skills rather involves the examination of the content on the company’s website and suggesting which parts can be enhanced. This may include improving the positions of various sections of the website, enhancing the relevance of the information provided, or making the purchasing stages less time-consuming and easier.
Example: An eCommerce website development service implements AI machine learning techniques to assist in checkouts through heat map analytics, registering areas where users stop using a cart. Optimum efficiently targeted processes can then be incorporated within the checkout procedure making it more enticing.
How to Implement Artificial Intelligence Into E-commerce
- Start with Data Collection: Make sure the customer information you are gathering is useful, with such examples as sex, age, lifecycle history, purchases made, and actions taken on the site and other marketing activities.
- Identify Your Pain Points: Find out the aspects of your business where AI will bring the most benefits. Which area is giving you issues, is it reduction of the shopping cart abandonment rates, personalization or perhaps reviewing stock?
- Choose the Right AI Tools: Explore the various AI-powered tools and platforms available, considering your specific needs, budget, and technical expertise. Some popular options include:
- Recommendation engines: Recombee, Clerk.io, Nosto
- Chatbots: Dialogflow, ManyChat, Chatfuel
- Marketing automation: Albert.ai, Persado, Phrasee
- Analytics and insights: Google Analytics, Adobe Analytics, Mixpanel
- Start with Baby steps and Evolve: Execute AI in one or two portions of the business diagnostically and increase as you become more competent and positive results emerge.
- Don’t Forget the Human Touch: Even though AI can assist in performing all tasks and can provide useful information, there is still a need to incorporate human aspects into customer service so that AI does not take over every activity.
Real-World Examples of AI in E-commerce
Beyond giants like Amazon and Netflix, countless businesses are using AI for e-commerce success:
- Stitch Fix: An online personal styling service company that harnesses the power of AI to predict customer style Identifies women’s ideal fit clothing assortments, thus increasing customer retention.
- Sephora: As a beauty retailer, Sephora offers AI-enhanced chat solutions for women and makeup enthusiasts that help them consult beauty experts, search for beauty products, or get makeup teaching.
- The North Face: An outdoor apparel company that features an intelligent computer application that enables customers to choose a jacket according to their preferences of the weather, activity, and style.
The Future of Search Marketing: AI Integration is Key
As the advancement of technology leads to more complex developments of search engines, it is becoming imperative to infuse AI within your SEO strategy. Professional SEO services are already leveraging AI for keyword research, content optimization, and competitor analysis. Focusing on emerging technologies can place your business one step ahead, driving growth and optimizing your online presence.
AI: The Future of eCommerce Growth
AI is revolutionizing how eCommerce businesses understand and interact with their customers. In this age of eCommerce where everything is governed by data, the act of enhancing one’s business using AI is not an option but a pre-requisite.
Ready to take advantage of the power of AI but feeling overwhelmed? Icecube Digital can help! Our team of eCommerce and AI specialists can help you develop a data-driven strategy to unlock valuable customer insights and optimize your online store for increased sales and growth. Contact us today for a free consultation.
