14th January 2020

Artificial Intelligence is changing the face of e-Commerce

Artificial Intelligence is changing the face of e-Commerce

Magento users should be aware of several significant trends that are changing the face of eCommerce. AI is personalizing eCommerce and making operations more efficient; augmented reality, which offers a means to reach Gen Z consumers; a news technique for Google AdWord users; and, minimalist design trends for mobiles.

Artificial Intelligence (AI) provides personalization

Consumers are actively seeking a personalized offer when they shop, and AI enables eCommerce retailers to provide a granular personalised offer.

The vast majority of consumers go online first to nail down what they are looking for, then, if they wish, head out to brick-and-mortar shops, according to a report by the Boston Consulting Group. Artificial Intelligence enables these consumers to do these searches using images or everyday language and allows eCommerce sites to locate and respond to these searches. Still, AI can also find consumers via their background and personal preferences even before they search.

Best-in-class retailers also use AI to create an arsenal of personalization tactics, including personalized merchandising and loyalty and reward programs:

“Also, these retailers deploy more sophisticated personalization capabilities by building infrastructure that unlocks value. For instance, such infrastructure enables companies to implement AI-based predictive algorithms (which help retailers make personalized product recommendations and offers) and to access integrated customer data in real-time (which helps them develop deep insights into customer behaviour and respond quickly),” BCG points out.

But there are more benefits possible with AI applications including more accurate and real-time forecasting. When good forecasts take place it will improve productivity by helping with the supply management, the definition of thematic promotions, and also the optimisation of assortment and pricing. “AI will enable retailers to increase both the number of customers and the average amount they spend by creating personal and convenient shopping experiences,” explains McKinsey in a recent report.

Augmented Reality – reaching Gen Z

All eCommerce merchants are seeking ways to reach Gen Z, those born between 1995 and 2010, and which today accounts for 40 per cent of all consumers and $44 billion in spending annually. Augmented Reality provides a playful and highly focused experience for consumers, one with a fun appeal for young people that is a faster route to conversions.

“AR has turned into a medium for not only allowing people to contextually visualize what an item looks like but also to confirm fit and size. It is already in generalized use in the home improvement industry, fashion, eyewear and there are many other opportunities for many industries,” writes Peter Sheldon, director of Strategy at Adobe.

Some examples of augmented reality include:

  • Virtual try-on: A scanning app uses a combination of computer vision, data science, machine learning, artificial intelligence and recommendation algorithms to enable a consumer to buy a shirt, or spectacles, or sneakers online at the right size.
  • Virtual skin analyser: These apps use an AI algorithm which accesses data provided by scores of dermatologists to suggest what kind of skin cream or other cosmetics would work best for the consumer. Olay got 2x conversions with 5-7000 viewers per day using a virtual skin analyser.
  • AR mirror: A kind of specular interface that uses RFID and augmented reality technology. The user views an image of, for example, a dress onto which an image of the consumer is imposed, in effect allowing the consumer to ‘try on’ the dress.
  • Facebook has its own Spark Augmented Reality engine: It is available to advertisers for effects and video polls. The engine includes templates, a new feature that helps jumpstart the creation of widespread AR effects, as well as actions, which provide time-saving shortcuts for simple, repetitive steps in the AR creation process, as well as tracking applications that can be linked to ads or polls

Google AdWords starts Affinity audiences

An affinity audience is a group of consumers who have all demonstrated an interest in (or affinity for) a particular topic. On the back end, Google can create these audiences by looking at factors like search history and frequently visited web pages thanks to the power of Artificial Intelligence and behavioural data.

“By layering affinity audiences on top of your keywords, you’ll be able to refine your search campaigns and focus on the prospects who are genuinely interested in what you’re selling. Traditionally, you’d reach relevant consumers by targeting keywords. Going forward, you’ll be able to increase ROI by layering affinity audiences on top of those keywords,” according to Wordstream.

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