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How AI Can Have an Instant Impact on E-commerce This Festive Season

As the holiday shopping season approaches, online retailers are grappling with supply chain issues and product delivery, with AI implementation as a potential solution.

Table of Contents

Introduction

1. Benefits of AI in E-commerce

1.1. Personalized Shopping Experiences

1.2. Reduced Operational Costs

1.3. Increased Sales Opportunities

2. Four Strategies of AI in E-commerce

2.1. Customer Support Bots

2.2. Product Recommendations and Fit

2.3. Content Creation and Advertising

2.4. Detect Suspicious Return Activity

Final Thoughts

Introduction

For shoppers, this is the perfect time to celebrate the holiday season, and for the e-commerce sector, it is an ideal time to get many reviews. However, during this time of the year, E-commerce stores face problems with understaffed teams, supply chain woes, and changing customer behaviors, which, when combined, create the storm of the century.

As consumer behavior and preferences change every season, e-commerce merchants continuously seek innovative strategies to engage and satisfy their customers. With the help of artificial intelligence (AI), with its automation capabilities and data-driven insights, it can upscale this landscape and generate a higher conversion rate.

In this article, we will find out more about how e-commerce merchants can use AI to benefit themselves during this festive season.

1. Benefits of AI in E-commerce  

The benefits of artificial intelligence are immense, as it helps e-commerce companies provide personalized experiences to their target audience and enhance day-to-day operations effectively. Let’s explore each advantage carefully:

1.1. Personalized Shopping Experiences

AI can analyze your user’s behavior to provide more personalized recommendations to help customers discover products that align with their festive needs and preferences. It can also optimize target advertising campaigns, enabling retailers to customize their marketing efforts, resulting in a seamless and individual shopping experience for customers.

1.2. Reduced Operational Costs

Implementing AI in e-commerce allows your business to reduce costs through automation of tasks, which diminishes the need for manual labor. AI enables you to manage your inventory and automate customer interaction, leading to savings in operational costs, empowering businesses, and getting a clear picture of the marketing challenges.

1.3. Increased Sales Opportunities

AI in e-commerce aids in forecasting emerging market demand during the festive season, enabling online retailers to strategically introduce and position their products and estimate opportunities for cross-selling and upselling. This means your business can unlock new sales channels for efficient sales processes and broaden its market presence.

2. Four Strategies of AI in E-commerce

2.1. Customer Support Bots

Human interaction is a brownie point in customer support operations; however, consumers are turning towards AI-driven chatbots to cut down on the time spent waiting for support.

For example, H&M’s Kik bot displays pictures of clothes and asks its users to pick one. In the next step, the bot tries to understand the user’s fashion genre, such as preppy, classic, boho, casual, or grunge. The chatbot further asks users about their style-related questions to build a profile for each user.

2.2. Product Recommendations and Fit

Generative AI technology can help you analyze your customers’ previous purchases and browsing data to recommend relevant products by creating customer-centric and personalized recommendations that boost customers’ confidence and trust in buying your products.

For instance, Stitch Fix is a fashion company that went the extra mile with its e-commerce site to provide customized product recommendations for its customers. The customers have to answer a series of questions that help Stitch Fix understand style better. The questions include information about the customer’s styles, body types, and preferences so that the company can create a unique and tailored shopping experience for each individual.

2.3. Content Creation and Advertising

Earlier, online retailers used to rely on traditional marketing strategies and a team of copywriters to produce compelling content and create digital campaigns. However, in the past few years, these online retailers have harnessed the power of AI tools to get their work done during holiday seasons. From creating social copies to product descriptions, AI can help generate content with a few clicks and instructions, which can help optimize campaign performance.

Let’s take the example of Shopify store owners using Plumy.

Shopify store owners use Plumy, an AI app that has more than 14 AI tools that enable users to create unique and SEO-optimized content within a few clicks. Even Google recently rolled out an AI-powered advertising solution that helps online retailers optimize their digital advertising campaigns.

2.4. Detect Suspicious Return Activity

With the holiday season kicked off, you might find customers returning their products. However, online retailers need to be extra cautious when monitoring return activity to make sure that customers are not taking advantage of your brand.

Retailers can take advantage of AI algorithms to detect dubious return activities like false order claims or serial returns. For example, AI tools can help identify serial returners and issue warnings that they will not be able to return products within a definite time frame.

Final Thoughts

The Black Friday and Cyber Monday retail scene is a huge change, as online retailers have to make sure to adjust their operations as consumer behaviors and expectations evolve rapidly. So, to stay in the game of profitable e-commerce shops, they have to rely on artificial intelligence (AI) to improve efficiency, cut extra costs, and balance operations through automation and less human interaction.

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