Among ecommerce businesses, the urge to integrate AI across different aspects of their operations is stronger than ever. And it’s clear why: AI has the power to transform the overall customer experience. Think personalized product recommendations tailored to each shopper, smarter search capabilities that understand the context of conversational queries, and virtual shopping assistants that guide customers through every step of their journey.
AI can also reshape internal operations. What once took hours can now be handled in minutes with AI. AI can help you automate routine tasks, turn customer feedback into actionable insights, and predict demand trends to keep stock levels optimized.
Yet, despite its potential, many people are still unsure or cautious about implementing AI. That’s why, at this year’s Edge Summit, we brought together industry leaders from across the globe to explore how retailers can shape the future of AI in ecommerce.
In case you missed the London and NYC events (or just want a quick refresher), here are our crucial takeaways from The Edge Summit 2024.
1. Use AI as an Accelerator, Not a Replacement
Sure, AI is a groundbreaking technology, but it’s meant to serve as an accelerator rather than a substitute for human skills. Its core purpose is to enhance our abilities, not overshadow them.
For example, setting up an omnichannel marketing campaign manually can take weeks of planning, coordinating, and fine-tuning (4-5 weeks on average, to be exact). However, with Bloomreach’s Loomi AI, you can set it up within a few hours.
Simply provide the essential campaign details (audience, objectives, and messaging), and then Loomi AI will use that information to build an omnichannel marketing campaign for you.
You still need to manually review and tweak it, but the heavy lifting is already done.
Imagine how much time you’ll be saving when you use AI to set up dozens of campaigns during a busy season like Black Friday/Cyber Monday.
In his keynote, Baratunde Thurston, a multi-platform and Emmy-nominated storyteller and producer, highlights that AI’s real strength lies in supporting and enhancing your work rather than doing it for you. With current technology, AI is helpful as a research assistant, editor, or data analyst.
He recalls the time when he used AI to write a column, and the AI provided a quote attributed to James Baldwin. When his editor asked for the source, he couldn’t find the quote anywhere on the internet, which highlights the most common issue with AI — sometimes it fabricates information or misattributes quotes (confidently).
This experience taught him that while AI can speed up the writing process, it’s important to double-check its outputs — highlighting how AI needs (and will continue to require) human oversight.
2. Leverage the Democratization of AI
The future of AI is shaping up similar to the evolution of electricity — it started off as an expensive and exclusive resource but is rapidly becoming more accessible and an everyday essential to many inside and outside of the workplace.
Just as electricity once cost $5-7 per kilowatt-hour and now averages around 13 cents, AI is on a similar path. The cost per token in AI models has already dropped by 240 times since its initial release.
But this is only the beginning. Experts believe we’re at the start of a 20-year cycle of rapid growth and innovation for the technology.
As AI costs continue to decline, the ability to access high-quality AI models with less processing power will open up exciting possibilities for everyone, from small startups to global companies. This shift will empower companies across all industries, especially in ecommerce, to leverage AI’s full potential.
3. Understand the Criteria for Consequential AI
90% of AI innovations don’t make a meaningful impact — only 10% truly matter. But how do we identify what innovations are genuinely consequential?
Raj De Datta, the CEO and co-founder of Bloomreach, suggests that AI initiatives should meet at least two of the following three criteria:
- Move key metrics by at least 10%: AI should drive a noticeable impact on business performance over the medium term. It’s not about minor tweaks but significant improvements that push the business forward.
- Deliver a differentiated customer experience: AI should create a distinct advantage in how customers interact with your brand. It should encourage them to choose your business over competitors also using AI. It’s not just about adopting AI — it’s about standing out because of it.
- Boost team productivity significantly: AI should make a profound impact on productivity — not just minor gains of 2-3% but up to a 2x improvement that reduces operating costs and reshapes how teams work.
For AI to be truly consequential, it must move beyond being a supportive “copilot” and step up as the “pilot.” Let AI take charge of key functions like managing customer interactions.
Take ecommerce customer service as an example. Nearly 22% of people would prefer spending night in a jail over dealing with traditional customer service. By replacing traditional chatbots with advanced AI agents that simulate human expertise, ecommerce businesses can transform the customer experience.
Instead of frustrating back-and-forths or endless ticket routing, these agents can understand the problem, provide immediate solutions, and close tickets efficiently. This approach can lead to faster resolutions, drastically reduce wait times, and improve customer satisfaction scores (CSAT) — all while cutting operational costs.
4. Deliver Personalized Experiences
Imagine you buy a wallet from an online store, but the next day, you return it. A few days later, you receive an SMS saying the wallet is on sale, followed by a product recommendation for a keychain that pairs well with the wallet.
That’s an example of poor personalization —after all, you already returned the wallet. So, the sale notification and product recommendation don’t make sense.
Poor personalization can leave your customers feeling disconnected and frustrated. It can make them question whether you truly understand their needs and wants. And may even make them feel like just another number.
However, this doesn’t mean you should shy away from personalizing customer experiences. In fact, customers crave personalization now more than ever. 80% of shoppers prefer to buy from ecommerce businesses that deliver personalized experiences.
While poor personalization can push them away, the right kind of personalization can do the opposite. In fact, well-executed personalization can deliver up to an 8x ROI on marketing spend.
With advanced AI like Loomi AI, it’s now possible to hyper-personalize the customer experience across every touchpoint. You can deliver more precise search results tailored to each shopper’s affinities in real time, serve the best variant on an individual level at the time most likely to drive conversions, and much more.
5. The 4 C’s and 3 A’s of AI Development
To implement AI ethically yet effectively, you can start by adopting the 4 C’s:
- Consent: Make sure that your customers clearly understand and agree to how their data will be used.0
- Control: Allow customers to manage their data preferences easily. Provide options for users to control what information is shared and how it’s used.
- Compensation: Offer tangible value in exchange for data, like personalized discounts, rewards, or exclusive offers.
- Credit: Be transparent about data sources and contributions. Acknowledge where insights come from, whether it’s user feedback, reviews, or other data, to maintain honesty and integrity in AI-driven recommendations.
From there, you’ll also want to adhere to the 3 A’s of AI development:
- Accelerate: Use AI to speed up processes such as order fulfillment, customer service, and personalized marketing. However, make sure that acceleration doesn’t compromise quality — faster should still mean better.
- Augment: Implement AI to enhance your team’s capabilities, not replace them. AI can support decision making, streamline operations, and empower employees to deliver a better customer experience.
- Accommodate: Design AI solutions that cater to diverse customer needs and preferences.
To dig into how we at Bloomreach approach AI, be sure to read up on our AI development principles.
6. Go Beyond Transactions To Build Relationships
Imagine walking into a physical store and being greeted by someone who genuinely wants to help, not just make a sale. That’s the kind of experience online businesses should strive to replicate — one that’s centered around understanding and serving customer needs.
Don’t just facilitate a purchase. Instead, support the entire shopping journey, from helping customers choose the right product to guiding them on how to use it effectively.
Thurston focuses on the importance of moving beyond “purchase intent” to solve bigger problems, like helping customers minimize the carbon footprint of their purchases or encouraging them to recycle and renew. This approach aligns with the principles of sustainability and the circular economy. And focuses on the long-term value of products rather than just the initial sale.
By leveraging AI, ecommerce businesses can become more than just sellers — they can become partners in their customers’ lives.
Using AI for Impactful Ecommerce
AI adoption has its hurdles, but the real opportunity lies in using it to build stronger connections with customers and drive real impact.
The key is not just implementing AI for the sake of the technology itself but applying it thoughtfully to solve real problems, enhance customer engagement, and deliver measurable results. This, in turn, will allow businesses to go beyond mere automation to create personalized and meaningful experiences that resonate with shoppers.
To learn more about how we’re leading the charge of this major technological transformation, be sure to join us on October 15th for our AI feature showcase following The Edge Summit. See live demos, hear from brands already reaping the benefits of artificial intelligence, and catch a glimpse of what’s ahead for our industry. Register today!
