{"id":22377,"date":"2023-10-06T17:04:46","date_gmt":"2023-09-22T23:35:00","guid":{"rendered":"https:\/\/www.bloomreach.com\/library\/8-examples-of-ai-in-online-shopping-for-a-better-customer-experience"},"modified":"2024-09-17T10:15:46","modified_gmt":"2024-09-17T10:15:46","slug":"examples-ai-in-online-shopping-better-customer-experience","status":"publish","type":"library","link":"https:\/\/www.bloomreach.com\/en\/blog\/examples-ai-in-online-shopping-better-customer-experience","title":{"rendered":"8 Examples of AI in Online Shopping for a Better Customer Experience"},"content":{"rendered":"

Artificial intelligence (AI) allows retailers to mirror the in-store experience online by answering queries, offering personalized product recommendations, and delivering a tailored service to each customer. Following the COVID-19 pandemic, which decimated the retail sector through prolonged lockdowns, McKinsey<\/u><\/a> published seven imperatives for recovery. Since every imperative can be supported with AI technology, it\u2019s perhaps unsurprising the number of businesses adopting AI has since grown by 270%<\/u><\/a>. <\/p>\n

\"Enterprises<\/p>\n

However, despite the benefits on offer, organizations must be mindful of how they adopt AI<\/u><\/a> technologies to ensure they help, rather than hinder, their success. For example, AI reduces the need for human interaction, but retailers can\u2019t rely on technology for everything. Additionally, retailers shouldn\u2019t lose sight of the fact that AI is only ever as good as the data it\u2019s trained on. If the data is inherently biased, then AI will perpetuate the bias. And despite AI\u2019s ability to deliver highly personalized experiences, only 51%<\/u><\/a> of consumers trust brands to keep their personal data secure and use it responsibly. <\/p>\n

But with all that being said, AI ultimately enables retailers to deliver the perfect omnichannel<\/u><\/a> experience, allowing customers to seamlessly switch from brick-and-mortar shops to online stores and back again. From a business perspective, the intelligence gained through customer interactions across multiple touchpoints will prove invaluable when planning and executing omnichannel marketing<\/u><\/a> strategies, because AI allows the business to continuously learn and adapt in the moment, which drives greater conversions, boosts cart sizes, and builds long-lasting loyalty.<\/p>\n

In this article, we explore how AI can support online shopping and revolutionize the (virtual) high street.<\/p>\n

Online Shopping vs. Ecommerce: What\u2019s the Difference?<\/h2>\n

75% of consumers shop online at least once a month, but while the terms \u201conline shopping\u201d and \u201cecommerce<\/u><\/a>\u201d are used interchangeably, there is a key difference.<\/p>\n

\"Online<\/p>\n

Online shopping<\/strong> involves the direct selling\/purchasing of goods\/services between a retailer and a consumer. In many cases, the online shop is an extension of a brick-and-mortar organization, although it can also serve a specific purpose, such as allowing a school or sports team to sell uniforms or to raise funds for a local charity. As consumers increasingly turn to the internet for shopping, it\u2019s expected that by 2026, nearly a quarter (24%<\/u><\/a>) of all retail purchases will take place online (up from 20.8% today).<\/p>\n

Ecommerce<\/strong> is a platform that is specifically built to operate online. Like a marketplace, it allows multiple retailers to buy and sell online \u2014 the most successful providers being Amazon, Alibaba, and eBay. By 2026, worldwide ecommerce is expected to grow by 56%<\/u><\/a> to reach $8.1 trillion (up from $5.2 trillion today).<\/p>\n

This post focuses on online shopping while highlighting what retailers can learn from the ecommerce giants to improve their operations. Here are eight examples of how AI can improve online shopping.<\/p>\n

Customer-Centric Search Functionality<\/h2>\n

When a website doesn\u2019t offer a personalized experience, nearly three-quarters (74%<\/u><\/a>) of customers feel frustrated, which means they\u2019re more likely to bounce and abandon their carts. <\/p>\n

AI supports retailers by enabling them to personalize search results in real-time, so customers feel understood and valued from their first visit. Ultimately, this leads to a 15-20%<\/u><\/a> greater average order value, as well as an increase in revenue per visitor by up to 8.5%<\/u><\/a>. <\/p>\n

To achieve such a high level of personalization, AI-powered site search<\/u><\/a> uses natural language processing<\/u><\/a>. This analyzes customer queries to understand intent, and combines it with historical data, like past searches and purchases, to narrow and improve results. Additionally, contextual personalization<\/u><\/a> scans external data, such as the current season or trending topics, to make results more relevant. <\/p>\n

\"Example<\/p>\n

Just look at what Jenson USA<\/u><\/a>, a leading online bicycle retailer in the US, was able to achieve. By creating distinct customer segments and then optimizing search results for each segment, the brand saw an impressive 26% increase in revenue per visitor.<\/p>\n

Another big development within site search is computer vision, which allows customers to search based on images so retailers can make recommendations based on style. Ecommerce was quick to adopt computer vision capabilities and offer online features like \u201cshop the look,\u201d which are known to increase the average order size by 20%<\/u><\/a>. Online retailers who follow in their footsteps will futureproof their customer experience, as visual search is used most by adults aged 18-34<\/u><\/a>.<\/p>\n

Voice Search Capabilities<\/h2>\n

The way consumers shop has changed. Over a fifth (22%<\/u><\/a>) of customers prefer talking to an AI voice assistant over typing, and the number of consumers using smart speakers<\/u><\/a> continues to rise year-on-year.  <\/p>\n

AI enables online retailers to continue meeting their customers\u2019 expectations, as well as meet accessibility obligations with ease. Visually impaired customers no longer need to battle with screen readers and \u201caccessible websites\u201d because voice search can give them what they need in seconds. To take advantage, retailers simply need to optimize their website and product listings for voice search in the same way they would for SEO (search engine optimization).<\/p>\n

Personalized Product Recommendations<\/h2>\n

Personalized shopping cart recommendations influence 92%<\/u><\/a> of online shoppers to buy additional products and improve cart abandonment rates by 4.35%<\/u><\/a>. <\/p>\n

A retailer who offers personalized product recommendations<\/u><\/a> shows they recognize each customer as an individual, know their interests, and value their business. AI does this by analyzing vast quantities of customer data, so at the point of purchase it can use effective sales tactics like:<\/p>\n