AI Is Changing the Face of Online Shopping
Wed, April 21, 2021

AI Is Changing the Face of Online Shopping

A 2019 survey conducted by Marist College and National Public Radio (NPR) reported that more than 76 percent of all American adults shop online / Photo by: Ivan Kruk via 123RF


In the past, retail businesses have been satisfied setting up a website for their brand just to keep an online presence as they rely on their brick-and-mortar stores for revenue. But in this technology-driven era, this traditional setup is not enough anymore. Businesses have to evolve along with new emerging technologies to keep up with the increasing market demand. Today, the e-commerce industry has already embraced artificial intelligence due to the exceptional benefits it offers. 

While brick-and-mortar purchases still make up a majority of consumer spending, online shopping is steadily on the rise., an online site that’s focused on the building blocks that people need in the process—a combination of tools, process, and of course shared experience, mentioned that e-commerce comprised more than 13 percent of all retail revenue in 2019 sofar. It was reported that the leading online retailer is Amazon with a net revenue of $232.88 billion in 2018 alone. 

A 2019 survey conducted by Marist College and National Public Radio (NPR) reported that more than 76 percent of all American adults shop online. It was shown that 25 percent of the respondents shop online for at least once a month while 16 percent shop online at least once a week. One of the biggest influences of online shopping is social media. About 87 percent of all online shoppers believe that social media plays an integral role in their shopping decisions.

Now, many retail businesses are implementing AI to improve various processes, customer experience, and revenue—and for the right reasons. As John Bates, a product manager with Adobe Marketing Cloud, said: “For retail companies that want to compete and differentiate their sales from competitors, retail is a hotbed of analytics and machine learning.”

How AI Can Help Online Retailers

The rapid adoption of AI is felt in almost all industries across the world. Of all these sectors, retail is particularly suitable for several reasons. For instance, retail businesses can integrate AI to test and measure consumer response. They can also directly measure the impacts quickly. 

AI can work with a relatively small chance of mistake. Such accuracy is now inherent in AI technology that’s used for crucial tasks such as landing a passenger aircraft where a mistake can cost the lives of a lot of people. Thus, when applied to retail businesses, the same AI can make millions of decisions every day with little chance of making a mistake. 

TechRepublic, an online trade publication and social community for IT professionals, reported that AI can help retailers in personalizing engagement, offering the best actions, and guiding product and service development. Machine learning, an AI application that provides systems the ability to automatically learn and improve from experience without being explicitly programmed, helps retailers understand their customers and predict future behaviors. 

"We want to be more convenient in the way that we shop and want to be; we want more convenience, and we want to shop across multiple channels. We know, as consumers ourselves, that we are constantly changing our habits and therefore what machine learning and AI is doing in this space,” said Brian Solis, principal analyst at Altimeter.

AI can predict customer demand to help retail businesses to understand what people need / Photo by: marctran via 123RF


Also, AI can predict customer demand to help retail businesses to understand what people need. This helps the companies in several ways such as increasing accuracy and operational efficiency as well as saving both time and money for the organization. Winsor stated that technology plays an important role in learning from the past and predicting what that quantity needs to be in the future. 

"Operational efficiency is absolutely key because we're talking about an industry that is operating its business on very low operating margins,” he added. 

According to Time, an American weekly news magazine and news website published in New York City, online retailers are also adopting deep learning to help shoppers more easily find what they seek. For instance, Gilt, an online shopping and lifestyle website, has been using deep learning to search for similar items of clothing with different features like a longer sleeve or a different cut. Etsy, an e-commerce website focused on handmade or vintage items and craft supplies, has acquired Blackbird Technologies to apply its image-recognition and natural-language processing to its search function.

How AI Is Personalizing Online Shopping

Online shopping offers a seemingly infinite array of choices that leaves shoppers overwhelmed. Some have been less satisfied with their orders that made them more hesitant to make buying decisions. Thus, personalizing the user experience would greatly help in all retail businesses. 

Verdict Retail, an online site that offers news and in-depth analysis of the biggest stories on the high street, in multichannel sales, clothing and footwear, and supermarkets, reported that online shops have learned to tailor everything. This includes searching for products and auto-suggestions, tailoring offers for each customer, and personalizing navigation and categories in the content of their websites. Today, online retailers are slowly introducing AI-based hyper-personalization experiences to learn and follow consumer shopping trends.

Hyper-personalization, a marketing tactic that uses AI to combine real-time behavioral data with unstructured data, is the solution to customers’ growing expectations of personalized experiences, with products and services tailored to their individual preferences. Its main role is giving the customers better service and providing them what they need. 

Raj Badarinath, marketing and ecosystems VP at US-based omnichannel personalization platform RichRelevance, said, “In effect, it creates a ‘segment of one’ for each customer by understanding their likes, preferences, and behavior—inspiring them to discover more products and content that will suit their unique taste and providing a productive, pleasant, and totally unique shopping experience.”

AI has a lot of potential in the retail industry. With more improvements and advancements, our online shopping experience will only get better and better. 

Online shopping offers a seemingly infinite array of choices that leaves shoppers overwhelmed / Photo by: Aleksandr Davydov via 123RF