How Leaders Are Navigating AI in Ecommerce

Predictive AI has been improving ecommerce for years , from product recommendations to intelligent search results. But now, generative AI has the potential to change things further by revolutionizing customer experiences. Not to mention the ways it’s also increasing productivity, driving conversions, and fostering customer loyalty. A whopping 84% of ecommerce professionals believe AI gives companies a competitive advantage. Here’s how generative AI is helping them get ahead.

Hyper-personalize experiences at scale. When technology advances, 73% of customers expect better personalization. As AI extends business capabilities to tailor promotions, marketing messages, pricing, and more, shoppers will increasingly expect more customized experiences — wherever and however they shop. AI is already a key differentiator for businesses: More than a third of organizations (37%) credit AI for major improvements to personalization.

Automate tasks for maximum profitability. Growing revenue is always a top priority for businesses. One way to boost your bottom line? Automating tedious, manual tasks to improve productivity within your business. Thanks to machine learning and large-scale analysis of data powered by AI, commerce leaders can do this fast. They already see big gains using automation for self-serve order tracking, inventory, and returns management. By automating these parts of the ecommerce journey, your teams have more time to focus on strategic initiatives that move the business — and your revenue — forward.

Increase employee satisfaction and productivity. Customers aren’t the only ones who reap the benefits of AI in commerce. There are also advantages for employees. In fact, most businesses implementing AI report moderate to major improvements in employee productivity and satisfaction (84% and 82%, respectively). Developing a deep working knowledge of AI tools gives employees valuable career experience with a new technology. It can also offload many job functions that once felt tedious and monotonous, opening up new career trajectories and reskilling opportunities.

While use cases for generative AI in ecommerce are still emerging, here are five examples of how the technology is being applied today. Here’s everything you need to know about the unique benefits of AI in commerce, and how leaders are evaluating, investing in, and implementing it.

Whether you’re a merchandiser, marketer, designer, or developer, generative AI can help you save time. In fact, commerce professionals using AI estimate it saves them an average of 6.4 hours per week. Businesses can automate routine tasks and increase sales with GPT-powered product descriptions, smart promotions, and more. Time-intensive tasks that once required manual configuration, like creating new promotions, can be automated at scale. And generative coding can help teams innovate faster.

Now, tools like generative page designers allow users of all skill levels to design webpages in seconds with simple, conversational building capabilities. AI can also uncover insights and make recommendations to help teams reach strategic goals. Want to clear out dead stock and make way for new merchandise? Improve your abandoned cart strategy? Generative AI can suggest promotions, price points, and marketing messages to help you achieve your goal. Need to boost average order value? AI insights can recommend proven strategies that can increase add-to-carts and improve revenue.

Fraud detection is a critical part of ecommerce, but scammer tactics are always evolving and increasing in sophistication. In fact, 5% of its annual revenue to fraud each year.

AI’s predictive capabilities can learn scamming behavior and become smarter than the bad actors. The data points gained in this process can help payment solutions teams improve their fraud detection and target malicious activity without impeding legitimate purchases.

For all the benefits of AI, there are certain roadblocks that keep businesses from realizing its full potential.

Your AI is only as good as the quality of your data. A majority (70%) of commerce leaders say that poor data integration and harmonization is at least a moderate pain point on the road to AI implementation. To reap the benefits of AI in commerce, make sure all your company’s data is in one consistent format. This is known as “data harmonization”. Once your data is harmonized, it can be used to fine-tune an existing large language model (LLM) — an AI algorithm that uses deep-learning techniques and large datasets to understand, generate, and predict new content — to enable generative intelligence.

The best AI platforms will let you deploy your business’s transactional, product, order, fulfillment, and other commerce data — along with your customer relationship management software (CRM) and any third-party data — to get a 360-degree view of your customer. And they’ll do it while ensuring strict data security and privacy controls. That data will then provide opportunities for automation and growth, personalization, and actionable insights.

Maintaining customer trust is critical. Only 17% of customers fully trust companies to use their data responsibly, and a mere 13% fully trust companies to use AI ethically. This means organizations must be transparent about data collection and how they use it in business operations. To do that successfully, companies will need to develop ethical standards around their use of AI.

You’ll need to answer tough questions like: How do you ensure sensitive data is anonymized? How will you monitor accuracy and audit for bias, toxicity, or hallucinations? These should all be considerations as you choose AI partners and develop your code of conduct and governance principles.