Generative AI in E-commerce: 6 Top Use Cases

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Generative AI is the biggest thing in e-commerce since free two-day shipping. It’s transformed everything from the digital shopping experience to back office operations and everything in between. Generative AI in e-commerce not only makes marketing and operations more efficient, it also brings the in-store experience online in ways that bring added value to customers. 

70% of the US population shops online. Globally, there are over 2.14 billion online shoppers as of 2023. While the convenience and simplicity of shopping from home 24/7 365 days a year continues to fuel the growth of e-commerce, shoppers still want the personalized, interactive experiences that they receive in-store.  

Key ways retail leaders use Generative AI in e-commerce 

Let’s explore a few ways top brands use Generative AI to get to know their customers better and provide the interactive digital customer experiences their shoppers want. 

1. AI Chatbots

Business hours simply do not apply to an online storefront. Slow responses to customers can result in lost sales. Non-availability can even be perceived by customers as disinterest from the brand. Response speed is just as significant as availability. According to HubSpot Research, 90% of customers rate an immediate response as important or very important when they have a customer service question. 

Chatbots, particularly AI chatbots, help e-commerce brands connect with customers instantly, no matter what time of day or day of the year it is. There are three types of chatbots

  1. AI chatbots that use natural language processing to sound more human, enhancing the e-commerce customer experience while being less robotic and more helpful.
  2. Rules-based chatbots that answer predefined questions.
  3. Hybrid chatbots that combine the two. 

While round the clock coverage is no longer a nice to have, but a must-have for e-commerce, brands must choose a chatbot and an e-commerce chatbot strategy that resolves customer’s questions rather than deflect them. The best digital strategies bring together humans and AI. So while an AI chatbot will become even more helpful and conversational as it learns, it won’t replace human agents, but rather add hours and scale to the customer experience. The relationship between humans and AI should always be a collaboration rather than a competition. 

2. High-performing digital messaging 

E-commerce brands often miss out on opportunities to connect with customers on a human level. Customers want to feel like the brands they shop know them, no matter what digital channel or stage of the customer journey they happen to be on. Not to mention, customer preferences change faster than ever, which often leaves brands with outdated messaging that no longer performs.

To compete for the attention of digital-first customers, brand messaging needs to consistently inspire customers to take action in the moment and tap into emotions. Inspiration isn’t accomplished through digital marketing copy that “sounds good” and is on-brand—that’s a given. What brands need is for the messaging to drive performance (i.e. conversions, sales, email opens, etc.). According to a recent Persado study of 250 retail marketers, even the most experienced digital marketers only pick the highest-performing messaging around one third of the time. 

That’s where Generative AI comes in. While most Generative AI tools can easily create copy that meets the brand guidelines and is conversational, Persado Motivation AI takes AI-generated messaging one critical step further. Motivation AI, a specialized class of Generative AI created exclusively for enterprise marketing and e-commerce teams, provides brands with both efficiency and effectiveness. Motivation AI is trained on over 1.5 billion customer interactions from 150 million US customers. This data is used to create AI-generated digital marketing messaging that motivates customers to convert at key moments—including in the online cart

As seen in the real life example below, more customers purchased sweaters at a lower discount because of the performance-driven AI-generated messaging. 

Generative AI helps an e-commerce brand drive more sales at a lower discount

 

Kate Spade, too, has benefited from Persado by enhancing e-commerce retention and loyalty with its Generative AI

3. Content and image creation 

Customers shopping online can’t physically see or touch items. So images and videos are vital to sell products. Brands need high quality images for every product. With the help of Generative AI, companies can list products faster, as they no longer have to wait for studios or photographers to be available in order to quickly generate or edit product images at scale. AI-generated backgrounds save e-commerce teams time and money on set dressing and location hunting. 

Generative AI image tools also help brands mock up photos, brainstorm visual ideas, and edit user-generated content. 

4. No-code reporting 

E-commerce leaders can improve the customer experience and better understand what matters to their customers by using Generative AI to create detailed reports. These valuable insights detail customer behavior, preferences, sales, and more. Using them, brands can easily understand business performance and make data-driven decisions based on what their customers are telling them. All without coding. 

Generative AI can also be used to analyze consumer search trends to improve SEO and identify content that customers are searching for. This insight helps e-commerce brands enhance blog posts and product descriptions to improve their search engine rank. 

5. Product and packaging design

Generative AI has the potential to revolutionize fashion and packaging design. In the future, brands could not only bring clothing and accessories to the market faster with the help of Generative AI, but they could also use Generative AI to combine different aspects of product and packaging designs popular with customers. This could possibly result in better, more innovative designs, and elevate the customer experience.   

6. Virtual try-ons

In-store shoppers know right away if an item of clothing is for them (or not) when they try it on in the fitting room. While clothing is one of the most-searched shopping categories, it’s a challenge for online shoppers to know which items will work for them. This can lead to an influx of returns and dissatisfied customers.

Google’s virtual try-on tool uses Generative AI to bring the fitting room experience online—helping shoppers feel more confident in their clothing purchases. 

Virtual try-on for apparel shows e-commerce customers how clothes look on a variety of models of diverse sizes and skin tones. Google’s Generative AI model takes a clothing image and accurately displays how it would drape, fold, cling, stretch, form wrinkles, etc. This Generative AI feature is currently available on e-commerce websites such as Anthropologie, Everlane, H&M, and LOFT. Customers can access the virtual try-on tool by tapping products with the “Try On” badge on Search and selecting a model that best represents them. 

Like a store associate, virtual try-on helps shoppers find similar products in different colors and price points. But, shoppers aren’t limited to just one store. The tool uses machine learning and new visual matching algorithms to suggest options from across the web. 

Generative AI not only allows brands to understand their customers better based on their habits, behavior, and preferences, it also gives e-commerce and marketing teams the tools they need to engage with customers at scale. So the more e-commerce sales increase, the more a brand can benefit from Generative AI in e-commerce. 

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