AI in the E-Commerce Industry
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AI in the E-Commerce Industry

18 March 26 March ~ 10 min read 1310 views
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Claspo Blog AI in the E-Commerce Industry

If you're not using AI in e-commerce yet, you're already behind the trends. According to Contentscale, 80% of US retailers are currently using AI, and this share may increase to 95% in 2025. Let us tell you more about how AI increases business efficiency and which top companies have achieved the greatest success in this area.

Why You Should Use AI in E-Commerce

Why_You_Should_Use_AI_in_E-Commerce

Modern artificial intelligence simulates processes similar to those in the human brain. Unlike computer programs of the previous generation, it adapts to new conditions, explores patterns, and constantly searches for the most effective ways to solve problems. Although artificial intelligence is inferior to humans in some ways, it works tens of thousands of times faster, which brings it many advantages. According to Authority hacker statistics, AI increases workplace productivity by 40% on average.

1. Better targeting

Artificial intelligence can analyze tens of thousands of parameters of a potential customer. Where a visitor came from, how many microseconds they held the cursor over the button, how quickly they scrolled the page, and how many photos they viewed in a product card—all this is important information for AI in e-commerce. 

By analyzing this data, artificial intelligence determines which segment of the target audience a user belongs to. With each subsequent action, the accuracy of its conclusions increases—it is 90-95% on average. This makes it possible to select the perfect marketing tools, create persuasive appeals, and personalize content without directly collecting information using tools like surveys.

2. Optimization of financial performance

One of the key benefits of AI in e-commerce is its affordability. Subscriptions to popular AI services cost from $20 to $200 per month. At the same time, these programs reduce staff working time by 30-60%. Even in small businesses, this can save two to three working months, and large online stores can reduce costs by tens of thousands of dollars every month. 

In addition, intelligent analytics services help increase the profitability of marketing campaigns by determining the best discount amount, the perfect target audience coverage, or the frequency of contextual advertising display. Thus, more revenue and fewer expenses result in net profit.

3. Increase productivity

E-commerce startups often face difficulties in scaling. To increase sales, you must create sales departments, customer support and marketing teams, expand your staff, move to a new office, etc. This requires additional funding that usually has to be obtained externally, which means commitments, complications of the business structure, and enormous effort. 

Artificial intelligence allows existing specialists to process 3-5 times more applications, making it easier to scale, especially in the initial stages. Sales grow faster than the cost of maintaining infrastructure. This advantage allows small startups to compete with market leaders.

How to Use AI in the E-Commerce Industry

It seems like it won't be long before artificial intelligence becomes more efficient than people. Unfortunately, or fortunately, technology has not yet reached this level of development. Popular AI use cases in e-commerce include the following areas:

1. Customer segmentation

Customers are not homogeneous—each has its own needs, wishes, and expectations. However, you can divide them into specific groups with similar characteristics to create individualized commercial offers for them. Tools like Peak.ai and Optimove can help you do this. They allow you to analyze the behavior of users on the website, predicting their next actions. The accuracy of these applications can be improved by connecting them to a CRM with complete customer characteristics, purchase history, and call records. 

Customer segmentation helps you create highly personalized campaigns with messages that appeal to the pain points of a specific segment. This approach ensures an increase in click-through rate and, at most, sales growth. Once you've launched such campaigns, it's time to enlist the help of Claspo.

Target your pop-ups to those visitors who came to your site from a specific campaign, communication channel, traffic source, or based on the keyword that triggered your ad to appear! With Claspo's detailed targeting, you ensure a consistent customer journey, personalized experience, and an accelerated path to checkout.

2. Personalization of the website

Different customers require different sales techniques. For example, millennials respond better to messages with a strong emotional component. At the same time, representatives of Generation X prefer messages with a simple and accessible explanation of why they should buy from you. Such a personalized approach can be realized in an online store using AI in e-commerce. Tools such as Adobe Target and Dynamic Yield allow you to rebuild your website “on the go,” choosing the best types of content, and testing various hypotheses. According to Statista, the use of AI personalization:

  • increases the accuracy of data collection by 47%;
  • speeds up the obtaining of information by 44%;
  • increases customer retention by 44%; and
  • saves 42% of marketers' working time.

Implementing this level of personalization on your website takes time and a significant investment. If you can't afford it yet, personalize your audience experience with Claspo widgets.

You can target them not only based on previous interactions with your campaigns but also based on the geolocation of site visitors. The geo-targeting feature in our builder allows you to show personalized widgets to visitors from specific countries, regions, and even cities. What's more, you can set up different language versions of the same widget, and it will automatically display in the language that matches the buyer's browser language or the one they have selected on your website. And most importantly, all these features are available even in the free Claspo plan.

Claspo_geotargeting

3. Intelligent pricing

How much should a product cost to make the offer look profitable? What discount should I give to attract the attention of potential customers and not lose too much money? What should the price increase be to avoid losing your existing audience? Intelligent pricing systems, such as Pricefx and Competera, have answers to these and other questions. To determine the best price for a product, they conduct extensive research, taking into account competitors' policies, the price elasticity of a product, and the company's business model. This is real-time monitoring - applications warn of profound changes requiring a specialist's attention.

4. Smart search

A wide assortment can be both an advantage and a disadvantage for an online store, especially if the catalog has a rather complex structure. Some customers will simply refuse to search for a product they need and close the browser tab. You can retain them with the help of AI tools Coveo and Syte.ai. They allow customers to find products based on indirect queries, such as the color of clothes, the purpose of a car part, or the price category of computer graphics cards. These apps can also recommend products based on a customer's browsing and purchase history, increasing sales and improving conversion rates.

One example is the online second-hand store Swap.com. The use of artificial intelligence has allowed it to increase sales by 10%, average purchases by 8%, and conversion rate by 4.7%.

5. Automation of technical support

One of the challenges in business development is the scaling of communications. This area of activity is very difficult to automate without the use of AI in the e-commerce industry. Chatbots such as Kore.ai and Algomo can take over communication with customers. Modern web applications can connect to the most popular CRMs and be launched without prior training, and they do not require maintenance by the business owner. They answer common questions and engage a specialist in a dialog if a client needs extended support.

3 Examples of Using AI for E-Commerce

The use of artificial intelligence in retail is a mature trend that emerged about 6-8 years ago. Top companies have already conducted their own experiments, tested standard solutions, and launched modern software solutions. Here are a few examples of AI in e-commerce that demonstrate their success.

1. Amazon

The world's largest marketplace began experimenting with artificial intelligence in the mid-2000s and demonstrated a very successful solution in the mid-2010s - a recommendation service. AI analyzes user behavior, browsing and purchase history, and many other parameters, selecting the products a customer needs. It significantly increases the conversion rate and the average purchase amount. 

But Amazon has not stopped there. Recently, the company created a dynamic pricing system that automatically adjusts the cost of goods to increase profits. It studies the current marketplace situation by analyzing competing sellers' activities. For example, if another store doesn't have the same item, artificial intelligence will automatically increase prices, and if competitors have recently replenished their stocks, it will reduce prices. This solution allows you to entrust the routine of business management to AI, letting you focus on creative ideas.

AI_in_E-Commerce_example

2. Carrefour

The French retailer decided to combine AI and e-commerce in a different way. It simplified shopping as much as possible with the help of the Google Assistant voice assistant. The company created its own API for recognizing complex queries, which became an "adapter" between its catalog and smart devices. 

The system allows you to specify certain characteristics of goods, such as ordering dark chocolate, a 3-liter bottle of orange juice, or Huggies diapers. It creates a list in a mobile app or web interface. At this stage, a user can continue to control the purchasing process with the voice assistant to choose a payment method, delivery address, and courier time.

Carrefour

3. Rainbow Apparel

An online clothing store faced an unusual problem: a few years ago, 2% of all transactions on its website were fraudulent. The company was losing money and was forced to hire additional cybersecurity specialists to check certain transactions manually. That was until the corporation's vice president of marketing, David Kost, decided to use artificial intelligence to do the job. 

An application called Signifyd analyzes hundreds of transaction parameters in an impersonal way. By examining publicly available information, it automatically blocks suspicious transactions and sends a report to the cybersecurity department. Thanks to artificial intelligence, the company reduced the share of fraudulent transactions to 0.5% in just one year and the number of manual checks by 10 times.

Rainbow_Apparel

Future of E-Commerce with AI

Having considered the benefits of artificial intelligence and how it can be used in online retail, we can draw a simple conclusion. Technologies are changing retail forever. There is no way back - those who refuse to make progress today risk losing everything tomorrow. The use of AI in e-commerce is already becoming a prerequisite for success - it is very difficult to compete and retain customers without an intelligent assistant. 

These are our realities. What should we expect in the near future? Experts have identified the following areas of technology development:

  1. Fully personalized online stores. It's like Netflix but with real products instead of movies and TV shows. On the main page or in the relevant section of the catalog, each consumer will see only those products that match their lifestyle and needs. Of course, there will be access to other products, but this will require a little more effort. In the future, stores will be able to change catalog structures, photos, product descriptions, and multimedia elements. They will also be able to use feedback and recommendations from influencers close to the consumer's interests. 
  2. Integration of online stores into social networks. A user scrolls through the Instagram feed, sees a stylish shirt, taps on its image, and gets a full list of offers with the ability to sort by price, delivery time, and other parameters. Does it sound fantastic? No, it's just a description of how AI is changing e-commerce. Intelligent search platforms based on photos or rough descriptions already exist today. There is only one step left to integrate them into social networks. 
  3. Combining blockchain and artificial intelligence. Blockchain is the technology that guarantees the security and anonymity of online transactions. It serves as a reliable protection against fraudulent operations and data substitution. By combining it with AI, you can significantly increase the level of trust in online stores, reduce losses, and simplify lead generation.

Stay Ahead with Claspo

Claspo and AI can be great partners that work hand in hand for you:

  • AI helps you create text that sells and images that create an emotional connection with your audience, and Claspo widgets demonstrate them to your site visitors, driving conversions,
  • AI analyzes the customer's journey on your website, and Claspo's flexible display rules allow you to correctly insert pop-ups into this journey and lead visitors to checkout faster.
  • AI segments your audience for personalized campaigns, and Claspo allows you to display widgets based on previously seen/received campaigns,
  • AI rebuilds site content “on the go,” and Claspo pop-ups change language “on the go.”

And most importantly, Claspo, like artificial intelligence, is constantly evolving, improving its opportunities for your best outcomes. Take advantage of our free plan, see the effectiveness of our widgets, and boost it with various AI tools.

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