How AI is transforming e-commerce

Last week Sam Altman, CEO of OpenAI, hosted their first developers’ day sharing big updates to features and plans for their AI models. For many in the tech world, this was one of the most exciting keynotes since Steve Jobs keynote in 2007.

The event marked one year since the ChatGPT broke the internet with 100M users in 2 months. They now have 100M active users weekly and shared major updates signalling what’s to come in the year ahead. 

But what implications does it bring for e-commerce?

The potential of AI, combined with advancements in technology and data analysis, will bring a new era of possibilities for e-commerce. The idea of AI being revolutionary to e-commerce mirrors what the internet did to commerce. From hyper-personalization to virtual shopping assistants, the potential for tools AI offers is boundless. By embracing these advancements responsibly, e-commerce professionals can create a more intuitive, efficient, and customer-centric online shopping ecosystem.

Recognizing the potential of AI, Gartner, a leading research and advisory company, has listed generative AI as the most commercially promising AI technology. Not only does AI make online shopping easier for the consumer, it helps e-commerce sellers and companies grow their businesses through everything from operations to creativity. 

According to a McKinsey report, in 2017, only 20% of organizations were using AI in their businesses; by 2022, that amount more than doubled. This year, the World Economic Forum said that AI services in the retail sector are predicted to increase from $5 billion to above $31 billion by 2028.

Generative AI and e-commerce

Content creation is essential for e-commerce stores, and with generative AI tools like ChatGPT, businesses can automate the creation of unique content for product descriptions, reviews, and marketing materials.

One of the most powerful things about AI is that it enables ecommerce platforms to personalize the user experience. A recent study by Shopify found that 72% of consumers are more likely to shop with a brand that uses AI-powered personalization.

That is why Shopify has launched Magic, a suite of free AI-enabled features that are integrated across Shopify’s products and workflows. Magic uses artificial intelligence to produce new content. It can be used to write product descriptions, translate web copy, and create headlines—all with a simple prompt into its generative AI tool.

Shopify customers can generate product descriptions based on keywords and tone.

 And this is just one example of the practical uses of AI. Today, sellers can generate product descriptions using generative AI and rely on GPT4-enabled customer service. 

Нow generative AI can be used to support e-commerce and merchants

Generative AI has the potential to open a new era of creativity and innovation in the e-commerce sector. By training on vast datasets, generative AI algorithms can generate content, visually stunning product designs, enabling businesses to offer unique and captivating offerings to customers. 

Content creation is essential for e-commerce stores, but it can be time-consuming. With generative AI tools like ChatGPT, merchants can automate the creation of high-quality and unique content for product descriptions, reviews, and marketing materials.

• Automated product descriptions

One of the primary applications of AIGC in e-commerce is the generation of automated product descriptions. By analyzing product features, specifications, and user reviews, AI algorithms can craft compelling and informative product descriptions, saving time for businesses and ensuring consistency across the platform. This expedites the listing process and enhances the overall quality of content.

• Personalized marketing copy

AIGC is revolutionizing marketing strategies by tailoring content to individual consumer preferences. These algorithms analyze user data, including browsing history, purchase behavior, and demographic information, to generate personalized marketing copy. This results in targeted and relevant promotional material, significantly increasing the chances of customer engagement and conversion.

Gartner made a bold prediction that 30% of outgoing marketing messages will be generated by generative AI in 2030, a stark contrast to the 2% in 2022. 

• Dynamic email campaigns

AI algorithms can generate customized email content based on user interactions and behaviors. This ensures that promotional emails are timely and resonate with the customers’  interests and preferences.

• Enhanced SEO 

For Search Engine Optimization (SEO), AI algorithms can generate keyword-rich, relevant content that boosts a website's search engine ranking. This leads to increased visibility, driving more organic traffic to e-commerce platforms.

• Content localization

For e-commerce businesses operating on a global scale, AIGC simplifies the process of content localization. AI algorithms can generate translations and adapt content to suit different cultural nuances.

Examples of how generative AI is used in e-commerce

Amazon 

Amazon uses generative AI to personalize product recommendations for its customers. By analyzing customer data, Amazon can generate a list of products that are likely to be of interest to the customer. This helps Amazon to increase sales and improve the customer experience. 

Nike 

Nike uses generative AI to generate marketing content. This content is tailored to each customer and helps Nike to reach a wider audience and promote its products and services.  

Nike also utilized generative AI to create custom-designed sneakers through their "Nike By You" platform. Customers can personalize and design their shoes using the platform, leveraging generative AI to generate unique design combinations based on user preferences. This approach provides a personalized and interactive shopping experience, attracting customers and driving sales.

Walmart 

Walmart uses generative AI to create chatbots for customer service. These chatbots can answer customer questions, provide support, and resolve issues. This helps Walmart improve customer service by providing 24/7 support and freeing up human employees to focus on more complex tasks.

eBay

eBay is also using generative AI to help sellers generate product descriptions. With Magical Listing tool, sellers can choose to have detailed product information instantly populated based on a product’s title, category, or features. Magical Listing will also let users upload a product photo in its next iteration. Then AI can write titles, and descriptions and add important information, such as product-release date, detailed category, and sub-category. 

Conclusion

In the rapidly evolving e-commerce landscape, artificial intelligence has emerged as a transformative force, reshaping how businesses operate and customers shop. From personalized recommendations to simplified and efficient customer management, AI plays a pivotal role in enhancing every aspect of the customer's buyer journey.