Mariia Volina

Marketing Strategist
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5 Ways to Use AI for Online Shopping

Mariia Volina

Marketing Strategist
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2020, the world changed overnight. The global lockdown began! Billions of people are unable to leave their homes with little else to do other than surf the internet.

Online shopping surged, and every "click to purchase" nudged Amazon a little further toward utter domination as total eCommerce sales doubled.

The impact of COVID-19 has led to a shift in consumer behavior, with 67% of shoppers reporting changes in their shopping habits. In response to this shift, online retailers have risen to the challenge by increasing their focus on online sales and adopting cutting-edge technologies to establish meaningful connections with customers while enhancing their overall shopping experience.

Unless you have lived in an underground bunker for the last couple of years (which some of you may have), you've probably encountered the term "artificial intelligence" or AI.

AI is steadily weaving itself into the fabric of our daily lives. It's evident in the proliferation of self-checkout kiosks and the advanced security measures at airports. Artificial intelligence seems to have found its place in virtually every facet of our lives, and online shopping is no exception.

AI-powered tools are profoundly reshaping online retail space, offering shoppers personalized experiences, increased convenience, and enhanced security.

In this blog, we will delve into five key ways AI revolutionizes online shopping as retailers meet the surge in demand.

AI in Online Shopping: Personalized Shopping Recommendations

When shopping online, you've undoubtedly encountered features such as 'recommended for you,' 'products you might enjoy,' or 'customers also purchased.'

Amazon was the first company to offer product recommendations and has used them for about 20 years. These recommendations have become so common that shoppers don't even realize they are AI-powered.

Amazon's product recommendation system is one of the most sophisticated in the world, driving a massive 35% of sales. It uses a variety of factors to generate personalized recommendations for each shopper, including their purchase history, browsing history, and ratings and reviews.

For example, purchasing a book on Amazon will likely see recommendations for other books in the same genre. If you browse a product page for a new laptop, you will likely see recommendations for other laptops with similar features. And if you rate a product highly, you will likely see suggestions for other products that other shoppers with similar ratings have enjoyed.

Amazon's product recommendations are so effective because they are personalized to each shopper's individual needs and interests. This makes it easier for shoppers to find the products they are looking for and discover new products they may not have considered otherwise.

As a result, Amazon's product recommendations have become an essential part of the online shopping experience for millions of shoppers worldwide.

Amazon's product recommendations are just one example of how AI personalizes the online shopping experience. Other major e-commerce platforms, such as Alibaba and eBay, also use AI to generate personalized recommendations for their shoppers.

In addition, many smaller e-commerce platforms and even brick-and-mortar retailers are starting to use AI to power their product recommendations. This is because AI has become more affordable and accessible in recent years.

As a result, AI-powered product recommendations are becoming "the standard" in the online shopping world. This is a positive development for shoppers, as it makes it easier for them to find the products they are looking for and discover new products they may not have considered otherwise.

Virtual Shopping Assistants

Another exciting application of AI in online shopping is virtual shopping assistants. Virtual shopping assistants are AI-powered chatbots and voice assistants that can offer personalized shopping assistance to consumers.

Virtual shopping assistants can help consumers with a variety of tasks, such as:

  • Finding products that meet their needs and budget
  • Comparing products from different retailers
  • Answering questions about products and services
  • Placing orders and managing returns
  • Cart abandonment reminders

Virtual shopping assistants can be accessed through various channels, including e-commerce websites, mobile apps, and smart speakers.

For example, Sephora's virtual shopping assistant, Sephora Virtual Artist, can help users find the perfect shade of foundation or lipstick. Sephora Virtual Artist uses AI to analyze the user's skin tone and facial features to generate personalized recommendations.

Virtual shopping assistants offer several benefits to retailers:

  1. Task Efficiency: Automating common inquiries frees up customer service teams to focus on more complex issues, improving overall service quality.
  2. Enhanced User Experience: Guiding users to their desired destinations reduces frustration and increases browsing time.
  3. Customer Retention: Personalized recommendations and improved overall experiences encourage repeat business and higher spending.
  4. Data Insights: Gathering valuable customer behavior data for ongoing website improvements and personalized offers.
  5. Competitive Edge: Setting your brand apart and reinforcing your identity, fostering direct customer relationships, and driving loyalty.

As AI chatbot technology continues to develop, online businesses will find more innovative ways to use it, improving the customer experience.

Visual Search and Image Recognition

"Pictures are worth more than a thousand words."

Visual search is an advanced tool based on artificial intelligence (AI) and deep learning that allows customers to search eCommerce stores using images rather than traditional keywords. Visual search allows users to upload a picture of a product or a portion of a product and automatically find similar or identical products in the store.

Visual search and image recognition technology are reshaping the way users discover products online. This feature is especially useful when users have difficulty describing an item in words but can visually identify it. The potential applications of visual search in eCommerce are vast, from finding fashion items based on a photo to locating similar home decor items.

Scenario: Visual Search for Finding a Winter Coat

Imagine you are looking for a specific type of coat for the winter season. Instead of typing out a detailed description of the coat, you can simply take a photo of it with your smartphone.

For example, you could take a photo of a coat you see on someone in the street or in a magazine. Then, you could upload the photo to a visual search app, such as ASOS's Style Match feature.

The app would use image recognition technology to analyze the photo and match it with similar products available on the app. You could then browse through the recommended products and purchase the one you like.

Visual search is a convenient and efficient way to find products, especially if you don't know the name of the product or if you're having trouble finding it online. It can also be helpful for finding products that are difficult to describe, such as certain types of clothing or home decor items.

Here are some additional benefits of visual search for product discovery:

  • Personalization: Visual search can be personalized to your individual needs and preferences. For example, you could use visual search to find products that are similar to the ones you already have or to find products that you see in real life.
  • Accuracy: Visual search is becoming increasingly accurate as machine learning technology improves.
  • Convenience: Visual search is a convenient way to find products, even if you're not sure what you're looking for or if you're having trouble finding it online.

AI-powered visual search transforms mobile shopping with its seamless, efficient experience. It will continue to evolve, integrating AR and refining recognition capabilities, shaping the future of e-commerce.

Fraud Detection and Customer Security

Ecommerce fraud is a serious threat to online businesses and customers alike. Fraudsters can use stolen credit cards, fake identities, chargebacks, and other schemes to steal money and goods from legitimate transactions.

AI-based fraud detection uses machine learning algorithms to analyze large amounts of data to identify patterns and anomalies that may indicate fraudulent activities. This approach is more accurate and efficient than traditional fraud detection methods, and it can help eCommerce businesses reduce losses, improve efficiency, and enhance customer trust.

How AI Detects Fraud in Ecommerce Transactions

AI can detect fraud in eCommerce transactions in several ways, including:

  • Anomaly detection: AI algorithms can identify unusual patterns or behaviors that may indicate fraud, such as a sudden increase in purchase amount or frequency.
  • Behavior analysis: AI algorithms can analyze customer behavior to identify patterns that may indicate fraud, such as making multiple purchases from different accounts with the same shipping address.
  • Device fingerprinting: AI algorithms can analyze data about the device used to make a transaction, such as its IP address, location, and browser type, to create a unique "fingerprint" of the device. This allows the AI system to detect when the same device is used for multiple fraudulent transactions.
  • Network analysis: AI algorithms can analyze data about the relationships between customers, such as shared IP addresses or shipping addresses, to identify patterns of fraudulent activity. For example, if multiple accounts are created from the same IP address and then used to make fraudulent purchases, this may indicate a fraud ring.

AI steps in as a guardian of customer security, not only safeguarding customer information but also building trust in online shopping platforms. Ecommerce giants like PayPal and Shopify rely on AI-based fraud detection tools to protect their users and maintain the integrity of their platforms.

Streamlining Inventory Management with AI

Inventory management forms the crux of any successful online store. It revolves around meticulously tracking and controlling a retail business's stock or merchandise. This encompasses continuously monitoring inventory levels, overseeing the flow of products in and out of a company's inventory, and ensuring ample stock is readily available to meet customer demands.

For instance, having precise, real-time inventory data proves invaluable for the eCommerce sector as it helps prevent stock shortages and missed sales opportunities. With this data, businesses can swiftly reorder products running low, guaranteeing that customers can access the items they desire exactly when they want them.

AI brings several advantages to inventory management, including:

  1. Enhanced Precision: AI algorithms excel at analyzing extensive datasets, uncovering patterns and trends that empower businesses to make more precise inventory predictions and forecasts.
  2. Heightened Efficiency: These algorithms can automate a multitude of manual tasks integral to inventory management, such as order processing and stock replenishment. This automation not only saves time but also enhances operational efficiency, freeing up resources for other critical tasks

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Wrapping up

While the term 'artificial' might carry connotations of something impersonal or devoid of human touch, artificial intelligence (AI) holds the remarkable potential to enhance the customer experience significantly.

AI empowers eCommerce businesses to scrutinize vast volumes of daily interactions, enabling them to fine-tune their offers down to an individual customer level – a level of personalization that marketers have long aspired to achieve.

Furthermore, sales teams today wield an unprecedented wealth of information. AI-based tools have ushered in a new era of personalization within the sales cycle. These tools empower sellers to precisely tailor their engagements, ensuring they connect with the right prospects using the right message at the right moment.

In this way, AI is not merely artificial; it's a catalyst for remarkably personalized and effective customer interactions, transforming the eCommerce landscape.

If you're an e-commerce business owner, it's important to consider how you can leverage AI to improve your business. AI can help you to attract new customers, increase sales, reduce costs, and improve customer satisfaction.

Here are some tips for getting started with AI:

  • Identify your pain points. What are the biggest challenges you're facing in your business? AI can help you to solve these challenges and improve your bottom line.
  • Start small. You don't need to invest in a complex AI solution right away. Start by implementing small-scale AI solutions to address specific problems.
  • Partner with experts. There are many companies that offer AI solutions for e-commerce businesses. Partner with an expert to find the right solution for your needs.

If you run a Shopify store, another great way to leverage the power of AI is with Askflow.

Askflow: The AI-powered quiz platform that revolutionizes the shopping experience.

Askflow is a powerful AI-driven quiz platform that helps eCommerce businesses revolutionize the shopping experience for their customers. With Askflow, you can create engaging and fully customizable quizzes that help customers discover the right products for their needs, preferences, and budget.

Askflow's visually stunning designs and built-in analytics and reporting make it easy to create and manage quizzes that boost your profits and save you time. Plus, Askflow's insights into buyer preferences and behavior can help you improve your product selection and marketing campaigns.

Here are just a few of the benefits of using Askflow:

  • Improved customer experience: Askflow's quizzes make it easy for customers to find the products they're looking for. This leads to happier customers and more sales.
  • Increased profits: Askflow's quizzes can help you increase profits by boosting conversion rates and average order value.
  • Reduced time spent on customer support: Askflow's quizzes can help you reduce the amount of time you spend on customer support by answering common questions and providing personalized recommendations.
  • Enhanced product discoverability: Askflow's quizzes help customers discover new products that they might be interested in. This can lead to increased sales and customer loyalty.
  • Valuable insights into buyer preferences and behavior: Askflow's built-in analytics and reporting provide valuable insights into buyer preferences and behavior. This information can be used to improve your product selection, marketing campaigns, and overall customer experience.

If you're looking for a way to revolutionize the shopping experience for your customers and boost your profits, Askflow is the perfect solution for you.

Sign up for a free trial today and see the difference Askflow can make for your business.

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