This Nembrini Consulting Outlook series has primarily focused on the use of LLMs (large language models, which is the underlying AI technology for tools such as ChatGPT).  This is merely a subset technology of all the possibilities that AI currently offers across industries, and where the eCommerce sector is no exception.  As the closing article for this series, rather than continue to focus on a specific AI technology (LLMs), we’ll focus on a specific sector and see how it is impacted by various AI technologies that are already available and re-defining the customer journey, along with the different aspects of eCommerce, including customer-centric search, visual search capabilities, efficient sales processes, personalised recommendations, virtual assistants, integration with wearable technology, and the ability to detect counterfeit products and fake reviews.

 A. Customer-Centric Search:

To enhance the search experience for online shoppers, businesses are turning to AI-powered technologies. eCommerce search enhancement API tools such as Twiggle, for example, utilise natural language processing to improve search results by narrowing and contextualising the product offerings. Twiggle’s solutions are based around Natural Language Processing (NLP) rather than key words. Twiggle understands, for instance, that searching for “a dress for a wedding” is not the same as searching for “a wedding dress”, and as such, it will filter the results accordingly. Clients can connect their search engines to Twiggle via an API, providing the enhancement without the need to disrupt or modify any important infrastructure components (to achieve this, the company partnered with Google Cloud).  By enabling search engines to think like humans, Twiggle provides more relevant and accurate search results, reducing customer frustration and increasing conversions. 
Similarly, Clarifai, a leading platform for building AI-powered software solutions, uses AI to analyse images and videos, thus allowing for advanced visual search capabilities that enhance the customer’s ability to find desired products with ease.

_{Image source: Clarifai}

B. Visual Search Capabilities:

AI-driven visual search capabilities have become a game-changer in eCommerce. By leveraging machine learning algorithms, eCommerce platforms can enable customers to discover products based on visual cues. For example, Pinterest’s AI-powered visual search allows users to select an item in a photograph and find similar products. This technology enables customers to explore and find products they desire, even if they don’t have specific keywords or descriptions.

_{Image source: Pinterest Newsroom}

C. Efficient Sales Processes:

AI is revolutionising the sales process by integrating with customer relationship management (CRM) systems. AI-powered virtual assistants and chatbots, such as Siri or Alexa, can provide personalised support to customers by answering their queries, and in the process, by identifying new sales opportunities. By leveraging natural language processing and machine learning, these virtual assistants enable businesses to deliver efficient and personalised customer service, improving overall customer satisfaction and driving sales.

D. Personalised Recommendations:

AI’s ability to analyse vast amounts of customer data allows businesses to provide highly personalised product recommendations. Companies like Amazon and Netflix use AI algorithms to analyse customer behaviour, preferences, and purchase history to offer tailored recommendations. This personalised approach enhances the customer experience, increases customer loyalty, and drives sales.

E. Virtual Assistants:

AI-powered virtual assistants, such as Amazon’s Alexa, have become an integral part of the eCommerce customer experience. These intelligent assistants can help customers with tasks such as placing orders, tracking deliveries, and providing product recommendations. By leveraging natural language processing and machine learning, virtual assistants create a conversational experience that mimics human interactions, enhancing customer engagement and satisfaction.

In the United States, online travel agency Expedia has introduced a new travel-planning tool that integrates ChatGPT, an LLM (large language model). This tool empowers members to build their perfect itineraries, including accommodations, activities, and transportation, simply by starting a conversation within the app. By incorporating AI into the travel planning process, Expedia aims to provide a seamless and personalised experience to its users.

F. Integration with Wearable Technology and Virtual Reality :

The rise of wearable technology, such as smartwatches and fitness trackers, has opened new avenues for AI integration in eCommerce. AI-powered wearable devices can collect data on user preferences, activities, and behaviours, enabling businesses to offer personalised recommendations and targeted marketing. For example, wearables can track vital statistics and provide tailored product suggestions based on individual needs and preferences. 

AI-powered AR applications now allow customers to virtually try on clothing, visualise furniture in their living spaces, or preview products before making a purchase decision. At the same time, VR technology enables customers to virtually navigate through virtual stores, providing a fully immersive shopping experience that closely resembles a physical presence.

These immersive experiences go beyond engaging with customers; they also foster purchase confidence by effectively mitigating uncertainties and bolstering conversion rates. One notable example is Google’s new virtual try-on feature, which utilizes generative AI to show clothes on a wide selection of body types. The tool has been trained to accurately match the shape of the shirt to the person in varying angles, providing a realistic representation of how the clothing would look on different body types.

_{Image source: Google}

A 2023 U.S. survey commissioned by software provider Redpoint Global revealed that nearly 48% of respondents expressed a desire to interact with AI more frequently if it could enhance their customer experience by making it more seamless, consistent, and convenient. This highlights the growing demand for AI-driven solutions that cater to customers’ needs and preferences. In Europe, retail company Carrefour has been testing videos on its website created with ChatGPT and generative AI. These videos feature human-like avatars that answer customers’ questions about purchasing healthier foods at lower prices. By leveraging AI-powered avatars and LLMs, Carrefour aims to provide personalised assistance and offer relevant product recommendations to its customers.

The integration of AI, AR, and VR technologies in eCommerce has opened new possibilities and transformed the way customers interact with online stores. By coupling AI and immersive technologies, online retailers can create engaging, personalised, and interactive experiences that resonate with customers and drive business growth. As technology continues to advance, we can anticipate even more innovative applications that redefine the boundaries of eCommerce and enhance the overall customer experience.

G. Detecting Counterfeit Products and Fake Reviews:

AI is playing a crucial role in detecting counterfeit products and combating fake reviews in eCommerce. AI algorithms can analyse product attributes, brand information, and customer reviews to detect counterfeit items. By leveraging machine learning and data analysis, eCommerce platforms can provide a more secure and trustworthy shopping experience for customers.

The integration of AI in eCommerce has positively impacted the customer experience in many ways, including better enablement of customer-centric search, visual search capabilities, efficient sales processes, personalised recommendations, virtual assistants, integration with wearable technology, and by detecting counterfeit products and fake reviews. AI has allowed businesses to provide highly personalised and engaging experiences for customers, leading to increased customer satisfaction, loyalty, and sales. As AI technology continues to advance, we can expect even more innovative applications in the eCommerce industry, further enhancing the way customers discover, engage with, and purchase products online.

External sources:

• https://www.theglobeandmail.com/business/article-ai-goes-shopping-how-artificial-intelligence-will-reshape-the-customer/
• https://edition.cnn.com/2023/06/14/tech/google-ai-shopping/index.html
• https://www.accenture.com/content/dam/accenture/final/accenture-com/a-com-custom-component/iconic/document/Accenture-Technology-Vision-2023-Full-Report.pdf
• https://aibusiness.com/verticals/how-ai-can-enhance-the-in-store-customer-experience
• https://store.hbr.org/product/twiggle-e-commerce-with-semantic-search/620025
• https://siliconangle.com/2022/07/21/clarifais-new-community-service-aims-promote-ai-sharing-collaboration/
• https://newsroom.pinterest.com/en/post/our-crazy-fun-new-visual-search-tool
• https://www.linnworks.com/blog/artificial-intelligence-in-ecommerce

Source: Outlook Nembrini 23

• Chat gpt: https://www.nembrini.com/outlook/chatgpt-the-machine-that-answers-any-question/
• Virtual assistance: https://www.nembrini.com/outlook/chatgpt-focus-on-possibilities-with-copilot/
• Artificial intelligence: https://www.nembrini.com/outlook/chatgpt-challenges-and-social-implications/