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AI and eCommerce Personalization: What's Really New?

"Get ready for an AI revolution."

"Imagine delegating all your boring tasks and just doing what you truly love at work."

"Start using AI immediately or be overtaken by competitors."

Do these comments sound familiar? Artificial Intelligence (AI), despite its current buzz, is old news to those in the eCommerce marketing world. All this hype was around in 2018 when I was part of a budding AI-powered eCommerce startup. But even then, it wasn't breaking new ground.

AI's role in eCommerce personalization is straightforward. It's about presenting intelligent and relevant suggestions to customers. You can do it manually with complex spreadsheets or let Artificial Intelligence handle it in the style of Amazon.

Today's AI is capable of much more. It can smartly conceive new product categories based on their popularity. It has the ability to create real-time personalized messages using text generation. Good quality chatbots are available to help customers find what they need. Artificial Intelligence can also monitor and predict inventory levels.

Now, let's dive into what online retailers should be prioritizing.

A Brief Explanation of Artificial Intelligence

Before we go any further, let's clarify what I mean by "AI" and its relevance to eCommerce personalization. It's tempting to think of it as a conscious robot genie living in your computer, but today's AI is more about faster data analysis.

In the context of eCommerce personalization, AI isn't a conscious being that understands or knows things. It's essentially a logic tree. For example, when I say, "AI can act as a customer service agent," I mean that it will process the keywords from the customer's message and respond with the most frequently used words from its training data and learning models.

Consider this a cautionary note – Artificial Intelligence isn't all-knowing or self-aware. But that is also where its power lies. It excels at handling those tedious, minute, and repetitive tasks that a computer can do more efficiently than any human.

The Art of AI

If there's one takeaway from this piece, let it be this: Artificial Intelligence has extraordinary capabilities. If you're limiting yourself to this simple point of view "Customers who bought X, also bought Y" banners, you're seriously limiting your potential growth.

Here are a few paths AI can take.

Product Demand Prediction

It might seem hard to believe that Artificial Intelligence can accurately forecast consumer preferences between seemingly similar products such as Crest or Colgate toothpaste. But this isn't science fiction. A recent Harvard Business School and Microsoft study demonstrated that AI could already use customers' preferences to predict their toothpaste of choice.

Typically, such a study would cost up to $20,000 and several months of work. But now, "we can get those answers in under 15 minutes," says James Brand, an economist at Microsoft.

Product Popularity Analysis

I recently noticed a new scam trend on Twitter. Artists post their art, prompting fans to approve with comments like, "I'd wear this on a t-shirt!" Scammers quickly latch onto these interactions with AI, and a bot responds with a link to a t-shirt featuring the artwork.

A more ethical approach is to use natural language processing (NLP) to analyze reviews and social media buzz around your brand and products. This information then feeds into your business model, allowing you to launch products for online sale in response to demand.

In the future, we might even see AI integrated with dropshipping to instantly personalize product suggestions based on customer input.

Personalized Chatbots

I recently had a rather unusual experience resolving a customer issue using a site's chatbot. It was refreshingly quick, with my problem completely resolved in around three minutes with zero human interaction. This was very different from earlier chatbot user experiences, which were mostly frustrating.

If you decide to deploy AI chatbots, here are a few pointers:

  • Make it clear that the customer is interacting with an AI-powered chatbot.
  • Analyze the input to create FAQ (frequently asked questions) content or blog posts if recurring questions arise.
  • Always have the option to escalate to a human representative.

The success of ChatGPT has shown that Artificial Intelligence is capable of impressive writing, at least in short segments. While it can't write an entire article without human instruction, it can undoubtedly engage customers in chat. Often overlooked because it relates more to communication than sales, this level of personalization can significantly enhance customer satisfaction. Tailoring messages to address a customer's specific issue is far more effective than generic responses that likely won't resolve their problem.

Real-time, Personalized Messaging

Before AI, marketers relied on basic behavioral triggers, like automated abandoned cart emails. But with AI, the possibilities are endless.

Imagine a scenario where a customer is browsing a t-shirt product page, and it's sunny in their location. AI can generate a personalized message with a discount code like, "Get 10% off with the SUNNYDAYS code!" Or if a product is about to run out, AI can send a prompt, "Heads up! Stock is running low - buy now."

This integrates nicely with AI chatbot technology as customers are already becoming accustomed to conversing with AI chatbots.

AI & SEO: Your Personalized Success Gauge

AI isn't only transforming user interactions; it's enhancing how we personalize Search Engine Optimization (SEO) in eCommerce. AI tools can sift through vast amounts of data, spotting search trends and consumer intent to craft keyword suggestions that better match your customers' searches.

The magic doesn't stop there. By analyzing organic search behaviors, AI pinpoints content types that pique your target audience's interest. This insight can shape your on page SEO strategy, pushing you towards topics that improve engagement and rankings and ultimately get the right shoppers to your online store.

Real-time SEO adjustments are also within AI's capabilities. As personalized customer preferences shift, AI stays on top of the game, tweaking keywords and suggesting content alterations.

Artificial Intelligence also brings a new depth to measuring success. Beyond traditional metrics like conversion rates, it can trace individual user journeys, revealing what pushes customers to purchase or abandon their cart. Plus, with predictive analysis, it can forecast future trends, allowing you to adapt your strategies proactively.

Seizing the Opportunity

AI's role in personalization goes beyond simple product suggestions. If you believe personalized search results are the best AI can offer, you're just scratching the surface.

This article only starts to address the tasks that can be automated. To harness the power of AI in eCommerce personalization, ask yourself each time you perform a task manually, "How can AI do this for me?"

AI isn't going anywhere. If you haven't fully explored its potential, you're missing out on an opportunity to automate many things AI can do better, quicker, and more efficiently. The result? You are free to focus on the creative aspects of marketing you genuinely enjoy.

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