Artificial intelligence is disrupting retail in dramatic ways.  One of these ways is with regard to online shopping. Online shopping is growing in popularity at a faster pace than in store shopping. The reason for this trend is likely because artificial intelligence (AI) and machine learning are revolutionizing the online shopping experience – in particular with respect to search options and customer service – and happier customers are shopping online more than ever.

With artificial intelligence, the online search in the retail sphere has become more high-tech, streamlined, personalized and automated. And customers are appreciating the fact that customer service from their favorite brands is available 24/7 with the help of chatbots and other technology. So brands are staying plugged into their customers no matter what time of day customers choose to shop. Indeed, AI allows brands to develop apps to dramatically improve customer service and this is great news because for brands in the digital/mobile era, its all about search and customer service. When customers have the ability to quickly find exactly what they are looking for, and receive the right type and amount of assistance when assistance is needed, it is a win win for everybody and ka-ching, ka-ching for brands.

Here are some of the ways that AI is impacting the online shopping experience:

  1. Visual product discovery. Artificial intelligence technology allows customers to literally discover products without having to visit a brick and mortar store. While in-store experiences will always be important to at least some shoppers, younger consumers like millennials and Gen Z are showing that they are willing to at least browse products online and discover products online – and often purchase the product online – without having to go into the store. That is because AI allows them to have an almost 3D experience with the product such that it is becoming less and less important to visit a store to make purchasing decisions.
  2. Personalized recommendations. Brands and retailers are finding that “personalization” is increasingly very important to consumers and shoppers and with AI, personalization is becoming more and more commonplace. Using social media generated big data, for example, AI’s developers can program a brand’s website and app for “intelligent search” that uses the personal data of users of the app and website (and even from third party apps and sites.) Of course, personalized recommendations are more likely to be purchased than recommendations that do not meet the customers’ needs.
  3. Improved product indexing, product tagging, meta-tagging, sales forecasting. For the retailer and brand, AI allows for products to be indexed and tagged more quickly. In turn, brand managers can make better forecasting decisions in real time based on the purchasing behavior of their customers. This leads to greater efficiency and less waste as well as to higher bottom lines.
  4. Increased order value. Artificial intelligence is reported to result in increased order value per customer. This is because customers can easily find not only the products they are searching for directly, but recommended additional products that pop up on their search pages with AI technology. Also, because customers can have an almost 3D interaction with the products, they are more inclined to finalize their purchases as a result.
  5. Seamless navigation. Using voice commands, robots and other machine learning/deep learning technology, users can more easily find what they are looking for online. Often with artificial intelligence a brand can install an interactive catalog on its app and allow for bots to help searchers navigate the site, provide 24-hour customer service if the customer has questions, and give the customer the ability to compare and/or check prices and download coupons. All this without headaches and confusing links that lead to nowhere – thanks to AI.
  6. Improved “intelligent” search. Using natural language, facial recognition, voice optimization software, and other techniques, customers are able to conduct more indepth, personalized searches than ever before. Again, this is thanks to artificial intelligence.
  7. Big data analytics used by artificial intelligence software gives customers heads up about “related looks”, “exact matches ” “similar items” and other recommendations in a speedy, personalized way. Without artificial intelligence it would be all but impossible for developers to program websites in a manner that would allow customers to have the benefit and advantage of their own big data while shopping online on the level that is possible with AI.
  8. Artificial intelligence software allows brands to better track page visitors and better understand and analyse conversion rates; and it also gives them the ability to retarget customers who either completed purchases in the past, or who had abandoned a purchase. The technology now allows the brand to remind the customer of a previous purchase – sometimes before the customer even returns to the website through email, or notification by app.
  9. Artificial intelligence allows for greater automation of services, and seamless check out. Increasingly, the customer does not even have to reach into his or her wallet to check out, nor do they have to take out a credit card as all data is stored and payment has become automatic. Customers will soon be able to avoid even having to use their keyboards at all, and will be able to use voice technology in some instances to complete their purchases from beginning To end.
  10. Artificial intelligence is also being touted for allowing for enhanced cyber security, greater ability to protect customer data and also greater ability to protect the brands from fake online reviews.

So, all in all, it looks like a marriage made in heaven. But there are bound to be hiccups along the way during what is expected to be a long-term relationship. For example, many studies have been conducted on the millennial demographic and one showed that “65% of millennials preferred interacting with bots instead of talking to real human beings.”  This may be true enough and brands and retailers are no doubt rejoicing as they invest more heavily in artificial intelligence software and double down on automating their customer service online. However, retailers should take it all with a grain of salt considering that the Internet is littered with articles and reports about how, for example, Facebook is scrapping or has scrapped its bots because of the epic fail rate of said bots. If bots are not working for Facebook, then maybe brands and retailers should go slowly in hedging all their bets on AI technology for their online strategy.