AI-powered personalization: the key to unlocking ecommerce growth

The e-commerce scene has evolved. Every other business is making progress online and trying to make some internet-based profit.

While certain business tools can help digital-first businesses, increasing competition means that barely existing online or running half-hearted campaigns isn’t enough for brands to make it big in e-commerce. They need to up their marketing game and reinvent how they interact with their customers. Modern companies need to predict the demands of their customers and be proactive with solutions. They have to adjust their posts to be relevant.

Fortunately, technology has not failed them to do all this on their own.

Artificial intelligence, more popularly known as AI, is helping companies revolutionize the way they interact with their customers and enable them to achieve their share of online success. This revolutionary technology enables brands to step up their game by providing what customers demand: personalization.

Introducing AI-powered Personalization

AI has long since grown beyond the minds of fantasy writers and science fiction movies. Yet many brands still fail to realize their true potential, limiting their growth.

We don’t just live in the age of AI. The world has successfully entered the era of advanced AI.

Today, brands use artificial intelligence to customize their offerings, personalize experiences and increase sales. With the rapid adoption of AI-powered personalization, many e-commerce companies are looking forward to shaping a brighter, more successful online future.

AI-driven personalization uses machine learning, deep learning, natural language processing, etc. to personalize a brand’s marketing messages, content, products and services. This technology is reshaping the way brands interact with their customers and preparing them for more profitable customer journeys.

All types of personalization are inherently rooted in data.

The point where AI comes in is its ability to mine, read, and draw conclusions from massive amounts of data. Brands with deeper access to data can personalize more accurately. And by doing so, they can deliver optimal customer experiences, the crux of all modern business-customer interactions.

How AI-powered personalization is helping ecommerce businesses

AI-powered personalization has multiple use cases within the e-commerce industry. And when it uses its full potential, it leads to numerous benefits which we will discuss below.

Targeted Marketing: Lower Marketing Spend, Higher Revenue

Forty percent of customers prefer targeted ads tailored to what they are looking for to ease the buying process. This could be why behavioral targeting ads are: twice as effective as non-targeted ads. AI helps marketers run more targeted brand campaigns, ultimately helping them reduce marketing spend and increase revenue.

How does targeting increase sales? With AI working behind the scenes, your ad will reach people who are likely to take action somewhere later. This makes the ad impressions worth the money spent on acquiring them.

AI digs through significant amounts of data and provides better customer segmentation. It also helps create more impactful ads based on past ad performance. With these conclusions, marketers can reduce their ad spend by deliberately avoiding the ads that are nothing but money-guzzling pits. Additionally, AI helps create and deliver customized marketing content such as blogs, ad posts, CTAs, videos, and much more.

Numerous AI-powered reporting tools are available that collect, sort, and pull valuable insights from audience data to help you better understand your customer.

Once you know your audience is more receptive and responsive to a certain type of content — for example, video tutorials on written blogs — spend on creating the former and avoid spending your marketing budget on the latter.

A SaaS startup has deployed AI to customize its marketing messages. The company personalized the images sent to their subscribers via email, and as a result, the CTR of their opened emails increased four times.

That’s why personalization is important.

Despite all the benefits of targeted marketing, 76% of marketers do not use behavioral data to run targeted advertising campaigns. This statistic points to the opportunity for brands to adopt AI-powered ad personalization and gain a competitive advantage.

Personalized product recommendations increase order value

If you’re an ecommerce merchant, you want your existing customers to keep buying from you because we know that upselling to existing customers is more profitable than acquiring new ones.

AI-powered personalized product recommendation helps you do that. When your customers visit your website, the AI ​​algorithm picks up their buying behavior, past transactions, demographics, interests, and other such data. With this information, the website presents relevant and unique suggestions to the visitor, increasing their chances of buying more than they came for.

Put yourself in the shoes of your customers to understand this concept.

Suppose you are looking for new clothes and you finally find some shirts that you like in a clothing store. While considering one of these shirts, the webpage starts by recommending some nice pants to go with it. You suddenly feel that these pants go well with the shirts you like. This whole process brings the convenience of ordering both items from the same store, which is why you add the pants to your cart. This is how personalized product recommendations increase order value, which ultimately translates into your revenue.

A London shoe store experienced a 8.6% increasing the number of additions to carts after serving personalized recommendations that appeared when a customer added a single item to their cart.

Personal touch: Excellent customer service via chatbots

Personalization is only part of building a great customer experience. Providing excellent customer service is the other side of the coin.

The modern customer is spoiled. Seventy-five percent of customers expect to be helped within five minutes.

AI-powered chatbots come to the rescue here. And before you dismiss this and say that robotic, monotonous responses are a thing of the past, know that the chatbots we’re talking about today run on advanced AI. These chatbots are programmed to imitate as many people as possible and are not limited to generic, scripted, rules-based conversations.

Modern AI chatbots use NLP, sentiment analysis, and other AI techniques to understand not only the meaning, but also the context, emotion, and nuance behind each question. By doing this, they can have a more resounding and contextually accurate conversation with the customer and solve their problems.

When a chatbot provides a tailor-made answer to each unique question, this one chatbot becomes enough to offset an army of customer support representatives. These chatbots not only provide a pleasant user experience, but also allow customers to enjoy the “self-service” they prefer. It solves their problems without making them wait for human reps and can lead to more lead generations and conversions.

A public transport company serving thousands of customers every day, increased its bookings by 25% and saved $1 million in customer service within a year of implementing a chatbot designed as a customer support representative.

Optimized search leads to a better customer experience

Optimized search learns from customer buying behavior and past searches to adjust search results in real time.

Optimized Search also uses NLP to understand the nuances of human language and display accurate results. For example, it understands that “running shoes” and “running shoes” both mean the same thing and would therefore produce similar results. When customers encounter the results they want to see; they are more likely to be happy with your service. And it’s the customer experience we’re after, isn’t it?

Last words

Customers today switch loyalty based on the experiences brands provide. AI-powered personalization helps you offer tailored services, deliver relevant content to customers, and enjoy more profitable business relationships. But beyond all of its benefits, advanced AI adoption has its complexities. It can be expensive and may require training.

However, these complexities can be worth the results you are likely to enjoy after the successful implementation of AI.

Atul Jindal is a specialist in web design and marketing.