The Future of eCommerce: Could AI Shape The Industry’s Success?

The future of eCommerce is rapidly changing as we welcome artificial intelligence to the industry.

With the ability to streamline selling operations, segment customers in seconds, and forecast the future for growing online brands, AI has certainly hit the ground running amongst eCommerce business owners.

In fact, according to experts at Forbes Advisor, 64% of business owners believe that introducing AI technology to their eCommerce strategy will improve productivity and reinforce customer relationship management.

“AI is changing the way all businesses operate—retailers included. Whether it’s offering mail-order, relocating to a shopping mall, or launching an e-commerce site, merchants have long been integrating the next great innovation into their operations. AI is no different. It’s just a matter of determining where the technology fits and how it can best benefit the consumer and the business,” says Rhett Power, CEO and Founder of Accountability Inc.

With this in mind, we’ve jumped head first into what the future of eCommerce could look like with AI at the forefront of the industry’s transformation. The question is, will it be all good news for eCommerce business owners or pose some challenges moving forward?

Let’s find out.

The Rise of AI in eCommerce

There’s no doubt that the use of artificial intelligence within the eCommerce sector is on the rise in 2024

With over 78% of online store owners now claiming to have implemented the technology into at least one area of their selling strategy, it is becoming clear that most of the industry is adopting the new tech simply to stay afloat. 

The future of eCommerce looks competitive. As consumer demands for hyper-personalization, enhanced customer service, and fast-tracked global deliveries increase once again, store owners must work harder than ever before to provide their demographic with a positive user experience.

AI helps eCommerce store owners do just this. By automating the processes that would take time and energy, improving effective trend forecasting, and enhancing customer support hubs, AI provides sales teams with some breathing room to work on acquiring and converting leads.

By 2030, experts suggest that the market size is projected to reach a whopping $16.8 billion, growing at an annual rate of 15.7% CAGR. 

With the AI adoption rate not looking like it will slow down any time soon, let’s have a closer look at some of the benefits and challenges eCommerce store owners could see with the introduction of the technology.

The Benefits AI Could Have on the Future of eCommerce

There’s no doubt that AI could change your eCommerce strategy for the better. As we take a look at what the future of eCommerce could look like in the next ten years, there are plenty of reasons why AI stands out as the industry’s greatest weapon,

“In 2024, the e-commerce sector stands at a pivotal juncture, largely due to its early adoption of AI technologies. The impact of AI on e-commerce is poised to be monumental, offering unprecedented opportunities for innovation and growth,” says Richard Jones, Chief Revenue Officer of Wunderkind. “This optimism is echoed by industry leaders and research firms, identifying AI as a critical focus area for driving business strategy and innovation.”

From improved efficiency to accelerated productivity, here’s what we love about the role AI will play in the future of eCommerce success.

Improved Efficiency

AI helps eCommerce businesses automate tasks that would otherwise take hours. With the ability to take on repetitive tasks and divulge data in seconds, the introduction of AI in the workplace is likely to make your team faster, stronger, and more efficient.

Think of AI as a helping hand. With the ability to take numerous tasks off the to-do lists of sales representatives, think about how much more time they could spend nurturing and acquiring new customers.

Increased Sales

There’s no doubt that AI in the eCommerce sector helps business owners increase their conversion rate. With the ability to analyze and report on data from consumer interactions, AI helps forecast trends and map customer behavior in order to help your brand craft more personalized experiences for future customers.

In fact, the French eCommerce company Chronopost has seen an 85% increase in online store sales alone since introducing AI into its strategy.

More Accuracy

AI is also more accurate than human intervention when it comes to storing customer data and making financial and trend-based predictions.

AI can sift through customer data quickly and make accurate forecasts on the next steps to take financially as a business. These could include campaign directions and which areas of the business to spend on when looking to grow.

In fact, the adoption of AI can reduce human error by up to 50%, according to experts at McKinsey.

With more accurate forecasting based on much larger amounts of customer and market data, ecommerce businesses feel more secure investing their money in the company’s growth.

Reallocation of Resources

AI also allows a business to reallocate their resources. 

With AI able to automate tasks such as order fulfillment, customer service and even emailing, it helps leaders reduce their labor costs and reallocate their resources to other areas of the business that require renovation. 

Tools like ChatGPT are helping organizations in a wide variety of industries to accelerate workflows and increase productivity,” says Adrien Nussenbaum, co-founder and CEO of Mirakl.

E-commerce is no exception; we should expect generative AI to completely change the way companies create and optimize product descriptions and other content. There’s no going back.”

The Challenges AI Could Pose on the Future of eCommerce

While AI is likely to transform the future of the eCommerce industry for the better, it doesn’t come without its challenges for the sector.

In order for a business to successfully implement AI into its strategy, there needs to be a good infrastructure in place that is prepared to support it.

When a small business is not ready for AI, they tend to forget about factors such as data privacy, risk of content bias, and managing ever-growing consumer expectations. 

Here are some of the main challenges to consider before adding AI to your eCommerce strategy.

Data Privacy Risks

While AI uses an algorithm to help sift through customer information to help map trends and make predictions, it does, however, raise concerns over the privacy of consumer data.

You must have permission to collect consumer data as without this, you’re likely to lose trust and credibility within your demographic, and could find yourself on track for a lawsuit. 

AI also poses a security risk for the company’s internal data. There have been a number of accidental breaches and data leaks since businesses have adopted AI, so it’s important to have a powerful cybersecurity plan in place prior to investing in predictive tech.

A Hefty Initial Investment

There’s no doubt that AI-powered eCommerce tools are expensive to invest in. For smaller businesses, it’s not worth pouring your entire budget into AI if it leaves you with no funds to pump into your other business processes. 

Implementing AI involves buying the initial infrastructure, training up a new team of IT professionals, and, of course, the general maintenance of the software to keep it cyber-safe.

Losing the Human Touch

There have been a number of debates surrounding the loss of the human touch when it comes to investing in artificial intelligence.

While it is efficient at making business predictions and providing personalization, some believe that AI-powered chatbots, for example, are a step too far. 

Without the ability to provide the same level of support as a human customer service agent, you could lose your authentic connection with your target consumers and face more complaints from dissatisfied customers.

4 Ways AI Has Transformed The Future Of eCommerce

Now that we have talked about the positive and negative effects AI may have on the future of eCommerce let’s delve deeper into some of the ways in which technology hopes to transform specific processes within the industry.

Here are four different ways AI could aid your eCommerce business in 2024.

Powering Personalization for Demanding Consumers

One of the best use cases for AI in 2024 is personalization. With the ability to customize online shopping experiences to each consumer’s tastes and values, AI has become a secret weapon for brands that want to improve their targeting efforts. 

“Personalization, supported by data and analytics, is a powerful tool to strengthen the connection to the brand, win consumer loyalty, and draw customers into stores,” said experts at McKinsey in a recent report.

In fact, the same report found that over 71% of customers now expect to have a personalized interaction with a brand when shopping online in 2024.

AI uses customer data to segment leads into different target groups. In doing this, brands can create personalized experiences for each and every type of consumer within their demographic. This includes showing leads different products and services based on their search history and customizing the offers and discounts to each user’s needs. 

For example, styling service Stitch Fix uses AI to help analyze customer data in order to match each target lead with a set of styles and outfits that will best suit their preferences.

Stylist Generated Outfits vs Algorithmically Generated Outfits
Stylist Generated Outfits vs Algorithmically Generated Outfits

“We use OpenAI embeddings within our deep learning recommendation algorithms to interpret the textual feedback our clients share with us,” says the founders of Stitch Fix. “When a client requests a Fix, our algorithms interpret the information the client has shared with us about their fit and style preferences to surface a selection of recommended items to our stylists. 

This enables stylists to easily curate pieces for the Fix instead of manually sorting through the thousands of pieces in our inventory.”

Automating Customer Service

When we think of AI in eCommerce, we think about chatbots and virtual assistants. As one of the most common use-cases of AI in the eCommerce industry, AI-powered customer support has become popular amongst growing online brands.

Chatbot functionality is constantly improving. Today, AI-powered chatbots can help determine the needs of shoppers after just one interaction and respond with human-like dialogue that guides consumers to the checkout.

According to experts at Statista, over a third of online shoppers deem chatbots to be very effective in helping them answer questions they have about the brand or one of its products.

Some chatbots, such as the one used by Sephora, take customer support one step further.

Sephora AI Chatbot
Sephora AI Chatbot

Sephora’s chatbot, for example, approaches customers with a short style quiz to help determine their product preferences before showing them a number of options to shop that match the shades and styles they are looking for.

Streamlining Business Operations

AI continues to streamline business operations. While it is known for creating creative, generative content and aiding customer service, it has since extended its use to other aspects of an eCommerce business, such as stocking and managing financial forecasting. 

“The rise of AI and GC in E-commerce has further extended to other aspects of business operation and management. From inventory management and supply chain operations to customer service and marketing, AI-powered solutions are streamlining processes and improving profitability,” says Jeff Li, CEO of Shoplazza.

“For instance, retailers can leverage AI-powered inventory management systems for improved stock control, thereby reducing instances of overstock and stockouts and enhancing customer satisfaction. In logistics, AI-enabled systems can enhance conversion rates, reduce delivery times, and improve customer experience.” 

Let’s talk about pricing strategies, for instance; rather than simply pricing products based on loose market research and competitor benchmarks, AI removes the guesswork, using smart algorithms to predict future demand patterns and even seasonal fluctuations within the market.

Improved Store Ranking

Search engine optimization, otherwise known as SEO, is essential for eCommerce business owners. In an era of intense online competition, receiving the highest search engine ranking for your store is crucial.

Did you know that AI can also help aid your eCommerce SEO efforts? Introducing predictive SEO to your site strategy is a great way to identify trending content and keyword topics ahead of the curve. AI-powered SEO tools analyze ongoing competitor success and compare that with demographic search trends to provide you with a forecast for your next campaign.

Better still, AI can also enhance your backlinking strategy. Instead of buying backlinks blindly, You can use an AI-powered Backlink Matcher to identify websites with a similar domain authority, target demographic and content where your backlink could be inserted naturally.

AI Backlink Matcher
AI Backlink Matcher

Here’s a great example of an AI backlink matcher from Rock Content. You simply input keywords and topics you want to find results for and then sit back and let AI do the work.

Key Takeaways from the Future of Ecommerce

The future of eCommerce is certainly heating up, and we’re 100% sure it’ll undoubtedly be digital.

However, with AI’s new influence on the industry, we expect that it’ll also be more intelligent and engaging for tomorrow’s online shoppers.

Enhancing everything from customer service to hyper-personalization, we’re excited to see what direction the eCommerce industry will go with AI now driving it forward.

Picture of Edgar Abong

Edgar Abong

Edgar is a skilled software developer with a passion for building and evaluating software products. His expertise in software development enables him to provide in-depth evaluations of software products. He can draw out insights about features, functionality and user experience.

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