A (Somewhat Late) Deeper Look at the Coming of Generative AI to the eCommerce World

  • Posted by: Recode

Over the past year, large language models (LLMs) are attracting public opinion and heating up the discourse. There is particular interest in the ability of LLMs to generate human-like responses using massive data. 

As generative AI solutions like ChatGPT dominate the airwaves, the focus turns to their use cases across industries, including the eCommerce sector. In the highly competitive retail domain, 80% of customers view customer experience (CX) as the “key differentiator” – more than the offered products or services.

So, it’s safe to assume that more eCommerce sites are looking at generative AI to improve their CX and offer personalized services, and understandably so. For instance, the “friendly” chatbot (powered by generative AI) can increase customer sales and transform overall customer service, making it more engaging, faster, and smarter. It’s no surprise that the value of generative AI in the eCommerce domain will increase to $2,123.6 million in 2032 (from just $529.5 million in 2022).

Benefits of Generative AI in the eCommerce Industry  

Right from automating manual tasks to improving sales, generative AI is set to influence the eCommerce domain. According to Juniper Research, retail sales from chatbot-based interactions will touch $112 billion by the end of this year.

Here are some of the ways generative AI can transform the eCommerce sector:

1. Delivering Relevant Search Results

Generative AI in eCommerce utilizes “recall and rank” algorithms to deliver relevant search results to online shoppers. By combining natural language processing and machine learning, generative AI can analyze the shopper’s online behavior and understand the context behind their search queries. This enables eCommerce sites to understand and adapt quickly to changing customer demands.

2. Enhancing Product Recommendations

Speaking of personalization, eCommerce companies have realized the benefit of providing product recommendations to online shoppers. Generative AI simply elevates it to the next level. Generative AI tools can analyze each customer’s shopping preferences, previous purchases, and browsing behavior. Besides improving product discoveries, generative AI-powered recommendations can improve the shopping experience and engagement. 

3. Resolving Customer Queries

Generative AI in eCommerce can transform customer support by automating repetitive or time-consuming tasks like issuing support tickets. Using sentiment analysis, generative AI chatbots can analyze customer interactions and categorize their issues. They can automatically address customer issues and enable faster resolution.

4. Improving eCommerce Content Generation

Most eCommerce shops rely heavily on online content in the form of product descriptions. With the right training and under human oversight, generative AI models can replicate the voice and style of the brand and help in pushing out relevant content. For example, ChatGPT-esque tools can generate personalized emails for each customer based on previous interactions.

Use Cases (or Applications) of Generative AI in eCommerce

The use of generative AI is not restricted to product recommendations and chatbot-based interactions. Here are some additional use cases or applications of generative AI in the eCommerce sector:

1. Virtual Assistants

Besides relevant product recommendations, generative AI tools can serve as virtual assistants for online shoppers. For instance, they can answer their queries and help them find the right product for their needs. An example of this is the Shop mobile app from Shopify. Similarly, Instacart is also integrating ChatGPT to enhance its search functionality and answer conversational queries.

2. Product Images

In the eCommerce domain, generative AI is also being used to generate high-quality product images. AI-generated product images are useful on eCommerce product pages and for effective advertising. An example of this use case is that of Heinz, which utilized AI technology to display an image of its ketchup bottle. Similarly, Nestle used an AI version of its Vermeer painting to promote its yogurt brand.

3. Fraud Detection

Generative AI models can also detect any anomalies in customer behavior which is indicative of fraudulent activities. They can prevent fraud by identifying fake images, videos, and even identities. One real-life example is the role of generative AI in detecting credit card fraud through anomalous data patterns.

4. Product Descriptions

Among the significant applications, generative AI is capable of generating accurate product descriptions by analyzing product data. Typically, product data or information includes its features, benefits, and specifications.

An example of this use case is the AI-powered platform, Phrasee, which can analyze product features and automatically generate a detailed product description. Another recent addition is the Shopify Magic tool (from Shopify) that can write engaging descriptions for eCommerce stores.

How Recode Solutions Can Help with Generative AI

The transformational role of generative AI tools will continue to magnify in the eCommerce sector. As AI models advance, eCommerce companies can expect to leverage this technology for more innovations and developments. For the best outcomes from AI investments, eCommerce companies need the right technology partner with experience in the digital commerce space.

At Recode Solutions, we enable retailers to realize business value from their AI investments. Here is what qualifies us as the right partner for your eCommerce requirements:

With our “customer-first” approach, we can facilitate digital transformation while you stay focused on your business. Want to know how? Contact our team today!

Author: Recode

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.