Since the launch of ChatGPT, Artificial Intelligence has become one of the most searched terms on the Internet. While there is significant buzz (and in some cases, speculation) on AI’s potential to bring about numerous positive changes in society, including enhanced productivity, improved healthcare, etc, the benefits it brings to the ecommerce industry appears to be more imminent.
Retail as a whole is looking for ways to deploy generative AI to support operations and enhance the customer experience. Certainly there are doubts and ethical concerns related to the use of AI in ecommerce, such as data privacy and potential misuse of sensitive personal information. Nevertheless, we will proceed with an open mind, to explore five ways that businesses can harness the power of AI to improve their ecommerce user experience. We will also provide a realistic point of view on the possible use of ChatGPT – can it actually help?
Personalized Customer Experience
In today’s competitive ecommerce landscape, providing a personalized customer experience is crucial for success. Often, businesses miss the opportunity that is presented to them in the form of analytics of the user’s browsing and purchase history. They fail to take advantage of this data in order to finetune their product recommendations, along with other facets of the customer journey.
AI-driven personalization could offer a more efficient way to curate a unique experience tailored to each individual shopper, and ultimately to increase customer engagement. Here’s an example – consider an AI-powered system that can identify a customer’s preference for sustainable products. The system could then:
- showcase eco-friendly options on the homepage or as a pop-up recommendation
- recommend sustainable alternatives to items in the user’s cart
- draft targeted emails featuring environmentally friendly products.
Can I use ChatGPT for ecommerce personalization?
Certainly! ChatGPT can help you create product descriptions and social media campaigns that are unique, compelling, SEO-optimized, and error-free. It could also be used to generate dynamic placeholder text in email marketing templates or to craft engaging content based on each specific customer profile. With good prompt engineering, you can train the model to adapt its output based on your brand style and other requirements.
Chatbots and Customer Support
Easily one of the most commonly discussed topics when it comes to the use of AI in ecommerce, we cannot leave out the application of AI-powered technologies in customer support.
Chatbots are nothing new. Automated virtual assistants already exist in ecommerce sites, providing instant responses to common queries, help with post-purchase concerns, all while reducing the need for human intervention. However, we’ve no doubt encountered our fair share of chatbot fails:
- limited / static responses
- don’t understand natural language (slang, misspelled words)
- unable to answer multi-part questions
- unable to make decisions based on specific queries
This often means your customers are left without a solution, and have to go through more steps to contact your support team.
We’ve previously touched on how businesses can leverage natural language processing (NLP) and machine learning for a better online search experience. Expand this to an AI-powered chatbot, where the flexibility and dynamism of such a tool could offer a user experience not seen before, mimicking even more closely what a human shopping assistant would do.
Imagine a chatbot that learns about a customer’s preferences and tastes over time, remembers, and adapts continually in order to provide tailored product suggestions and advice. Add on to that the capability of image recognition: the very same chatbot could help customers find products by analyzing images they upload, making it easier for users to discover items that they’ve seen but don’t know how to describe in text.
This level of personalization in customer support could make a significant difference in the way a customer perceives a brand, leading to increased brand loyalty, customer retention, and ultimately conversions.
Can I use ChatGPT as a Chatbot for my ecommerce?
Possibly. At this point of time, OpenAI does not have a specific integration tool to use GPT-3 or GPT-4 as a chatbot for an ecommerce store. However, it is possible to build a chatbot using the OpenAI API, which requires a good deal of technical expertise in the areas of web programming and machine learning. If you are interested to learn more about how to implement this or optimize other aspects of your ecommerce, don’t hesitate to book a free consultation with the Valido team.
Inventory and Supply Chain Management
One of the most critical aspects of ecommerce is the effective management of inventory and the supply chain. Any slip-up here can directly impact the user experience, causing delays, unfulfilled orders, and ultimately customer dissatisfaction. AI can play a significant role in optimizing this process.
AI systems can predict shopper behaviors and trends, giving businesses the ability to understand what products will be in demand and when. For example, an online fashion store could use AI to predict the demand for a specific style or color of clothing based on the current fashion trend data, historical sales, seasonal changes, and even social media trends. This predictive ability allows businesses to stock their inventory accordingly.
AI can also greatly optimize supply chain logistics. Machine learning algorithms can analyze vast amounts of data from different points in the supply chain to identify potential bottlenecks or delays. For example, an AI-powered supply chain system could identify issues affecting delivery routes (such as extreme weather conditions) or delays from suppliers, as well as suggest alternative delivery routes / suppliers. This ensures that customers receive their orders on time, leading to a better user experience.
Can I use ChatGPT to optimize my supply chain management?
Not really. As a language model, ChatGPT doesn’t have the capability to manage inventory or supply chain processes. However, it could be used indirectly to generate weekly inventory reports that highlights key trends and issues, to make it easier for decision-makers to understand what’s happening.
Dynamic Pricing
We all know that setting the right price for your products can make the difference between a sale and a lost customer. In particular, price personalization enables businesses to increase customer satisfaction and loyalty (although often neglected).
This is where AI can potentially step in, to offer ecommerce stores the ability to dynamically adjust prices based on a wide range of factors, optimizing for both competitiveness and profitability.
AI algorithms can analyze vast amounts of data to determine the optimal price for any given product at any given time. If implemented well, an AI-driven pricing strategy can incorporate all the important factors in its decision-making, such as:
- the time of day and day of the week
- the season
- the popularity of the product
- competitor prices
- the user’s browsing and purchase history.
It’s important to remember that while AI tools can support pricing decisions and automate tasks, it doesn’t replace the need for strategic thinking and understanding of the market. Ultimately, the business owner is responsible for ensuring that its ecommerce pricing mechanism aligns with the company’s overall business strategy and brand positioning.
Can I use ChatGPT to optimize my pricing strategy?
Maybe. ChatGPT can indirectly support the pricing process by analyzing and explaining the factors influencing the current price of a product, making the system more transparent and understandable to the business owner. It can also highlight the impact of pricing decisions on sales and profitability, helping business owners make more informed decisions.
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Customer Feedback Analysis
When you ask someone how they’re doing, a response like “I’m good” is almost expected, and doesn’t carry much weight in the ensuing conversation.
“But, the moment a person says, ‘I’m not doing well,’ it makes you say, ‘there’s something wrong for sure,’ and you begin to listen more closely,” said Hamed Qahri-Saremi, an assistant professor for Computer Information Systems in the Colorado State University College of Business. “Once you hear that negative information, it gives you more cues as compared to the expected positive information to make a decision. It changes your attitude more strongly.”
This same principle can be applied to ecommerce, where a single negative review alone can sway users from buying a product even when accompanied by hundreds of positive reviews.
So, how can AI play a part in customer feedback? Sentiment analysis.
AI can be used to crawl through large datasets of product reviews, in order to analyze and interpret the tone behind customer interactions and feedback. Not only can AI identify negative feedback quickly and efficiently, it can be used to aggregate findings and highlight areas where a product or service could be improved. This helps businesses understand the overall sentiment of a product, subsequently enabling them to continually refine their offerings to better meet their customer expectations.
Can I use ChatGPT when it comes to customer feedback?
To a degree. ChatGPT could be used as a conversational chatbot not only to provide support, but to collect feedback as well. Instead of rigid, survey-style prompts, a chatbot can interact with users in a more interactive and engaging way, leading to more detailed, nuanced feedback. As mentioned previously above, the implementation of ChatGPT for this specific purpose requires a certain degree of expertise in both ecommerce and the use of Artificial Intelligence.
Wrapping things up
There is little doubt that the application of AI has the potential to revolutionize the way we experience digital commerce.
However, the successful implementation of AI in ecommerce is not without its challenges. Along with the latest news on developments in AI, we also start to see issues that it carries along with it, such as ethical considerations, data privacy issues, and the need for transparency in AI decision-making. These are just some of the many obstacles to overcome – if not addressed, AI can even be a detriment to the overall user experience.
While tools like ChatGPT bring the power of AI within the grasp of online businesses, they still require a certain degree of technical expertise to be integrated effectively. Ecommerce and UX development experts, like the team at Valido, can help guide these businesses to make sure that AI solutions take all the challenges above into consideration.
The question is now not if, but when and how businesses will harness the power of AI to deliver a better ecommerce user experience.
Digital UX, writing about the latest ecommerce trends.