Artificial Intelligence in Online Shopping

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Author: Maggie Walsh

Artificial Intelligence (AI) is making its way into the lives and homes of modern consumers. And for good reason - the personalization that comes with increased data collection pays off for the retailer and the customer. Just look at the Echo’s effect on Amazon for proof. 20 million Amazon Echoes were sold in 2017. Echo owners spend 50% of their total online dollars on Amazon after purchasing an Echo, and increase their Amazon spending by 10% after purchasing an Echo (source: NPD Group Study). It’s a win/win. The customer gets a better experience, and the retailer gets loyalty and more comprehensive customer information.

AI is a fix for inherent online shopping issues in categories that require a more personalized fit - such as makeup or jeans. AI can be the difference between an abandoned cart and a click to purchase that the customer needs to get off the fence. Rugsusa.com has a feature where the customer can upload a photo of the room they are buying the rug for, and can test out any number of rugs in the space via photo. This feature can create confidence for an online shopper who feels uneasy making such a purchase without seeing the item first.

Everyone talks about Amazon, and how they are changing the retail landscape, consumer buying patterns, and their effect on brick-and-mortar. But because of these challenges, the winners in this economy are the brands/websites/retailers that differentiate themselves and provide customers with a personal experience in some way. This explains the success of subscription services. You can go into a subscription service and input your preferences and taste, and you will be provided a curated set of items sent to you. Some of this work is being done by actual stylists, but companies are becoming more tech savvy and creating algorithms to generate products based on your data. Something as simple as being able to choose from a range of colors or patterns make the buyer feel like they have a voice.

As technology continues to advance, so do the customer’s expectations. We expect ship times to be shorter, and for the things we buy online to work just as well as the items we buy in person. Try-before-you-buy has been a profitable business model for companies like Third Love, or Warby Parker, who sends each customer multiple options to try on at home before deciding which they want to keep. All of these examples point to a more confident and personalized experience for the customer. The biggest hesitancy in online shopping is the dread of receiving an item that doesn’t work for a litany of reasons. AI can help bridge that gap between online and in-person.

There was a time where people thought the internet was a fad, and wouldn’t compromise the newspaper, or music industries. The companies who adapt with the times and technology are the ones that will succeed. What is now a special feature, will be expected in the future – which is what will become of AI technology and the online shopping experience, in my opinion. I, for one, can’t wait until AI advances enough that I can skip the dreaded swimsuit try-on experience and buy one online that fits me perfectly.