5 Ways Generative AI Is a Game-Changer for Ecommerce

Summer’s here, and your customer is planning her first camping trip. When she visits your online store, a GPT-powered digital concierge pops up and she asks it what camping gear and clothing she’ll need. Using data like purchase history, available inventory, and the weather forecast for her destination, the concierge suggests products in her preferred sizes and colors. Summer vacation? Sorted, with a little help from AI.

AI has been improving ecommerce for years. But now, the use of generative AI in ecommerce is revolutionizing customer experiences. It’s also increasing productivity, conversions, and customer loyalty. While use cases for generative AI in ecommerce are still emerging, here are five examples of how the technology is being applied today.

1. Personalize your product recommendations — even more

Although AI-powered product recommendations have been part of the online shopping experience for a long time, generative AI adds even more nuance and makes the entire process feel more bespoke. Generative AI allows better targeting and more refined personalization, helping you create relevant experiences faster and with more context. 

The best AI platforms let you get highly relevant personalization at the individual customer level without having to create a separate model for each customer. Even better? By incorporating user feedback, AI-based recommendations and personalization become smarter over time, leading to increased conversions and higher customer satisfaction.

2. Make product discovery effortless

In brick-and-mortar stores, sales and service agents are your biggest asset, able to pick up on cues from customers as they shop, and suggest appropriate products. Thanks to generative AI, this can happen online, too. Digital concierges that help shoppers discover products let you offer white-glove service at scale. This service will feel more comfortable due to the natural-language capabilities of generative AI, and can open new doors to customer loyalty.

3. Make every user more productive

Whether you’re a merchandiser, marketer, or ecommerce manager, generative AI in ecommerce can help you save time. Retailers can automate routine tasks and increase sales with GPT-powered product descriptions, smart promotions, and more. Time-intensive tasks that once required manual configuration, like creating new promotions, can be automated at scale. And generative coding can help teams innovate faster.

AI can also uncover insights and make recommendations to help teams reach strategic goals. Want to clear out dead stock and make way for new merchandise? Improve your abandoned cart strategy? Generative AI can suggest promotions, price points, and marketing messages to help you achieve your goal. Need to boost average order value? AI insights can recommend proven strategies that can increase add-to-carts and improve revenue.

4. Enhance post-purchase operations

Expedited shipping. Self-service order tracking. Easy returns. With ecommerce technology, these services have become table stakes. Now, generative AI will bring a new wave of optimization to inventory management.

For example, inventory managers can train AI on returns reports and customer reviews to fine-tune product descriptions and decrease return rates. Route managers can use AI to map out more sustainable delivery routes. And operations teams can have AI analyze shipping and fulfillment data to determine more efficient and cost-effective ways to source and ship items.

5. Improve fraud detection

Fraud detection is a critical part of ecommerce, but scammer tactics are always evolving and increasing in sophistication. In fact, the average organization loses 5% of its annual revenue to fraud each year.

AI’s predictive capabilities can learn scamming behavior and become smarter than the bad actors. The data points gained in this process can help payment solutions teams improve their fraud detection and target malicious activity without impeding legitimate purchases.

Your AI is only as good as the quality of your data

Ready to try generative AI with your ecommerce site? To reap the benefits of this technology, make sure all your company’s data is in one consistent format. Once your data is harmonized, it can be used to fine-tune an existing large language model (LLM) — an AI algorithm that uses deep-learning techniques and large data sets to understand, generate, and predict new content — to enable generative intelligence. 

The best AI platforms will let you deploy your business’s transactional, product, order, fulfillment, and other commerce data — along with your customer relationship management software (CRM) and any third-party data — to get a 360-degree view of your customer. And they’ll do it while ensuring strict data security and privacy controls. That data will then provide opportunities for automation and growth, personalization, and actionable insights.

AI in ecommerce: Transform your customer experiences — and your business 

Generative AI in ecommerce is still an emerging field, but early adopters are already seeing benefits in time savings, customer satisfaction, and revenue gains.

For customers, a tailored experience increases shopper loyalty and enhances your brand’s reputation. By replacing search with a conversation — something customers still want — AI’s predictive intelligence guides customers to products they’re likely to enjoy, and relieves them from sorting through a jumble of search results. In fact, 69% of customers are open to using AI to improve their experiences.

For businesses, generative AI technology can make teams more productive in product and content development, allowing them to focus on more strategic work and roll out innovations faster. And the added business insights from vast amounts of data can help you more deeply understand your customers.