Over 1.6 billion consumers around the world spent approximately 1.9 trillion U.S. dollars shopping online in 2016. Technology is driving everything from data analytics to product innovation to business modeling. Some of the most interesting retail technology trends are evolving from artificial intelligence.
Product Recommendations and Bundling
Gone are the days when product recommendations could mirror what the customer already purchased. Today's recommendations are based on predictive analytics that determine the next product a customer should buy based on what all other users have bought in the past. Artificial intelligence (AI) enhances the intuitiveness of these product associations. It improves the accuracy of which items should be bundled together and whether it’s favorable to offer discounts. The insights created through recommendations from artificial intelligence provide valuable insights for both marketers and merchandisers by uncovering previously hidden variables and customer segments.
Shopping online at websites that fail to clearly categorize and properly organize products will create frustrating and disappointing experiences. Online retailers have traditionally manually mapped to logical landing pages and category pages, often resulting in a one size fits all approach. Amazon is one of the world’s largest and most successful retailers in the world, now larger than eight of the largest American retailers combined. Through billions of customer interactions, they have set a standard for personalized landing pages that combine knowledge of what a customer is likely to buy with the intent indicated when they clicked on an ad or search result. Personalized landing pages can improve conversion rates significantly, resonating with the shopper and reducing the number of clicks needed to purchase. The latter is especially important as more traffic shifts to mobile.
The collection of nuanced customer behavior in the big data era has evloved into deep learning technology. This involves software that learns to independently perform specific and complex tasks, like accurate voice recognition and analyzing detailed product image attributes to enable visual search. These innovations ease the friction that slows shoppers down when looking for what they need. The more interactions, the better the accuracy and understanding of intent. For example, retailers used to deliver search results solely on 10-12 points of metadata. With better imaging hardware and software like depth sensors, becoming standard on mobile phones, the number of data points used to match to a search is virtually limitless. The first widely available entrant should be the Google Lens, quickly followed by Apple's response on the iPhone 8. Innovative fashion firms are already enabling customization of products in store with similar technology. It won't be long before customers can design their own style and fit from the comfort of their living room.
The Google Neural Machine Translation (GNMT) system uses deep learning to produce more accurate and natural translations between languages. This actually allows computers to develop their own internal language to conceptually represent foreign words and translate them without English. Artificial intellence systems are similarly learning how to develop their own reference systems to help make connections from historical patterns, learned knowledge and variable factors. This means that artificial intelligence algorithms may soon be able to ignore product descriptions and create their own attributes to understand product similarities and generate recommendations. For example, a learning personalization algorithm may use trial and error to narrow down the identical aspects of similarly purchased products.
The power of AI-driven customization and programming allow fashion brands to gain new understandings of product attributes and their relationship with customer intent. Success will come to ecommerce players who are the most responsive to customer adoption of rapidly changing technology.
Onestop Internet is an end-to-end ecommerce solutions provider, researching and curating technology on behalf of leading brands in rapidly changing markets. Contact us to see how we can help your ecommerce business grow.