AI helps handle post-Covid ecommerce explosion, says EY
Ecommerce sales in both B2B and B2C sectors have been steadily increasing for years, reports the US government’s International Trade Administration (ITA). As the ITA points out, the overlap between the two is significant – they share many of the same consumers as “only day jobs separate the two identities”.
But the appearance of Covid-19 and the national lockdowns that followed gave total global retail sales from 2019-2020 an added boost, resulting in an 8% growth in retail ecommerce sales worldwide, forecast to continue to 2024. The cultural change has taken hold, it appears, and previously sceptical consumers have made the shift online in an enormous wave of new business.
This has compelled retail businesses to adapt fast and find existing and new technologies to cope with such enormous customer demand. Artificial intelligence (AI) and machine learning (ML) are part of this global industrial response, explains Michael Renz, EY Global Retail Technology Leader.
“The pandemic was a significant accelerator for eCommerce in general,” says Renz. “Customer segments who hadn’t been intensive online shoppers before were forced to order online, particularly during lockdowns. This unplanned business heavily accelerated the growth of revenue in the eCommerce sector.”
AI allows companies to personalise the experience for any potential or existing customer across all channels, based on the creation of detailed profiles and predictions on which products or services are most relevant to them, explains Renz.
The replacement of keyword-based search with voice- or image-based search is helping casual consumers find the products they’re looking for faster. Renz points to social media platforms which allow customers to find relevant products based on images they have taken with their phone or added to their library. The user journey is being shortened.
Natural Language Processing (NLP) has emerged as another area of attention, but it attracts some controversy. Using this technique, merchants can create meaningful descriptions for an enormous number of products or services with a vastly reduced reliance on creative human input.
Related natural language tools can be used in “conversational commerce”, which can involve chatbots directing customers to appropriate categories and products, or even answering specific questions from consumers like a “real-world” sales representative, decreasing reliance on human intervention still further.
“The combination of such technologies can decrease the time customers need to find the products and services they want, calling their attention to additional relevant offers, and reduce the shopping cart abandonment rate – all paying into increasing revenues,” explains Renz.
Creating one-to-one experiences with AI in shopping
In a roundtable discussion organised by Zenith Media and Campaign earlier this year to discuss the intersection of content and commerce, participants predicted artificial intelligence will be able to create personalised “one-to-one” experiences for the Metaverse generation.
“It’s a great time to start thinking about that right now,” said roundtable participant Keith Soljacich, Head of Innovation at Publicis Media. “There are considerations to start thinking about as we move into the next phase to enable that type of behaviour. Do they have an AI or virtual digital assistant that enables them to communicate with customers in real-time in immersive spaces?”
Soljacich’s colleague, chief commerce strategy officer Jason Goldberg, added: “As consumers spend more time in these immersive virtual worlds and gaming platforms, they want to signal the same things in the virtual world and that drives more value for luxury signalling rates. The concept of ownership is going to be quite interesting.”
But the ecommerce explosion hasn’t been all good news – the seismic shift to online shopping had a negative impact on costs for many retailers in the online business due to increased return rates, logistics and delivery costs.
“Reducing the volume of returns is key in any eCommerce with consumers,” explains Renz. “It helps to reduce cost, gain margin and - of course - to reduce the impact on the environment. Offering the goods customers really need and want in the right variant and size will largely avoid returns, and AI can help to make the right offers to clients.”