How Generative AI is Transforming eCommerce

Generative AI is set to transform the world of marketing. The rapidly growing technology will boost marketers in several ways, especially in the creative process, helping marketing teams generate ideas and content to better engage with leads and customers.

The effects of Generative AI are already felt in the marketing world. A recent Deloitte survey revealed that 26% of surveyed marketers already used generative AI, while another 45% intended to use the technology by the end of 2024.

Introduction to Generative AI

Generative AI Refers to artificial intelligence systems that can generate new content, such as text, images, audio, and video, based on what they have learned from analyzing large amounts of data. Unlike traditional AI, which primarily focuses on analysis, Generative AI Takes a creative approach to producing novel and original outputs.

Some of the most well-known examples of Generative AI include systems like DALL-E and Stable Diffusion for generating images, ChatGPT for generating text, Claude, an AI assistant built for work, and tools like Udio and Jukebox that can generate music. These systems are trained on massive datasets – for example, DALL-E 2 was trained on millions of image-text pairs from the Internet to learn relationships between images and text descriptions.

Deep learning and neural networks are the fundamental techniques behind many Generative AI Systems. By exposing these neural nets to massive datasets, AI can recognize patterns and relationships within the data. The trained model can then take a text prompt, image, or other input to generate a new creative output based on what it has learned from its training data.

Over the past few years, Generative AI’s capabilities have increased thanks to advances in deep learning, the growth of training datasets, and advances in computing power through Graphics Processing Units (GPUs) and cloud computing resources. Generative AI holds tremendous potential for automating and augmenting creative work across many industries.

Benefits of Generative AI for eCommerce

Generative AI has immense potential to transform and improve the eCommerce experience for businesses and customers. Here are some of the key benefits Generative AI offers your eCommerce business:

Personalization

Generative AI Allows for hyper-personalization at scale. Generative AI Systems can understand customers’ unique interests and preferences by analyzing customer data and behavior. It can then generate personalized product recommendations, custom content, and tailored messaging for each customer. This creates a unique and customized shopping experience for each customer, often resulting in a stronger connection to the brand.

Automating Repetitive Tasks

Many eCommerce tasks involve repetitive tasks, such as content creation, ad generation, and customer service. Generative AI excels at automating these types of tasks. For example, Generative AI can instantly generate unique, high-quality descriptions customized for each product instead of manually writing hundreds of descriptions. This frees up a team’s time for more strategic work.

Generating Ad Creative

Crafting new display ads and testing different creative versions is a constant task in eCommerce. Generative AI can instantly generates hundreds or thousands of new ad images and videos in various formats. This enables rapid iteration and testing and allows the discovery of the highest-performing creative versions.

Forecasting Demand

Generative AI models can analyze past sales data, search keywords, and external signals to forecast product demand. This allows eCommerce companies to plan inventory levels better and prevent over or under-stocking items. More accurate demand forecasting leads to smarter supply chain and production decisions.

Improving Customer Service

One of the most valuable short-term uses of Generative AI is handling customer service. Over time, customer service inquiries can become repetitive for agents. With generative AI, many common questions and conversations can be automated, thus speeding up response time and freeing up customer service agents’ time to handle more complex issues. Further, generative Aichatbots can create more personalized and natural conversations with customers based on instant recall of a customer’s history.

In summary, Generative AI delivers tremendous scale, automation, and customization. This translates to better experiences for shoppers and significant operational efficiencies for eCommerce businesses. Leveraging Generative AI is becoming a competitive necessity in modern eCommerce.

Improving Product Discovery

Generative AI has the potential to transform product discovery in eCommerce. One key application is using AI to generate engaging product descriptions automatically. Rather than relying solely on human writers, AI systems can analyze product attributes and customer reviews to create unique, descriptive copy for each product. This ensures every item has an optimized description tailored to shoppers’ searches.

AI can also auto-tag products based on details like color, style, material, etc. Shoppers can then filter products by these tags to narrow their search. Generative AI further identifies latent connections between products that manual tags may not capture. This allows for an intelligent tagging system that offers each shopper unexpected but highly relevant products.

Finally, Generative AI powers more personalized recommendations. AI can suggest products that match their taste based on an individual’s browsing history and purchase patterns. This is far more effective than a generic “recommended for you” section. As the AI learns more about each customer, the recommendations become increasingly tailored. This helps consumers discover products they love but may not have found independently.

Overall, Generative AI has immense potential to enhance product discovery through automated descriptions, smart tagging, and hyper-personalized recommendations. This leads to a better customer experience and higher conversion rates. Brands that leverage AI for product discovery will have a key competitive advantage in eCommerce.

Automating Content Creation

Generative AI can be used to automatically generate various types of marketing and product content for eCommerce businesses. This includes:

Product Descriptions

AI can generate unique product descriptions for each item in an online store’s catalog. The AI can take the product title, image, specs, and other details as input and output a descriptive paragraph summarizing the product and highlighting its key features and benefits. This saves eCommerce content creators from manually writing thousands of product descriptions.

Blog Posts

eCommerce brands can leverage AI to create blog post drafts on relevant topics that engage their audience and attract organic traffic. The AI can take a given blog post title or topic as input and generate multi-paragraph articles with unique commentary and insights. Our content writers can then edit the drafts before publishing.

Social Media Captions

Social media marketers can find it tedious to generate custom social media captions for each product. AI tools can instantly create engaging Facebook, Instagram, Twitter, and Pinterest captions customized for each product to accompany social posts. This makes it easy to showcase products and maintain social media accounts.

Emails

“Klaviyo’s Generative Aisaves a ton of time,” says Alex Case, senior manager of product planning at Proozy—to 45 minutes per day.

Personalized and relevant emails lead to higher open and clickthrough rates. With AI, unique emails can be created at scale by generating customized subject lines and email bodies tailored to each subscriber segment. Transactional emails like cart abandonment emails can also be autogenerated for every abandoned cart case.

By leveraging content creation with AI, we save eCommerce businesses time and money by producing more customized and targeted content that allows you to focus on your business operations. Gen AI enables scaling content production without sacrificing quality or relevance.

We have leveraged Klaviyo’s AI features to achieve great email marketing results.

Generating Ad Creative

Generative AI has massive potential for creating custom ad creatives for eCommerce stores. Rather than relying on stock images and video, AI can generate unique and engaging visual assets tailored to your brand and products. This allows us to produce an endless stream of high-quality, customized images and video ads at a scale.

DALL-E and similar AI image generators can create product photos, lifestyle images, and video clips based on text prompts for visual assets. The AI can match your brand style, incorporate your product in context, and generate countless fresh visuals on demand. We can iterate quickly to refine the visuals until they perfectly convey your brand messaging.

AI copywriting tools like Jasper.ai and Copy.ai can generate on-brand ad headlines, body copy, and captions tailored to each product. The AI can optimize for tone of voice, messaging, and keywords, automating the process of drafting high-converting ad copy for your business.

With Generative AI, we can produce thousands of tailored visual and copy ad variations. This allows the AMP agency to test and refine creative, continually driving better campaign performance. What’s impressive is that the generated assets will be completely original and on-brand, unlike generic stock creative. Overall, Generative AI unlocks unlimited personalized and optimized paid ad creative at scale.

Personalization

“48% say AI has significantly increased their performance.” – By Klaviyo

Generative AI allows eCommerce businesses to provide a hyper-personalized experience by tailoring content and recommendations for each user. Generative AI models can understand individual customers’ shopping preferences and interests by analyzing past purchases, browsing history, and demographics.

Retailers can then generate personalized product recommendations, custom landing pages, and tailored marketing messages for each visitor. This creates a customized shopping experience as if the website was designed just for them.

For example, an outdoor apparel company could highlight hiking products for customers who often browse those items. The business could display relevant hiking content and testimonials on the homepage to entice the visitor.

Email and push notification content can also be adapted using generative AI. The models can write subject lines and message copy that speaks directly to what each subscriber wants to hear about. Of course, our content writers edit and refine the content, but Generative AI can help make every communication feel more targeted.

Generative AI takes personalization to the next level. Instead of relying solely on basic segmentation, it enables true one-to-one personalization powered by a deep understanding of each individual. This results in higher engagement and conversion for eCommerce businesses.

Forecasting Demand

Generative AI holds great promise for accurately predicting customer demand and inventory needs for eCommerce businesses. Generative models can generate highly accurate demand forecasts by analyzing past sales data, search trends, seasonality, and other signals.

Some key ways Generative AI can improve demand forecasting include:

Analyzing historical sales data to identify patterns and trends. The models can detect seasonal peaks, best-selling products, frequency of repeat purchases, and other insights.
Processing consumer search and browsing data to understand emerging interests and changes in demand. Generative models can quickly increase demand as people search for certain products online.
Accounting for promotions, pricing changes, and other business factors that impact sales. The AI can model the influence of different marketing and merchandising levers on products.
Predicting out-of-stock risks for products based on forecasted demand and current inventory. Generative models can alert teams to SKUs that may sell out soon.
Providing granular forecasts segmented by product, region, channel, customer segment, and other dimensions. This supports more targeted inventory planning.
Continuously updating forecasts based on the latest sales data. Generative models improve over time as they ingest more transactional data.

Overall, Generative AI has the potential to provide eCommerce businesses with greater accuracy, automation, and speed in predicting customer demand. This allows merchants to optimize their inventory and avoid costly out-of-stock. Continued advances in generative models will further enhance forecasting capabilities for eCommerce.

Improving Customer Service

Generative AI can be a powerful tool for improving customer service in eCommerce. By leveraging large language models, businesses can automate responses to frequently asked customer questions and provide 24/7 support.

One major application is using AI to answer common customer FAQs. An AI assistant can be trained on past customer inquiries to understand and respond to new questions accurately. This allows customers to quickly get answers to basic questions without waiting for a human agent. The AI can provide consistent, high-quality responses at any time of day.

eCommerce businesses can also employ conversational AI bots to mimic human conversations. These bots can hold friendly text or voice-based dialogs to help customers with returns, track orders, get product recommendations, and more. With enough training data, they can understand context and intent to feel more natural. This provides the convenience of automated support with a human touch.

Having an AI assistant available around the clock improves the customer experience by reducing wait times and frustration. Customers get quick resolutions rather than waiting on hold or exchanging multiple emails. It also frees up human agents to focus on addressing more complex issues.

The key to success is training the AI with enough data to handle various possible customer inquiries. While not a complete replacement for human agents, AI-powered customer service can accelerate responses to common questions and enable 24/7 availability. This can increase customer satisfaction and loyalty.

Challenges of Implementing Generative AI

Implementing Generative AI can be challenging for eCommerce companies. Here are some of the main challenges to consider:

Data Quality

Generative AI Models are only as good as the data on which they are trained. If the training data is biased or poorly quality, the outputs will reflect that. eCommerce companies need massive amounts of high-quality, labeled data to train Generative AI Models effectively. Collecting and cleaning this data requires substantial investment. Hence, we at AMP prioritize data quality, sources, and integrity.

Biased Outputs

Despite best efforts, Generative AI models can inherit and amplify societal biases in training data. For example, a generative fashion model could perpetuate offensive stereotypes if not adequately monitored. AMP agency rigorously tests Gen AI for biased outputs before deployment.

Legal and Ethical Concerns

“65% percent of companies are very or extremely concerned about intellectual property or legal risks of using generative AI.” – By Deloitte Digital.

Using Generative AI to impersonate real people or generate offensive content raises legal and ethical issues. There are also intellectual property concerns around AI-generated content. eCommerce companies must establish policies and safeguards to avoid harmful uses of generative AI. AMP ensures all content, including AI, goes through our legal department for review and approval before implementation.

Costs

Developing and implementing Generative AI capabilities requires significant upfront investment. The computational power needed for large generative models is expensive. For smaller eCommerce companies, the costs may outweigh the immediate benefits. More prominent players with more resources are better positioned to absorb these costs.

Future Outlook

Generative AI is poised to transform eCommerce in the coming years as technology advances rapidly. Widespread adoption is expected within the next 3-5 years as companies invest heavily in integrating Generative AI into their operations. Here are some key innovations and predictions for the future of Generative Aiin eCommerce:

Mainstream Adoption of ChatGPT-like Tools

More conversational AI tools like ChatGPT will become commonplace for customer service, product recommendations, and content creation. These AI assistants can have natural conversations and complete tasks to assist customers and internal teams. Their capabilities will far surpass today’s chatbots. Recent studies show a noticeable increase in the use of AI bots, i.e., ChatGPT, Gemini, and Copilot, in decision-making.

“Copilot had the highest level of accuracy (median: 5), according to the raters, followed by Gemini (median: 3), and then ChatGPT-3.5 (median: 2). – Biochemical laboratory data study

Hyper-Personalized Experiences

Generative AI will enable stores to deliver truly customized shopping experiences. From tailored product recommendations to personalized marketing, customers will feel like they have a personal shopper guiding their journey.

Automated Content and Design

Brands will rely on AI to effortlessly generate any content or design assets they need, including product descriptions, blogs, social posts, ads, and web pages. This will free up humans to focus on more strategic work.

Predictive Inventory and Demand Forecasting

Generative models will analyze countless signals to provide highly accurate demand predictions down to the SKU level. This will optimize inventory and supply chains to avoid out-of-stock and overstock.

Voice Commerce Growth

“Another game changer on the horizon is the concept of Search Generative Experience (SGE)” – By WSI.

Voice-enabled smart devices will spur massive growth in voice-based shopping. Generative AI assistants will deliver a frictionless and conversational commerce experience through voice commands.

In summary, Generative Aipromises will reshape eCommerce in the coming years. While adoption is still early, rapid innovation makes AI assistants, content creators, and predictive engines indispensable to tomorrow’s shopping experience. Brands that embrace this technology will gain a distinct competitive advantage in their markets.

Want to transform your eCommerce business by leveraging Generative AI?

Contact amp

How Generative AI is Transforming the eCommerce Shopping Experience

Introduction to Generative AI