Generative AI in Ecommerce: 17 Ways to Boost Your ROI

Generative AI in Ecommerce: 17 Ways to Boost Your ROI

Imagine: it is 2008, and most of your content comes from a trusted in-house marketing team member, or a valued freelance worker.

Topics must be discussed and approved, time must be dedicated to the writer in question in order to have content developed, and that content must then take additional time for review and eventual publication.

Fast forward to today, when artificial intelligence can be used to take a significant chunk out of the time in that equation, through the use of generative AI. 

What is Generative AI and How Does it Work in Ecommerce?

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Generative AI is a specific subset of artificial intelligence that allows users to create new content, ranging from text to images and videos, and even code. Although AI has long been used in machine learning and deep learning, to essentially comb through and assimilate existing content, generative AI differs substantially, in that generative AI tools like ChatGPT create the content, rather than going through and learning from existing content. While the AI of yesteryear was useful to minimize menial tasks, generative AI is able to learn from existing data in order to generate entirely new outputs. In essence, rather than simply analyzing or predicting (byproducts of existing content), it develops something entirely new. 

There are different types of generative AI models, the most common of which are Large Language Models (LLMs), and Generative Adversarial Networks (GANs). An LLM is a type of generative AI model that learns from and subsequently produces text only. This is used in the e-commerce industry in several ways, the most common of which are generating web content and generating customer engagement text, such as automatic responses to customer interactions. ChatGPT is the most well-known example of an LLM. 

A GAN is a type of generative AI model that uses an adversarial approach to learning. When the “learning” portion of GAN use is at play, this type of AI begins to learn how to effectively discriminate between real and fake (in the case of images, primarily). Over time, the model learns how to effectively “fool” itself, and is thus able to generate images that look real, or close to it. Understandably, this particular generative AI model is used primarily as a means of developing visual content, rather than text. CycleGAN is an example of a commonly-used model that can be found in MidJourney and other popular visual AI apps. 

Further Reading: AI vs Machine Learning: Why the Difference in Meaning Matters for Marketers

Benefits of using Generative AI in Ecommerce

Although we have briefly touched on the basics of generative AI, businesses are not always certain how to use this form of AI to increase customer satisfaction and improve their Ecommerce business. There are a few important benefits to using generative AI in ecommerce, the most pressing of which we have identified below.

Personalization

Using generative AI, a business is able to tailor shopping experiences to the individual needs and preferences of a given customer. This includes (but is not limited to) delivering product recommendations, accurate search results, and effective communication–all of which can increase customer loyalty. Ecommerce businesses can leverage AI to surpass the simplest personalization tasks in order to create unique experiences that resonate with customers and keep them coming back for more.  

Content Creation

Content creation can also improve customer experience by generating high-quality product descriptions, blog posts, and other marketing materials that capture your audience’s interest and encourage engagement, while remaining relevant to your target audience. Generative AI can also automate content creation in order to develop workflows that free up time and resources for initiatives that require more technical input and attention to detail.  By providing educational information, customer satisfaction can readily improve, and customers can find themselves returning again and again to learn more about products and services. 

Greater Efficiency

Efficiency is improved while using generative AI tools, because tedious tasks can be automated without sacrificing personalized experiences and quality. Customer service inquiries, product descriptions, and even image generation can all be completed using generative AI, allowing operation costs to be reduced, thereby improving business efficiency as a whole. 

Generative AI is driven entirely by data, which allows customer behavior and preferences to be analyzed in order to gain deeper insights into your audience, including their needs and expectations.  

Finally, Generative AI is able to increase sales and ROI by driving conversations via personalized and engaging shopping experiences. By delivering recommendations, targeted advertising, and even dynamic pricing, marketing campaigns are effectively optimized, and sales are more likely to see a significant boost.  

17 Ways to Use Generative AI (and AI) to Boost Your Ecommerce ROI

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To better understand precisely how to use generative AI to boost your ecommerce ROI, we have collected 18 of the best possible ways to use this tool and its non-Generative AI counterpart in order to improve user experiences, bolster customer feedback, and set your online stores apart. 

1. Personalized product recommendations

By using AI algorithms to write personalized product recommendations, ecommerce businesses owners can analyze customer purchase history, their browsing behavior, and even demographic data to suggest additional relevant products and continue writing updates and alterations to descriptions to match customer interest and preferences. E-commerce websites can also use AI to integrate different product recommendations across company touchpoints–think websites, email marketing efforts, mobile apps, and more, all without lifting a finger.  

2. Dynamic product descriptions

A static product description is one that is created once, and sits in perpetuity, regardless of audience or reason for visiting. A dynamic product description, however, when powered by AI can adapt to different customers, shifting to fit different segments and even languages, to make sure that communication is clear and the product in question is fully understood by potential customers. E-commerce businesses are particularly in need of such a service, as there is not a live, visible customer service team with whom to chat and ask questions. AI can successfully personalize descriptions to tailor to individual preferences and interests, in order to make them more engaging to your audience and more relevant to their needs.  

3. Personalized chatbots and virtual assistants

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Although content generation for webpages and landing pages is certainly important, E-commerce companies would be lost without effective assistants and automated messaging. Chatbots and virtual assistants are able to immediately respond to customer questions, resolve issues, and deliver product information 24/7, without requiring that kind of on-time from a dedicated employee. Chatbots can be trained to understand natural language in order to respond to customer’s needs, complaints, and questions with empathy and understanding, to effectively deliver a positive customer experience without sounding canned or mechanic.  

4. Customizable product pages

Think of your favorite shopping site: is it a static page, without the option to customize, or do you have the option of choosing your preferred language, your preferred currency, and the content layout you are best able to navigate alongside? AI can allow customers to select their preferences, including their language, currency, and layout. Customer visuals, video content, and interactive features can also be added, making navigating a basic product page a dynamic and engaging experience.  

5. Personalized email marketing

The start of email may be many decades past, but email marketing continues to drive sales and keep companies top of mind. Personalized email marketing using AI allows ecommerce companies to send targeted emails containing relevant product recommendations, current promotions, and various offers based on compiled customer data, in order to provide a tailored shopping experience. Using AI for your email marketing means that you are able to segment your email lists and easily tailor messages to the different customers you may have to increase engagement and improve your conversion rates.

AI is ultimately a campaign optimization tool for email, and can be used for as simple a goal as targeting an email using a first name, or as complicated as offering personalized recommendations according to the needs and wants expressed in a customer’s browsing habits.  

Further Reading: How to Leverage Ecommerce Email Marketing to Increase Your Sales (with 14 Examples)

6. Generate compelling marketing copy

Compelling marketing copy covers a variety of content. From basic ad copy to social media posts to email marketing, all of your content should resonate with your target audience. Test different copy generated by AI to determine what the most effective messaging is for your brand, and utilize that messaging across all of your advertising platforms and modalities. 

7. Optimize product images and videos

AI-powered tools can be used to generate high-quality images and videos. Unlike standard methods of creating images and videos, which require the use of a model and other positions, AI-powered image and video creation tools generate attention-grabbing product images that highlight their features without utilizing as many resources. Product visuals can be personalized according to customer preferences and interests, in order to deliver a more engaging experience and help consumers more readily see themselves using a product or service. 

Further Reading: The Ultimate Guide to SEO for eCommerce Websites

8. Dynamic pricing and promotion recommendations

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Promotions can go a long way in convincing a consumer to purchase in a competitive market, and AI can be used to deliver dynamic pricing and tailored promotion recommendations according to individual customer preferences. Using AI, you can set optimal prices, offer personalized discounts according to real-time market data and demand patterns, evaluate customer behavior insights, and complete pricing according to a competitor analysis. Adjusting prices and promotions throughout the day or during specific times of the year in order to maximize sales and revenue is also within the realm of AI pricing models to help generate historical sales within your business.   

9. Targeted advertising

Take targeted advertising to a deeper level by leveraging AI products to identify your ideal audience. Highly targeted ads can then be used across social media platforms and search engines to get your products in front of customer segments who will find immense value in your brand and offerings. AI-powered tools can be used to optimize your ad campaigns to reach the right audience, at the right time, and with the right message–even if that message is something as simple as superlative product photography and a targeted product description.  

10. Personalized search results

Personalized search results help improve the online shopping experience as a whole through prioritizing relevant products according to individual search queries. AI-powered algorithms help create personalized search results by essentially “teaching” AI to understand customer intent through search queries. From there, these tools can provide results to address a customer’s specific needs and preferences, in order to effectively meet customer demands across the e-commerce landscape.  

11. Automate content creation

The ecommerce industry relies heavily on content creation, and automating product descriptions, blog posts, and other content automatically can help free up plenty of time and energy to dedicate toward other endeavors across your e-commerce platforms. Product development and marketing strategy, for instance, are frequently improved upon when content creation is automated with AI. Because many content creation tasks are repetitive in nature, AI is a natural fit to improve the overall workflow efficiency of content creation.  

Further Reading: AI in Content Marketing: Benefits, Ways to Use, and 5 Case Studies

12. Optimize inventory management

Efficient inventory management is a must for e-commerce companies, and AI-based forecasting models can help predict demand and efficiently manage inventory levels to prevent stock outages and overstocking. Real-time sales data can be integrated with AI algorithms in order to dynamically adjust inventory levels to ensure optimal product availability.  

13. Streamline customer service

The predictive capabilities of AI can also help streamline customer services by handling simple customer inquiries and resolving common issues. This reduces your reliance on customer service representatives, eliminating the issues of hourly availability and long wait times. More complex customer inquiries can also be tackled by chatbots that have been trained to handle them, or bots can be instructed to escalate issues to human agents as necessary.  

14. Reduce returns and exchanges

14. Reduce returns and exchanges

Because personalization and customization are both so readily achieved with AI, it can be used to reduce customer dissatisfaction, thereby reducing the likelihood of seeing numerous product returns. AI-powered product recommendations are able to match customer preferences, too, to reduce the likelihood of customers making unwanted purchases.  

15. Improve supply chain management

Once again, the predictive ability of AI can help improve business. By optimizing logistics and delivery processes according to AI-driven insights, companies can improve delivery times while reducing operating costs. AI can identify possible disruptions within the supply chain and proactively take steps to mitigate their impact.  

Further Reading: 15 Important Ecommerce Tools You Need to Know in 2024

16. Develop personalized shopping experiences

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Personalized content goes beyond the basics and produces unique, interactive shopping experiences to address individual shopping habits and personal preferences. From product discovery all the way to checkout and post-purchase interactions, AI can help customize client experiences to increase customer satisfaction.  

17. Accelerate the design process dramatically

Innovative product designs and concept development takes time. AI tools can help take that time down considerably, all while responding in real time to changing customer preferences and relevant market trends. The design process is accelerated using AI, which allows new products to come to market faster, helping you stay abreast of developments in your field without working around the clock, yourself.  

The Future of Generative AI in Ecommerce

Although AI has been in the news for a variety of reasons over the past year, it can truly revolutionize the landscape of e-commerce. That being said, there remain some concerns regarding the use of AI; namely, the ability of these types of applications to breech data privacy, present ethical concerns regarding marketing and appearances, and the potential for job displacement that occurs when writing and marketing teams are automated via AI rather than human teams. While AI may not be an acceptable replacement for an entire team of marketing professionals, it can help with predictions, innovative solutions to common problems, and even bringing some needed disruptions to the landscape of online retail. 

Further Reading: 13 Ways to Use AI in Ecommerce in 2024 (with Tools Recommendations)

Conclusion

Generative AI is an invaluable tool for those with e-commerce businesses and companies, as it allows business owners to predict the most likely outcomes to deliver effective sales campaigns and promotions, create engaging marketing materials, and improve customer service. Whether you have worked in e-commerce for years, or you are new on the scene, artificial intelligence can go a long way in optimizing workflows, making the most of your time, and building your online content to establish yourself as a leader in your industry. 

Hero Photo by Lukas on Unsplash

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Neal Schaffer
Neal Schaffer

Neal Schaffer is a leading authority on helping businesses through their digital transformation of sales and marketing through consulting, training, and helping enterprises large and small develop and execute on social media marketing strategy, influencer marketing, and social selling initiatives. President of the social media agency PDCA Social, Neal also teaches digital media to executives at Rutgers University, the Irish Management Institute (Ireland), and the University of Jyvaskyla (Finland). Fluent in Japanese and Mandarin Chinese, Neal is a popular keynote speaker and has been invited to speak about digital media on four continents in a dozen countries. He is also the author of 3 books on social media, including Maximize Your Social (Wiley), and in late 2019 will publish his 4th book, The Business of Influence (HarperCollins), on educating the market on the why and how every business should leverage the potential of influencer marketing. Neal resides in Irvine, California but also frequently travels to Japan.

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