Including generative AI in your e-commerce strategy isn’t just a choice. It’s a necessity.
Brands that leverage AI algorithms to decipher consumer preferences, curate hyper-personalized shopping journeys, and deliver the omnichannel experiences that increase customer satisfaction and brand loyalty, are the brands that will be here for the long haul.
Here are some of the top AI trends shaping the future of e-commerce.
More than 80% of customers prefer companies that provide a personalized shopping experience, and 70% of shoppers spend more with companies that offer personalization. As important, personalization reduces customer acquisition costs by up to 50%, increases revenue by 5%-15%, and boosts marketing ROI by 10%-30%.
With all its proven benefits, it’s no surprise that online retailers believe AI-powered personalization will impact their businesses more than any other trend in 2024. AI is assisting brands in delivering the personalized shopping experiences customers want most, like relevant shopping recommendations, reminders when a product comes back in stock, and a seamless experience across in-store and digital platforms.
Visual search tools like Google Lens and Pinterest Lens have exploded in popularity over the past few years, with Google Lens now having 12 billion visual searches monthly, four times the number of searches it had two years ago. The human brain can detect meaning from an image in as little as 13 milliseconds, and research shows that 59% think visual information is more important than textual information.
Today, more brands are leveraging search engines and social media platforms to allow customers to search for photos rather than text listings. Some platforms encourage their customers to use their mobile device’s camera to take pictures, and image recognition software delivers search results with similar items or products. Since the human brain processes images much faster than words, shoppers can use visual search to find the products they’re seeking quickly and efficiently.
Purchases made through voice assistants are expected to go from $22 billion in 2020 to $164 billion in 2025. Similarly, chatbots and conversational marketing are one of the fastest-growing communication channels for brands, with a market expected to grow by nearly 24% from 2023 to 2032.
Brands are capitalizing on this technology in 2024 to meet consumer demand, gain a competitive advantage, and offer more convenient, seamless experiences. The average voice search loads 52% faster than the average webpage, meaning consumers are more likely to use the tool for fast and easy shopping. Likewise, brands that implement chatbots can boost e-commerce revenue by 7%-25%.
The global cost of inventory stockouts and overstocks reached nearly $1.8 trillion in 2023. In the U.S. alone, retailers had a collective $740 billion in unsold goods, but AI-powered predictive analytics is helping brands minimize the damage in 2024. In fact, 2023 figures were down by $172 billion from 2022, proving that the benefits of predictive analytics are already at play.
As e-commerce becomes more competitive, brands are using predictive analytics to anticipate future demand, reduce stockouts, and minimize excess inventory. AI helps produce better, high-quality data, which allows for better stock management and faster order fulfillment. Since consumers prefer reliability and transparency about inventory, predictive analytics also helps brands boost customer satisfaction.
The rise of personalized shopping experiences, virtual assistants, and visual search underscores the profound impact AI is having on e-commerce. Emerging technologies will further help online retailers meet ever-evolving consumer demands.
Incorporate Cloudinary’s AI technology into your business for online retail and e-commerce success. Contact us today and see how Cloudinary helps brands deliver fast, flawless visual experiences at scale.