Developments in the field of artificial intelligence are incredible, almost as if they are from a different world. Investors spend millions in the development of AI. The most active technology is used in the field of Internet search, helping to shape the Google search engine and handle voice assistant requests.
AI becomes more perfect with each passing day. Therefore, there is nothing surprising in the fact that this technology is increasingly being used for online retailers. The most innovative of these companies are already experimenting with the use of artificial intelligence. However, many online retailers are ignoring AI which will prove detrimental to their business for years. At this stage the main issue is how new technology is changing the retail trade network.
Changing the shopping industry
Let’s understand the benefits AI can bring for those whose business is in e-commerce. Artificial intelligence promises to bring us a higher quality shopping experience. Not many industries can boast of such a competitive capacity, as the scope of e-commerce. This technology expands the e-commerce limits and their capabilities. Artificial Intelligence shows how amazing it is in areas like marketing, health and finance, and more recently, in e-commerce.
After analyzing the AI perspective, here are 3 main ways it will impact e-commerce in the coming years.
1. Visual search
Buyers can bid farewell to impulse control. Software platform, managing online stores create visual search capabilities allow users to upload images and find similar / complementary products.
2. Offline and online worlds become one
The visual search capabilities provide the connection between online and offline modes. Retailers are changing the way consumers interact and brands, retail will have a lot of information about customers, improving customer service and increasing sales. Users will be able to use artificial intelligence to gather the information posted on the web site (product overview, reviews, etc.).
The personalization of e-commerce is nothing new. Thanks to new technologies in AI, personalization tools have become available for brands of all sizes. Many online stores are using collaborative filtering to provide advice to clients. Such filters are limited however, because they collect data from only one channel. Whether it is an online store, an ordinary store or a mobile app, AI brings the user experience across all these channels.
Thus we get an interactive shopping experience, based on recommendations and cognitive data. Your e-commerce site needs to be designed with all this in mind. Companies like SDI are there to help improve your website to bring in more customers.
The role of future technologies in retail trade
1. The spread of the Internet of things
In the next few years, Consumers will live in a closely interconnected, high-speed world where the Internet becomes an everyday reality. By 2020, the number of connections of machine-to-machine (M2M) – the transmission of information without human intervention – will increase to 660 million and will continue to grow. Various devices that monitor the level of demand and other factors, will become commonplace and will improve the efficiency of the shops. M2M technologies in a smart home strategy will be used to monitor the status of devices and automatic replenishment.
Despite the fact that the Internet has the potential to turn into a payment system, this does not mean that this potential will be realized. This can prevent buyers fear of losing control over their payments and the feeling of prejudice by limiting choice.
2. Handheld devices
These devices are able to collect and transmit data. They will help the seller to collect detailed information about the buyer: the daily route, the current location, health and others. These data vendors can use this to improve the product and marketing channel optimization.
3. Augmented reality
Augmented reality technology will become a driver for online and offline commerce. Augmented reality blurs the boundaries between the virtual and the real world, as opposed to virtual reality, which plunges into the virtual world.
This technology help vendors to solve the problem of online customer who purchase clothing, and significantly reduces the return of purchases. Offline stores will use the technology to design showrooms.
Preparing for the Future: Recommendations
1. Develop flexibility and constant training
Vendors need to quickly identify changing trends and adapt to them. Get to know new technologies and the use of partnership opportunities. Education should not be based on an analysis of past experience, this is not enough. It is necessary to study and test promising new concepts to attract and interact with customers and partners.
2. Rethink segmentation
Traditional methods of segmentation no longer fit the “digital” buyer. Consumers will increasingly move between segments, and the border between them will blur. The buyer is aware of the benefits of personalized products and services, and does not want to consume more mass products. Approaches to segmentation will become more complex and creative, based on the context, as the old tricks “one model for all” does not work anymore.
3. The limits of personalization
By 2026, it is clear that personalization, despite the benefits, has limitations. Production and marketing of the “individual” production is costly. Therefore, for most products fit model mass personalization, which is already implemented in the clothing and automotive industry. This model will allow brands to offer personalized products to a wide range of people at the right price.
There will be people who do not want to purchase highly personalized products. They understand that they have to pay for the personalization of personal data, in which safety is not assured.
4. Invest in understanding how to satisfy your buyer
Sales promotion channels are fully interconnected, so it is impossible to calculate individual channel profitability. Understanding the way the buyer makes their purchases in this situation is crucial for understanding the role of each channel and the required investment.
5. Create a brand
After 10 years, the buyer will expect the same high level of service from all vendors. How, then, do you stand out from the competition?
Building a brand is much more than just advertising. The brand should be associated with the level of service provided. It must be distinctive, have a strong emotional bond, and a trusting relationship with the customer. Most retailers do not have their own brand, in contrast to the manufacturers whose goods are sold.
Are you interested in learning how you can improve your e-commerce site? Give us a call at 408.802.2885/408.621.8481 – or click here to contact us!