In the contemporary era of eCommerce, AI-powered personalization in customer relations is becoming what business sense calls the new normal. This is no longer just an emerging trend or a ‘print advertisement’ marketing approach; I personally think it will change the whole paradigm of e-commerce. The expectations of consumers today and businesses adopting AI are yielding impressive returns.
This prompts an example: According to McKinsey, businesses with many customization features are able to grow revenues by about 40% on average. Another study by Epsilon found that branding strategies that include 80% of consumers doing elements of personalization boost the chances of sales. These figures exemplify the rising relevance of personalization in strategy through the assistance of AI.
But What is AI-driven Personalization?
Personalization Optimization through AI concerns today’s article more about predicting customers with the help of machine learning techniques and looking over the data. It aids in delivering up-to-the-minute tailored offerings, whether they are product suggestions, pricing (scary, I know!) or even some personalized call to action. Searching sites like Amazon and Netflix is a good practice. To give you some figures, Amazon targets about 35% of its revenue from users who buy products based on suggestions made by the site.
Why Does It Matter?
The advantages of AI-powered apps do not end with the enhancement of the user experience:
- Since we are talking about the small chances of making a conversion through achieving the right target audience, then conversion rate increase is the most obvious: Product recommendations that are relevant to the user improve conversion rates. Using Salesforce’s platform, personalized recommendations account for 26% of their revenue, though such readers made only 7% of the total visits to the site.
- Customer Loyalty: When customers feel appreciated and cared for, they tend to come back. A study by Segment showed that 44% of the consumers were likely to make a repeat purchase upon receiving personalized attention.
- Scalability: Something that cannot be stated in traditional methods with no provision for expansion. Companies will handle a huge volume of information and even provide a significant degree of personalization to many users and everything without crashing at the resources.
Overcoming Challenges
Now, while this technology can certainly hold a lot of promise, problems are also associated with it. Data compliance issues have become a major concern for users of such sites, especially global ones which may limit your scope. Brands must assure customers they are using their information to win their trust. The other thing remains to keep the GDPR guidelines and all other privacy policies.
Another hurdle is the initial expense associated with installing AI systems. But with the help of cloud-based AI platforms, even smaller companies can use these powerful tools. Each passing month, many start-up companies are being set up to try and harness the opportunities offered by AI.
Looking Beyond Waiting for the Change
AI-driven personalization will only improve in the forthcoming years with improved technology. We already see the emergence of voice commerce, virtual shopping help and AI-based chat systems that allow more personalized interactions with constant device usage.
Today is an excellent opportunity for many businesses if they have not already adopted AI. Customers are more inclined toward brands that offer understandable and personalized recommendations that are relevant to their demands. Everyone will want personalization in the future, and companies that do not adopt AI will find it hard.
Summary
Personalization of the eCommerce space using AI is where the future of eCommerce is heading. Those kinds of companies that use AI scientists to provide highly personalized customer experiences achieve higher conversion rates and enhanced customer loyalty and set the stage for future growth. As customers request new levels of attention and correlations in their shopping experience, the companies that are flexible to changes by starting to put resources towards AI today will soar shortly.
About the Author
Photo Courtesy: Nelson Brandao
Nelson Brandao is a dynamic leader in digital transformation with over 18 years of experience in IT and eCommerce. He has spearheaded global projects for major companies like Schneider Electric and Nestlé, focusing on optimizing digital ecosystems and driving business growth. Nelson’s expertise in product management and innovation has helped businesses scale effectively while enhancing customer experiences across international markets.
Published by: Holy Minoza
