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How You Can Increase the Sales Figures of Your Online Shop With AI Software

21. May 2021 06:00 | Artificial Intelligence | Increasing Conversion Rate

Shopping as an experience: What stationary retail has long been good at is becoming increasingly tangible online thanks to AI software (artificial intelligence). An online fashion shop and a bookseller show how it works.

 

In this blog article, we will cover the following topics:

Why AI software is important for your online shop

How to integrate AI software into your online shop

How you communicate with your online shoppers via AI software

Best practices: These shops have successfully deployed AI software
How Outletcity Metzingen achieved over 5% more turnover per session
How Ex Libris generated 10-fold higher product email sales in the online shop via AI-supported emailings

Conclusion: Optimised KPIs and digital shopping experiences thanks to AI software

 

Artificial intelligence in e-commerce? One of the hype topics par excellence – but many retailers struggle with concrete approaches that achieve measurable success. Outletcity Metzingen and the Swiss online bookseller Ex Libris show how it’s done: the fashion company increased sales per session by over 5% with the help of AI software and Ex Libris increased its product email sales tenfold via AI-supported emailings – all while fully respecting the GDPR and the privacy of every online shopper.

Why AI software is important for your online shop

To answer this question, let’s take a look at stationary retail. Compared to online retail, we find there:

  • limited opening hours,
  • a spatially limited salesroom and
  • a small assortment.

These are restrictions that you don’t have to deal with as an online retailer. The stationary retailer, on the other hand, has the opportunity to establish 1:1 communication with customers and to serve them personally and individually – at least before the Corona pandemic. In the case of returning customers, the local staff can draw on their experience and thus respond to special needs and wishes. This personal connection remains one of the key success factors of stationary retail. With the mass of online shoppers in e-commerce, this is hardly conceivable – until today! Because AI software makes it possible to establish 1:1 communication with almost every single customer on the net as well.

According to an article in ecommerce magazin, the use of artificial intelligence is worthwhile in various respects. For example, according to Gartner (market research and analytics provider), AI will have the greatest impact on all aspects of commerce. The article states “Analysts predict that the majority of companies using AI for digital commerce will achieve at least a 25 per cent improvement in customer satisfaction, revenue or cost reduction by 2023.”¹

How important is artificial intelligence for you and your online shop at the moment? Are you already using AI or is the use of artificial intelligence planned for the future? Tell us about it in the comments!

How to integrate AI software into your online shop

In order to be able to communicate personally with every online shopper, you must first build up a knowledge base for your online shop and send the algorithms involved to the classroom. You first fill this knowledge base with your wealth of experience and your product catalogue. The following principle applies: the more structured information, the better.

Then the learning process about the behaviour of your online shop’s visitors and customers begins. For this, your online shop is simply docked to the knowledge base with a one-line code snippet. Subsequently, all information on the click and purchase behaviour of each individual online shopper flows into the knowledge base, is processed by the algorithms and flows back into your online shop.

Using modern AI processes such as reinforcement learning, the algorithms finally optimise themselves in a closed-loop process and communicate with your customers in an increasingly personalised way. With the help of this technology, you can make AI tangible for your online shop.

Example: A customer visits an online shop and navigates to the category page “Blouses”, where she uses the facet navigation to narrow down the selection to pink and plain-coloured blouses. As she particularly likes a pink blouse, she clicks on it. Through the customer’s behaviour (filter limitation, clicks, etc.) in the online shop, the algorithms learn that the customer is potentially interested in pink blouses. This knowledge can be used, for example, when making recommendations. If the customer arrives at a product detail page, for example, pink blouses can be displayed there as recommendations according to her personal preferences.
In a next step, the algorithms could learn the customer’s size through further actions such as clicks/selection. In this way, the intelligent algorithms can continue to develop in a self-learning manner, making communication increasingly personalised.

The graphic shows a simple representation of the reinforcement learning process with the example of AI-supported recommendations in the online shop.
Simple representation of the reinforcement learning process

How you communicate with your online shoppers via AI software

Behind AI software is the knowledge base with its complex algorithms that operate in real-time software services (SaaS) in the online shop. They ensure 1:1 communication between the customer and the online shop – various stages of the customer journey benefit from this.

You can, for example:

  • use your search function to enable the interpretation of attributes through AI (semantics) and thus output an almost individual list of results.
  • enrich your product advisor with the click and purchase behaviour of your online shoppers and thus enable individual product ranking.
  • use your recommendations to play out individual additional products and offers to each online shopper via AI.
  • use AI software to provide a personalised shopping stream for each individual customer with content that matches their personal preferences.
  • integrate AI into your emails and display only the content that is potentially interesting for each online shopper.
Customer journey in e-commerce

You communicate via the same shop functionalities as before, but in an intelligent form. In many cases, this creates a 1:1 communication like in stationary trade, which ensures a shopping experience and brings you a higher turnover.

Example: In the online shop of fahrrad.de, for example, AI-supported recommendations are used on the start page. If a customer is visiting the shop for the first time and therefore has no history, two recommendation widgets with top sellers and new products are displayed on the start page. If the customer then moves around the shop, e.g. clicks through various categories or looks at certain products, this click and purchase behaviour is recorded and processed. The customer now has a history that can be used to display personalised recommendations. If our example customer now navigates to the homepage of fahrrad.de again, a third recommendation widget is displayed with “personal recommendations” that correspond to his learned preferences.

Do you already use artificial intelligence in your online shop to implement 1:1 communication? At which touchpoints do you use AI and what are your experiences with it? We look forward to your feedback via the comment function!

Best practices: These shops have successfully deployed AI software

Now you have learned a lot about AI for your online shop. But what does the concrete use of artificial intelligence look like in practice? We will show you two best practices of how well-known shops successfully use AI software and optimise their KPIs.

How Outletcity Metzingen achieved over 5% more turnover per session

At Outletcity Metzingen, personalisation is an important success factor for constantly ensuring the shopping experience in the online shop. For this reason, Outletcity Metzingen has been using a recommendation engine for the personalisation of product recommendations for some time. In order to ensure the best possible playout of individual recommendations for each customer, Outletcity Metzingen wanted to use the technology described above and compare the previously used personalisation strategy with the previous provider in the form of an A/B test. The result was clear: with the personalised recommendations based on AI technology, Outletcity Metzingen was able to increase sales per session by over 5%, as well as record an increased shopping basket value and an increased conversion rate. You can find all the information in the case study Personalisation strategy put to the test.

In addition to personalised recommendations on various pages in the online shop, Outletcity Metzingen also exploits the potential of the AI software even further. By offering each individual shop customer a personalised shopping area, Outletcity Metzingen not only provides inspiration, but also entertainment, a natural customer loyalty effect and thus an increased repurchase rate. The displayed content is also calculated on the basis of artificial intelligence and displayed according to the individual preferences of the respective shop customer.r.

The picture shows an excerpt from a personal stream in the online shop of Outletcity Metzingen. The displayed content is played out via AI software.
Example of a personalised shopping stream in the online shop of OUTLETCITY METZINGEN (Source: screenshot from outletcity.com)

How Ex Libris generated 10-fold higher product email sales in the online shop via AI-supported emailings

In order to inform customers 90 days in advance about a new book release, Ex Libris developed the desire to develop and implement an AI-supported process. Only recipients who are potentially interested in the newly published book should be contacted via an emailing. This AI-supported calculation was implemented automatically via personalised emails. The product email turnover increased by a factor of 10. This implementation even won the Email Award 2018. You can read all further information in the case study Increasing e-commerce sales.

Graphic shows automated target group identification at Ex Libris
Automated target group identification based on AI for Ex Libris emailings

Conclusion: Optimised KPIs and digital shopping experiences thanks to AI software

Artificial intelligence is becoming increasingly important. By using AI software in a targeted way, you can achieve 1:1 communication with your shop customers, which ensures a shopping experience and also optimises your KPIs. AI software can be used at all touchpoints along the customer journey. Many companies, such as Outletcity Metzingen and Ex Libris, have recognised the potential of artificial intelligence in terms of personalisation and are already successfully exploiting it in their own online shops. Thanks to AI software, both retailers were able to significantly increase their sales. Examples like these show that the potential of artificial intelligence should definitely not be missed and that its use is definitely worthwhile.

Sources: ¹ ecommerce magazin (2020)

More information on the topic of artificial intelligence >>

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Daniela Ilincic

Head of Marketing

Daniela Ilincic is Head of Marketing at epoq. Her background is in digital marketing with a focus on SEO and content marketing. She has built up the digital sales channel at epoq, which she continues to optimise with her team. In addition to her work, she enjoys communicating market-relevant information on digital topics.

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