How you can use AI software to increase your online store's sales figures

Artificial intelligence in e-commerce? It's one of the hottest topics around, but many retailers are struggling to find concrete approaches that deliver measurable success. Outletcity Metzingen and Swiss online bookseller Ex Libris are showing 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 with AI-supported email campaigns – all while fully complying with the GDPR and the privacy of every online shopper.

Why AI software is important for your online store

To answer this question, let's take a look at brick-and-mortar retail. Compared to online retail, we find that:

• limited opening hours,
• a spatially limited sales area and
• a small selection.

These are restrictions that you, as an online retailer, do not have to deal with. Brick-and-mortar retailers, on the other hand, have the opportunity to establish one-to-one communication with customers and serve them personally and individually – at least before the coronavirus pandemic. When it comes to returning customers, employees on site can draw on their experience to respond to specific needs and requests. This personal connection remains one of the key success factors for brick-and-mortar retailers. With the sheer volume of online shoppers in e-commerce, this was hardly conceivable—until now! AI software makes it possible to establish one-to-one communication with almost every single customer online.

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According to an article in ecommerce magazine, the use of artificial intelligence is worthwhile in many respects. According to Gartner (a provider of market research results and analyses), 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 percent improvement in customer satisfaction, revenue, or cost reduction by 2023."¹

How to integrate AI software into your online store

In order to communicate personally with every online shopper, you first need to build up a knowledge base for your online shop and send the algorithms involved back to school. You start by filling this knowledge base with your wealth of experience and your product catalog. The basic principle here is: the more structured information, the better.
For tips on how to optimize your product data so that it boosts sales, check out the blog article Product Data – Sales Booster for Your Online Store.

Then the learning process about the behavior of visitors and customers to your online store begins. To do this, your online store is simply connected to the knowledge base with a single line of code. All information about the click and purchase behavior of each individual online shopper is then fed into the knowledge base, processed by the algorithms, and fed back into your online store.

Using modern AI methods such as reinforcement learning, the algorithms ultimately optimize themselves in a closed-loop process and communicate with your customers in an increasingly personalized way. With the help of this technology, you can make AI tangible for your online store.

Example: A customer visits an online store and navigates to the "Blouses" category page, where she uses the faceted navigation to narrow down her selection to pink and plain-colored blouses. She particularly likes a pink blouse, so she clicks on it. Based on the customer's behavior (filter restrictions, clicks, etc.) in the online store, the algorithms learn that the customer is potentially interested in pink blouses. This knowledge can be used, for example, when displaying recommendations. If the customer now visits a product detail page, pink blouses can be displayed as recommendations based on her personal preferences.
In a next step, the algorithms could learn the customer's size, for example, through further actions such as clicks/selections. In this way, the intelligent algorithms can continue to develop through self-learning, allowing communication to become increasingly personalized.

How to communicate with your online shoppers using AI software

Behind AI software lies a knowledge base with complex algorithms that operate in real-time software services (SaaS) in online shops. They ensure 1:1 communication between customers and online shops, which benefits various stages of the customer journey.

Best practices: These shops are successfully using AI software

Now you've learned a bit about AI for your online store. But what does the practical application of artificial intelligence look like? We'll show you two best practices examples of how well-known stores are successfully using AI software to optimize their KPIs.

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

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

Sources: ¹ ecommerce magazine (2020)

Learn more about the use of artificial intelligence in e-commerce in our e-book: