Selling products online was easier a few years ago. You offered an intuitive navigation, the products they’re looking for, and easy checkout on your eCommerce website and they left satisfied.
However, things are entirely different these days. Amazon has spoiled everyone to the point that customers expect extreme personalization. Stats from Mckinsey shows that 71% of consumers expect personalized interactions from an eCommerce website, and 76% leave if that doesn’t happen. Not only this, 75% of shoppers leave a website because they get frustrated by irrelevant offers. So, personalization is a key ingredient of any eCommerce store including yours. In simple words, it can either make or break your eCommerce website.
That’s why most businesses are taking personalization seriously these days. They’re trying every strategy in their sleeve to woo customers through personalization, even hiring reputed eCommerce development agencies to integrate AI into their eCommerce websites and applications. You would be surprised to know that the global spending of AI in eCommerce has grown to $8.06 billion in 2024 from $7.01 billion in 2023, achieving an impressive compound annual growth (CAGR) of 15.1%.
Now, if you’re curious how you use AI to woo customers on your eCommerce website through personalization, this blog is for you. Continue reading!
7 Ways AI can Help You Engage Customers on Your eCommerce Website with Popular Examples
1. Offering a Personalized Shopping Experience
Personalized shopping experience is a key differentiator these days – both for you and your customers. A Mckinsey report shows that brands that implement personalization witness 15-30% increase in revenue and retention, 10-20% reduction in marketing costs, and 3-5% uplift in customer acquisition. Also, the following image from Gartner shows that personalization has a positive impact on consumers:
AI can help you offer personalized shopping on your website by recommending products to customers based on their preferences, behaviors, and purchase. With this approach, you can foster customer loyalty and increase the chances of making more sales.
Amazon is a popular brand that uses AI to offer a personalized shopping experience to customers. Their product recommendation system considers a customer’s past purchases, browsing history, and demographics to predict which products they’re likely to purchase next.
Also, the eCommerce giant engages with its customers on a personal level. By using AI for personalizing content and product recommendations, it ensures customers see a homepage especially designed for them every time they land on their website.
The result: Amazon is one of the biggest retailers with $576 billion in net revenue and 37.6% market share in the US as of 2023.
If you’re also curious about building an eCommerce mobile app that engages customers through personalization like Amazon does, there’s a mobile app development company in Delhi that can help. You can contact and hire them if they suit your business requirements.
2. Optimizing the pricing
AI can also help you optimize your pricing to ensure you receive the best sales margin but also remain competitive. Walmart does the same by using a dynamic pricing algorithm. This algorithm considers various factors like inventory levels, market demand fluctuation, and competitor prices to suggest a product price that’s both lucrative and competitive.
The result: Walmart generated a sales revenue of approximately $611 billion worldwide in 2023, with $511 million revenue coming from Walmart’s eCommerce platform alone.
3. Enhanced Customer Service
The quality of customer service is a key differentiator for businesses these days. Data from Zendesk which was published by Hubspot reports that 64% of customers would switch a brand over a single bad experience with the company’s customer service. On the other hand, 93% of customers repeat with companies that offer excellent customer service, according to a HubSpot Research. So, great customer service is a non-negotiator when it comes to shopping online.
AI can help your eCommerce business offer an enhanced customer service with AI-powered chatbots. These chatbots can automate customer service requests, provide instant answers to frequently asked queries, and assist customers with the ordering process. As a result, you get a more streamlined customer service.
Shopify does this efficiently by integrating AI-powered chatbots that offer automated chat support. These chatbots handle most of the operations that customer support agents may find challenging to address. Also, they handle all the common queries, service related requests, and even offer support during online ordering. It gives you enough time to focus on tasks that are more essential, such as analyzing customer feedback and offering proactive customer outreach.
The Result: Shopify has generated $7.1 billion in revenue, achieving a 26% year over year growth.
4. Better Segmenting Your Customers
Customer segmentation is essential as it can help you personalize your communication, marketing campaigns, and promotions. An eCommerce business that has segmented its customers has better chances of offering a personalized experience and driving more sales than someone who’s trying to cater to everyone.
AI can analyze millions of data points to help you categorize customers by their buying patterns, behavior, and preferences. This way, you can segment and target them much better and increase your chances of conversion.
You can learn from Sephora who uses AI-powered customer segmentation tools to identify and segment customers based on their preferences, demographics, and buying patterns. Then, Sephora targets their marketing campaigns and promotions based on the customer segment, leading to better engagement and more sales.
The result: Sephora shattered all the records by hitting $10 billion in sales last year.
5. Detecting and Preventing Frauds
eCommerce websites are the soft target for fraud. Businesses lose billions of dollars each year because of them. Sometimes, these frauds also lead to costly lawsuits and the loss of reputation.
AI ensures you can prevent these frauds from happening by analyzing the customer behavior, identifying suspicious patterns, and tracking scammers’ IP addresses. This way, you can save your reputation, ensure the customer data is safe, and ensure customers trust your eCommerce website.
You can learn how to use AI to prevent scams from Amazon. Responsible for handling $1.4 billion in sales, Amazon understands the importance of preserving the precious customer data. Hence, they use advanced algorithms that can detect suspicious transaction patterns like someone buying too many items frequently, payments failing multiple times, transactions happening from familiar IP addresses that were blacklisted. This approach has helped them build such a loyal customer base that they rank high on customer loyalty at the rate of 68%.
