Interviews, insight & analysis on digital media & marketing

What does Artificial Intelligence mean for online retailers?

by Angus Hayman, Senior Strategist at Akeneo

While much of the focus has been on the challenges posed by artificial intelligence (AI), less has been said about the opportunities in online commerce, which are profound and extremely valuable from a commercial and customer service point of view.

Arguably, the debate over whether the advent of AI is a good or a bad thing is already over; in one short year, we can already see that there are challenges as well as opportunities. In the world of ecommerce it is advisable to see both sides in order to ensure that retailers and brands can take full advantage with full awareness of the potential downsides.

While talk about limiting the power of AI through legislation continues, we can already see that the technology is running far ahead of any attempts to restrain it. And this is why it makes sense first to work with partners that have put guard rails in place.

On account of the risks of losing control of the brand and its unique properties to a world where AI can so easily replicate so precisely that it may be impossible to trace them back to the owned source, Adobe, as part of its Firefly Generative AI solution, is working with the Content Authenticity Initiative and Coalition for Content Provenance and Authenticity, to ensure accountability, responsibility and transparency in Gen AI. The company is also working towards a universal “Do Not Train” Content Credentials tag that will remain associated with a piece of content wherever it is used, published or stored.

These kind of initiatives are important because, while a piece of creative work may be regarded as unique from a technology point of view, it is often no more than the sum of all the prompts used to build it, and therefore able to be copied. And yet, at the same time, many brands will be looking for the significant economies of scale afforded by generating content using prompt writers, a skill that is very close to an SEO specialist, rather than traditional creators.

This is the perfect example of an opportunity that includes a challenge, which is why it is important to work with specialists that have the AI tools and apps that can create elevated product experiences for customers across owned and unowned channels at scale, backed by clean and seamless data management with full transparency and traceability.

Opportunities and challenges

Working with partners also enables retailers and brands to navigate the place between the extremes of existing and future job roles at their own pace, such as empowering people in a business that are close to the product, craftspeople for instance. Or enabling writers to use standard prompts that meet brand guidelines but then also build new ones that make the online proposition unique.

A good Product Information Management (PIM) solution is ideally suited to this role because it can deconstruct and manage the many components of a product. With AI added, it can automatically find and eliminate any inconsistencies from inputs that will have been sourced from many different places, and then add the rich data that is needed according to the customer preferences, buying channel and location.

For instance, if the information about a light bulb from a supplier has been built using only technical data such as part number or professional installer specifications, AI can source all the information that is missing, eg. light quality, brightness according to room layout, ideal lamp shade matching and so on. Another benefit of this custom approach is localisation based on geography and culture, so that products automatically adapt to the needs of each sales journey.

It is these self-same tools that will enable brands to achieve what can often seem impossible : personalisation of communication, product descriptor, channel and location to enable journeys unique to each customer based on a precise understanding of their preferences and their resulting actions on the fly.

AI algorithms will then analyse customer data, including past purchases, browsing history, and preferences, to deliver tailored product recommendations. This not only improves customer satisfaction but also increases the likelihood of conversions. Retailers can implement chatbots powered by AI to engage with customers in real-time, providing personalised assistance and product information. The journey then continues through AI-powered virtual assistants, enabling users to make purchases, track orders, and get product recommendations through voice commands.

There has been much talk about this capability and there is already a rich array of solutions available for personalisation but Gen AI will move things on dramatically and rapidly. It is therefore perfectly sensible to recommend that retailers and brands build this capability and identify the relevant partners that can help them now.

Further evidence of the urgency to act comes from multiple predictions that show that 2024 will be another year of stagnation following low to no growth in 2023, due to the cost of living crisis, high staff costs, political uncertainty and a trading landscape changed permanently by the pandemic.

What this all enables is a time when it will be possible to value all of the inputs into a product story, where the contribution of marketers, product manufacturers, prompt specialists and of course the customer themselves is respected.

As technology continues to advance, embracing AI becomes not just a competitive advantage but a necessity for those looking to thrive in online retail. By leveraging the power of AI, retailers can enhance customer satisfaction, improve operational efficiency, and stay ahead of the curve in an ever-evolving market.