This article originally appeared on Tech Gig
Talking about AI, predictive analytics, once considered a powerful tool, has now become a business necessity for eCommerce businesses to thrive against the competition.
The eCommerce industry has made big strides in the last few years and the one significant contributor to this growth has been technology. With evolving technology, we have seen many trends that allow eCommerce companies to meet the shopping needs of customers with ease and speed.
ChatGPT is one such example of trending technology that took the world by storm recently. It is one of several examples of Generative AI that has gained immense popularity for how effective it is in personalizing customer experiences, refining operations, and driving sales. One of its prominent applications is in product recommendations, where businesses leverage generative models to analyze customer data and offer personalized suggestions.
Myntra, the fashion-forward eCommerce giant, uses generative AI with 'MyFashionGPT.' Powered by ChatGPT, it enables natural language queries for product discovery. Shoppers can ask specific outfit questions, receiving ensemble suggestions across categories. This integration enhances user interaction, making the shopping experience more intuitive and personalized.
Amazon also uses generative AI to give product recommendations based on individual browsing and purchase histories.
Beyond recommendations, generative AI can also be used for customer engagement through virtual assistants and content generation, which has completely reshaped eCommerce.
Talking about AI, predictive analytics, once considered a powerful tool, has now become a business necessity for eCommerce businesses to thrive against the competition. Businesses have a competitive edge with the ability to anticipate trends, forecast demand, and optimize resources. This transformative technology allows businesses to make informed decisions, minimizing risks and maximizing profitability. The insights gained from predictive analytics allow eCommerce brands to align their strategies with evolving market demands, ensuring they are well-prepared for the future.
Conversational AI, another technological trend in eCommerce, is undergoing a surge in adoption. It transforms the way customers interact with an eCommerce store.
The rising demand for emotionally intelligent and linguistically adept interactions has placed Conversational AI at the forefront of customer engagement. Automation of queries, from product inquiries to order tracking, ensures a seamless and consistent experience for customers.
Full sensory product experience was always a challenge for eCommerce businesses. Augmented reality (AR), also known as "Immersive Retail.” has been in existence for a while as a solution, but now it's more of a hygiene requirement for businesses to consider.
While online shopping lacks the tactile engagement of a brick-and-mortar store, AR bridges the gap by providing customers a closer connection with the products right from the comfort of their homes.
AR applications, such as preview placement, enable customers to visualize products in their real environment before making a purchase. For example, DTC furniture brand Burrow uses AR to showcase true-to-scale 3D models of their couches in customers' living rooms through their Burrow at Home app. This reduces the fear of mismatched expectations and reduces return rates, improving the overall online shopping experience.
Looking ahead, livestream shopping is expected to witness increased validation from eCommerce brands. Already quite popular and an integral channel in South East Asia, brands here too are likely to recognize the benefits in creating an urgency in demand and enhancing customer experience.
Social commerce, especially via WhatsApp has also become more mainstream. The role of WhatsApp has evolved beyond casual conversations. It’s now an effective tool for businesses to engage with customers and streamline transactions.
One of the creative strategies gaining traction is the use of WhatsApp for Abandoned Cart Notifications, a simple yet effective approach to recapture lost sales. Almost 70% of customers load up their virtual carts but often forget to complete the purchase. E-commerce brands can send Abandoned Cart Notifications on WhatsApp as a gentle reminder to casually nudge users who left items in their carts. This simple reminder has proven to recover an impressive 45-60% of potentially lost sales, turning hesitant customers into completed transactions.
Another challenge for eCommerce brands is dealing with Return to Origin (RTO), especially common in Cash-on-delivery (COD) orders. A significant portion of COD orders—roughly 40%—end up returning to the warehouse, doubling the shipping charges for businesses.
For orders opting for COD, businesses can send alluring offers via WhatsApp, such as an immediate discount for prompt payment. This proactive strategy converts a substantial 40-50% of COD orders into prepaid ones, significantly reducing both COD orders and losses incurred through RTO.
Yet another use case is the product catalog feature which enables WhatsApp-based ordering. It acts as a virtual storefront within the WhatsApp ecosystem, allowing businesses to display their offerings with rich visuals and detailed descriptions.
WhatsApp also facilitates transactions. So, customers can now make purchases and complete payments without leaving WhatsApp. This significantly reduces the steps customers need to take to complete a purchase, a great move to increase the conversion rate.
How successful an eCommerce business is going to be depends on its ability to use and adapt to the latest technological trends. The future holds endless opportunities for technology. But which trends stay and which go away with time will depend largely on buyers’ preferences.
Authored By Prem Bhatia, Co-Founder and CEO, of Graas.
1 Dec 2023