November 30, 2023


Sapiens Digital

New AI Technology Reshapes Customer Experiences in Online Shopping

Online shopping platforms and online stores have already been employing smart techniques to thrive. From aggressive advertising to strategic partnerships, they have been highly successful in attracting customers and growing their profits. It is also not unexpected that many businesses are already using artificial intelligence in various forms.

Based on numbers from Statista, the global AI market in the retail industry was valued at $3.9 billion in 2020 and is expected to grow to $5.06 billion in 2021 and $6.55 billion in 2022. It is projected to accelerate its growth to become a $23.32 billion market by 2027.

What exactly does AI do for businesses especially when it comes to dealing with customers? It is worth examining this question as the projected AI market growth cannot be without any underlying reason that businesses can willingly refuse to take advantage of.

Reshaping customer experiences

Harnessing AI to influence customer behavior is already being done by many businesses. One notable example is e-commerce personalization and experience optimization solutions that are offered by the Israeli startup Dialogue.

For many, the idea of using artificial intelligence in business is tied to the automation of simple and repetitive processes. These include the sending of reminders or alerts for carts that have been abandoned or not checked out after some time, inventory management, and analysis of e-commerce data. Given the advancements in AI technology, it is actually possible to do more than these.

Businesses can achieve effective e-commerce personalization and customer experience optimization with the right AI or machine learning algorithms. As Dialogue suggests, there are ways to recognize, analyze, and comprehend the patterns of shopper activities to provide relevant and enhanced experiences in every step of their online shopping journey.

New AI Technology Reshapes Customer Experiences in Online Shopping
Source: Dialogue

Instead of giving potential buyers a static experience every time they visit a store, businesses can introduce personalization or customization that draws customers closer to where they are likely to proceed with a transaction. There is never a guarantee that customers will come once an e-commerce site is launched. Likewise, marketing campaigns do not guarantee the conversion of visitors into customers.

Businesses need to do more to make good use of website traffic and turn existing customers into repeat buyers and repeat buyers into patrons. All of this can be done by influencing customer experiences in ways that are advantageous to both the customer and the business.

NLP analyses and neural network models

So how does Dialogue use AI to accomplish its goal of reshaping customer experiences to facilitate conversion and keep customers satisfied to retain or even upsell to them? Two phrases: neural network models and NLP analyses.

New AI Technology Reshapes Customer Experiences in Online Shopping
Source: Dialogue

Dialogue employs a natural language processing (NLP) analysis to leverage content and users’ information in coming up with the most effective personalizations. The system analyzes the human language mostly in written form to get more inputs to come up with neural models that enable precise predictions to anticipate what customers want in an online store.

On the other hand, neural network models are essentially a simulation of how the nervous system operates. They model the process by which the human brain processes information by simulating massive numbers of interconnected processing units. Dialogue uses neural network models to spot patterns, both obvious and inconspicuous, to facilitate the prediction of what a user is looking for at the moment. It integrates cognitive science methodologies with superfast computing power to solve the puzzle of what a customer wants or needs.

Automatically generated content

Neural network models are essential in the automatic generation of content that will be shown to customers to help them remember what they are looking for or make a purchase decision. Dialogue has an automated customer messaging engine that is superior to the standard A/B testing method, as this messaging engine can generate customized messages for different customers in real-time.

Intent-based personalization

Dialogue has Conversion Rate Optimization (CRO) consisting of different products that help create bespoke consumer experiences. These include the SmartBanner, Recommender, Storyteller, Persuader, Booster, and Stories. These are shown to customers in different parts of the online shopping journey more convenient and productive. Customers will never have to go around an e-commerce site aimlessly, as they will always stumble upon something to help them find the things they intend to buy and go over great alternatives.

Enhanced in-store experience

Additionally, Dialogue offers what it calls a “synergistic in-store experience” by displaying product page recommendations that work in concert with the automatically generated content for customers in the category pages, homepage banners, and upselling messages in the shopping cart to keep customers engaged instead of just letting them buy something then leave.

There are many instances when customers forget the things they want to buy or they may change their purchase decision after finding better alternatives. For example, they may find an item similar to the one they had on their cart being put on sale or similar products bundled with other items at discounted prices. Dialogue’s AI solution helps customers get the best shopping experiences while maximizing sales in the process.

Ongoing optimization

In connection to the neural network models, Dialogue also continuously optimizes itself by learning from customer activity. Through a proprietary algorithm-driven by e-commerce conversion optimization, the system tweaks its contents and approach in engaging customers to pursue better outcomes.

Improving key performance indicators 

Artificial intelligence is capable of delivering notable improvements in key performance indicators. In Dialogue
’s studies, their system boosted session time by up to 3 times, increased average page views by up to 4 times, raised conversion rate by up to 40 percent, and improved average order value (AOV) by a significant 30 percent.

As can be seen below, case studies show delivery of higher rates of customer engagement, revealing that around 33 percent of users click on Dialogue’s promotions on customer-directed content on the site.

New AI Technology Reshapes Customer Experiences in Online Shopping
Source: Dialogue

Moreover, using its AI results in customers visiting up to 3.3 pages per session and 3.5 times longer average session duration. Dialogue also reports that up to 213 percent of customers are more likely to purchase with the Dialogue widgets employed.

New AI Technology Reshapes Customer Experiences in Online Shopping
Source: Dialogue

Is there a need to reshape customer experiences?

What’s wrong with most people’s “natural” or “uninfluenced” way of doing online shopping? Why is there a need to manipulate online shopping experiences?

According to predictive sales and marketing analytics provider Funnel Science, one of the biggest reasons e-commerce businesses fail is the poor shopping experience. Potential buyers are not getting the kind of service they expect or the experience that would convince them to add items to their carts. Add to this the unfavorable e-commerce site visitor stats, which show that around 97 percent of the traffic online stores get are unlikely customers.

Website traffic is useless if it does not translate into sales. What’s great about the tech tools available at present is that businesses can now optimize the conversion of the 3 percent likely customers and even possibly convert more from the 97 percent unlikely buyers. With the help of artificial intelligence, e-commerce sites can attract and turn in more sales mainly by enhancing customer experiences to the benefit of both customers and businesses.

Even better, nowadays it is possible to do all of these without the need to learn coding or programming. There is also no maintenance requirement. With the power of AI, businesses can boost sales and profits by discreetly or unobtrusively reshaping customer experiences.

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