5 Ways Generative AI in eCommerce is Changing the Game

Generative AI has rapidly evolved from a burgeoning technology to a transformative force that’s reshaping industries at an unprecedented pace. Since 2022, advancements in generative AI have accelerated, leading to innovative applications that are redefining how eCommerce merchants operate. In 2024, we’re witnessing a new era where generative AI enhances and revolutionizes how businesses engage with customers and streamline their processes.

So, what is generative AI today? It’s advanced machine learning that creates new content—text, images, or video—based on vast data. Early tools like OpenAI's GPT and Google's DeepDream set the stage, but today’s versions, like Midjourney's DALL·E, are far more sophisticated and integral to daily business, offering creative capabilities unimaginable just a few years ago.

For eCommerce merchants, generative AI is now a game-changer. They’re using it to write product descriptions, craft website copy, and design ad creatives with a level of personalization that’s hard to achieve otherwise. But it’s not just about saving time—generative AI in 2024 is all about creating better customer experiences. In this article, we’ll explore how these advancements in generative AI are transforming eCommerce and why it’s something your business should be paying attention to in 2024

Key Uses for Generative AI in eCommerce

Personalized Customer Experiences

Generative AI enables hyper-personalization by analyzing customer data to tailor product recommendations, marketing messages, and shopping experiences. This personalization is crucial as consumers expect tailored interactions and can lead to increased customer satisfaction and conversion rates. In fact, 71% of consumers expect companies to deliver personalized interactions, and 76% get frustrated when this doesn't happen.

Adding personalization through generative AI directly impacts an eCommerce business's bottom line by driving higher conversion rates and increasing the average order value (AOV). After all, AI shopping is the future of eCommerce. When customers receive tailored product recommendations and targeted marketing messages, they are more likely to make a purchase, boosting conversion rates. Additionally, by suggesting complementary items or offering personalized bundles, businesses can encourage customers to add more to their carts, effectively increasing the AOV. This level of customization enhances customer satisfaction and builds loyalty, leading to repeat purchases and a higher customer lifetime value, all of which contribute to stronger revenue growth for eCommerce businesses.

Louis Vuitton uses generative AI to create a virtual shopping assistant that analyzes your browsing and purchase history. It offers personalized product suggestions, recommends complementary items, highlights new arrivals, and even gives styling tips, enhancing your shopping experience. Generative AI helps to solve the challenge of replicating the customer experience with high-touch, personalized service that luxury brands are known for in their physical stores. 

For luxury brands like Louis Vuitton, creating top-tier customer experiences is essential, and generative AI allows them to extend that level of personalized shopping into the digital realm. This technology ensures that even in an online storefront, customers receive the bespoke attention they expect, which is crucial for maintaining brand loyalty and driving high-value conversions.

Content Creation

Today, generative AI is most commonly used to assist in creating marketing collateral, product descriptions, and even visual media for ads and websites. This speeds up the content creation process and ensures consistency and relevance, leading to improved engagement metrics like click-through rates. AI can create landing page copy in seconds instead of having to manually write and optimize content for each item, leaving your team with more time to focus on other important tasks.

Michaels Stores is using generative AI to boost customer engagement through more personalized interactions. They created a platform to generate content and understand how different customer segments react to messages. According to McKinsey, this has helped Michaels increase email campaign personalization from 20% to 95%, resulting in a 41% jump in SMS click-through rates and a 25% increase in emails.

Customer Service

Generative AI powers chatbots that provide 24/7 customer support, taking customer service to the next level. While chatbots have been around for years, their capabilities have been significantly enhanced with the advent of generative AI, especially for eCommerce merchants. These AI-driven tools can now handle a broader range of inquiries with greater accuracy, personalize interactions based on customer data, and even generate human-like responses that feel more natural. Additionally, they can seamlessly escalate complex issues to human agents when necessary, further improving customer service efficiency and satisfaction.

Sephora, for example, has embraced AI to enhance customer service. Their AI-powered chatbot assists customers by providing product information, troubleshooting issues, and even sharing beauty tips. It's a great way for the top beauty retailer to connect with shoppers! A case study by Chatbot Guide saw that this technology even helped to improve conversion rates by 11%.

Product Descriptions

Generative AI significantly enhances the quality and appeal of product descriptions by crafting engaging, informative, and SEO-optimized text. By understanding consumer preferences and analyzing top-performing descriptions, AI systems can generate content that resonates with target audiences while highlighting key features and benefits of products. This capability saves time for eCommerce merchants and ensures that each product listing stands out in a crowded marketplace.

Walmart uses AI-driven robots to scan shelves and create product descriptions for its online store. Studies from WakeUp Data saw that this method guarantees that product listings are consistent and accurate, improving the shopping experience by offering customers detailed and trustworthy information. Automating the writing of product descriptions allows Walmart to manage a large inventory with less manual work.

Product Image Generation

AI has revolutionized product photography by automating removing backgrounds, resizing images, and even creating appealing visuals from scratch. Gone are the days when photoshoots were necessary for each product variant or color. With generative AI, images can be generated in various sizes and backgrounds with just one high-quality source image

Amazon Ads has launched a beta for image generation, a generative AI tool that helps brands overcome creative hurdles by creating lifestyle images to boost ad performance. For example, featuring a toaster in a kitchen setting with a croissant can increase click-through rates by 40% compared to plain product images.

AI Beyond Basics: Elevating eCommerce with Advanced Applications

Once brands get a bit more comfortable with generative AI, they can turn their sights to more complex and sophisticated AI-based applications. A great example of this is AfterShip Intelligence.

AfterShip empowers businesses to enhance customer satisfaction and loyalty through key areas:

• Catalog AI: Accelerates product launches by optimizing pricing strategies and managing inventory with predictive insights, ensuring the right products are available at competitive prices.
• Discovery AI: Utilizes data analytics to generate relevant product tags, improving discoverability and tailoring recommendations to shopper preferences, boosting conversion rates.
• Logistics AI: Standardizes and predicts tracking updates, providing timely notifications that foster transparency and trust, enhancing customer engagement and satisfaction.

As technology advances and businesses explore new ways to utilize AI, the possibilities for improving the eCommerce experience are endless.

Transforming eCommerce with Generative AI

AI eCommerce is reshaping online shopping, enhancing various aspects such as customer engagement, product descriptions, and service efficiency. As businesses embrace these advancements, they remain competitive and improve their customer experience.

eCommerce companies should leverage generative AI technologies to thrive in this evolving landscape. And if you're ready for a deeper dive into AI, check out AfterShip Intelligence to boost your eCommerce game and keep up with the needs of today's savvy shoppers!