AI Commerce Solutions Fueling The Purchase Path

Alongside the global digital commerce adoption, a shift in how consumers are discovering new products and services, connecting with brands and retailers and completing transactions has ushered in the need for more intelligent customer experiences. For businesses, the ability to integrate AI throughout the digital customer journey will be a differentiator going forward, as consumers come to expect an amplified level of personalized assistance across every channel, and within multiple interfaces (voice, chat, SMS, social.) 

Within the research and discovery stage, natural language processing, image recognition and visual search capabilities are creating more contextual search experiences, connecting consumers to more curated and accurate results. Meanwhile, the layering of AI and machine learning is allowing for greater personalization across product recommendations, pricing, and promotions, tailoring shopping experiences to each consumers’ profile, preferences and purchase behaviors. Across the digital commerce landscape, a greater need for trusted guidance has blended the role of associate and bot, as on-demand support requires 24/7 availability and intelligence-backed service agents allow customers to feel known and supported no matter the channel of interaction. And as future state commerce experiences become reality, retailers and brands are designing synthetic sales associates to act as metaverse brand guides, and programming bots to provide concierge services, from sourcing products, to completing purchases on consumers’ behalf. 

Insights Around Next-Gen Customer Assistance 

Digital adoption has created a new path to purchase, as customers now expect on-demand access to brands and retailers, whether through text, chat, voice or social channels.  

SMS adoption has grown alongside the acceleration of e-commerce. Over the past year, 66.5% of consumers signed up to receive texts from more brands than they did the year before. What’s more, over 70% of consumers want to ask brands questions over text message—and they want to get answers in real time.
2021 SMS Marketing Consumer Trends Report. Attentive, 2021. 

55% of shoppers want a chatbot to provide support for finding specific products, in addition to customer service. American consumers most commonly turn to chatbots for customer service, with 70% of U.S. shoppers saying they use a site’s chatbot every visit or often.
Report On Shopper Behavior And Preferences In The U.S. And The U.K. Lucidworks, 2021.

Omnichannel shopping tools have become an expectation for consumers, as in-the-moment assistance, immersive product exploration and personalized recommendations come to define the optimal shopping experience.  

A 2020 study from PYMNTS and Visa estimates that 23 million consumers used voice assistants to make purchases — a 45% increase since 2018 and an 8% gain since 2019.
How We Will Pay 2020. PYMTS & Visa, 2020 

Receiving personalized service regardless of where they shop remains a key differentiating factor for consumers.

62% of consumers surveyed feel it is important for brands to personalize their online and in-store retail experiences.
Value-Based Personalization Is the Future of Retail Marketing. Liveclicker & Sailthru, 2021

Brands and retailers are leveraging connected data and platforms to empower their associates and meet elevated consumer expectations.

When clienteling is being utilized, the shopper’s average order size is approximately 50% larger, and return rates reduce by 40%; and when transitioning anonymous browsing into a consultation, the number of first-time buyers also grows by 20%.
“How Clienteling Can Drive Omnichannel Sales During Covid-19.” Sourcing Journal, 2020

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Deep Dive with PSFK’s latest report… AI Commerce Solutions

Within this report, PSFK has identified six trends that showcase how leading brands and retailers are using AI to leverage shopper data. Specifically, we explore understanding in-the-moment preferences to suggest the right product at the best price, surface customer information and relevant details for sales agents in real time, and power individually-informed recommendations through voice, chat and text-based on-demand support. As the role of AI evolves from offering back-end solutions to providing consumer-facing value, the ability for retailers to deliver the optimized digital shopping experience consumers now expect will depend on their application of intelligence-supported shopping journeys. 

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TRENDS  

Contextual Search

Sophisticated AI is powering a new era of image recognition technology that is bringing online search engines into the real world. Better able to understand shoppers’ intent within the research and discovery stage, AI is providing more accurate and specific results by integrating natural language processing and visual search capabilities into the search experience. These capabilities now enable consumers to take a photo of nearly any object in the physical world to receive related information, locate similar products based on attributes like color or style, connect with an expert to receive more information and even purchase that item with a single click or voice command. When combined with 3D and AR functionality, this technology creates new opportunities for digital fit and trial experiences.

Social media platform Facebook is launching AI-powered tools to recognize items in images and pull relevant product listings, along with an AR try-on feature, on its Instagram service. The tools allow Instagram users to find product listings and recommend items by tapping on photos, with the goal being to turn almost every item appearing on Instagram into a shopping product, and turn Instagram into a native checkout portal where users don’t have to leave the app. The company is also exploring an AI-powered stylist that will recommend accessories for a piece of clothing.

Tailored Recommendations

When navigating a full product catalog, customers can feel overwhelmed or unsure of how to choose (or customize) products to fit their needs. Retailers are offering AI-enabled decision support that asks customers questions about their preferences and requirements and/or leverages shopper data to help narrow down choices and suggest the best options. Guided selection systems support customers in finding the best product for their needs, boosting shopper confidence.

Furniture retail company Ikea is partnering with social media platform Pinterest to help consumers update their homes with personalized product recommendations and decor inspirations. Based on answers to three questions from a chatbot, shoppers will receive a personalized Pinterest board with home furnishing content inspired by their individual answers. Ikea hopes to tap into Pinterest’s design-savvy audience to inspire home decor purchases and remove shopper friction through tailored recommendations. The new tool is called “Renocations,” a portmanteau of “renovation” and “vacation.” 

Dynamic Promotions

By collecting and processing real-time data spanning supply and demand, shoppers’ browsing behavior, purchase history and customer service interactions, search platforms and marketplaces are applying deep learning models and AI technology to optimize everything from pricing, promotions and recommendations to predicting customer intent. By understanding the likelihood of similar customers making a purchase at a certain price, these platforms are able to automate the process of sending out personalized promotions to customers over messaging with offers to match their purchase intent, driving incentive and maximizing spend. 

Customer growth platform Brightloom helps online businesses use transaction data from customers, along with catalog or menu and marketing campaign data, to predict what a customer may want to buy next and how much they will spend. These predictions then drive personalized product recommendations and promotions that incentivize customers to act in predictable and repeatable ways. Brightloom uses machine learning to analyze each customer’s transaction history and compares it to similar customers to predict future behavior and maximize spend. This is similar to what Spotify does with music recommendations. Brightloom currently powers Starbucks’ mobile app and customer loyalty program. 

Synthetic Sales Associate 

Deep fake technology coupled with realistic holograms and AI allow for programmable avatars with life-like personalities. Sellers and brands will use synthetic, life-like versions of staff to provide customer service and sales support. Situationally adaptive, these synthetic sales associates allow businesses to quickly scale customizable product messaging, and automatically adopt consumers' preferred language within chat and video interactions. For consumers, the ability to interact with synthetic sellers within virtual stores, their phones or any preferred channel allows for on-demand access to product information and guidance anytime, anywhere. 

LA-based metaverse developer Sensorium, known for its simulated virtual experiences of concert venues and upcoming virtual world Sensorium Galaxy, has created photorealistic avatars to accompany virtual guests. By pairing AI with several language models and unique personality bios, Sensorium’s avatar characters are able to support complex and unscripted conversations, moving conversational AI use cases from chat-bots to continuously learning human-like conversations. 

Hybrid Sales Assistance

Regardless of where and how consumers choose to shop, they expect to be met with service that is personalized based on their past interactions and current needs. To be able to deliver on that expectation, retailers are equipping their associates and service reps with AI-powered dashboards that serve up relevant information like shopper purchase history and preferences, alongside contextual data like current promotions and product details and availability in a single view. By empowering associates with real-time customer and business intelligence, service agents are providing tailored interactions  and one-to-one communications for every customer, no matter their level of product knowledge. 

Understanding the value of its client data, and the role artificial intelligence will play in providing return value for customers, French luxury conglomerate LVMH, which owns brands like Louis Vuitton, Stella McCartney and Tiffany & Co., has partnered with Google Cloud. The partnership is focused on deploying AI solutions across the company’s individual luxury brands, with a focus on improving demand forecasting and helping associates to provide more personalized recommendations to their clients. A joint training and education program, the “Data and AI Academy,” will provide managers and executives from across LVMH’s portfolio of brands with in-depth training to better understand data, and how to apply the AI and machine learning solutions to issues like merchandising, client relations and omnichannel solutions. While personal customer data will not be shared between the brands, each will be able to access broad information regarding preferred styles, shopping habits, and customer behaviors, while providing associates a full view of each client’s needs, preferences and details across all channels. 

Proactive Purchasing 

AI-powered bots are reaching an inflection point where consumers are not only to interact with them to complete in-the-moment tasks but also program them to automate ongoing and future actions. In the context of shopping, this could mean working on behalf of a shopper to fill specific needs like the regular purchasing of common products or helping to find and buy products based on a set of criteria like sizing, pricing, etc.

AI-powered app Nate takes the heavy lifting out of online shopping by executing purchases for the consumer. Shoppers search, discover and share with Nate the item they want to buy, or save for later, and Nate handles the details of visiting websites, filling in necessary information and ultimately checking out upon receiving the command button “buy.” Once the item is purchased, consumers receive a confirmation email. App users are also able to share gifts from any store with their contacts via text, as Nate instantly handles both checkout and delivery.

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Deep Dive with PSFK’s latest report… AI Commerce Solutions

Within this report, PSFK has identified six trends that showcase how leading brands and retailers are using AI to leverage shopper data. Specifically, we explore understanding in-the-moment preferences to suggest the right product at the best price, surface customer information and relevant details for sales agents in real time, and power individually-informed recommendations through voice, chat and text-based on-demand support. As the role of AI evolves from offering back-end solutions to providing consumer-facing value, the ability for retailers to deliver the optimized digital shopping experience consumers now expect will depend on their application of intelligence-supported shopping journeys.