How AI Can Help You Scale Your Ecommerce Business

If you’re like most Americans, you’ve already interacted with AI several times since you woke up this morning, possibly without even realizing it.

More importantly, if you’re like most ecommerce sellers, you’re one of nearly 77% already looking to use AI to grow your business. And while you can’t just yet order AI to grow your business while you soak up the sun on a beach in Thailand, it has enough shiny new potential that megacorporations are investing hundreds of billions of dollars into it. 

That’s great for them, but you probably don’t have billions to invest in creating your own AI agents. So what kinds of AI tools already exist that can help a growing ecommerce business out?

At OTW Shipping, we handle the logistics part of scaling ecommerce businesses which, unfortunately, hasn’t had quite as much automation (yet). But we’ve had our fingers on the pulse of new advancements in AI for quite some time.

We made this article to help you understand some of the best ways you can incorporate AI into your scaling strategy. We’ve even thrown in some tool recs to boot!

How to Create a Better Ecommerce Customer Experience Using AI

AI today shines in customer experience. That’s all the stuff pushing buyers down the funnel toward making their first purchases in your store. We’re going to cover a few of these methods below.

How to Use AI to Help With Product Visualization 

Have you ever bought a shirt online only to realize it looks much better on the model than on you? What about returning a novelty piece of furniture after deciding that in your room, it looked kitschy in a bad way?

For the typical online shopper, the answer is yes. In 2020 alone, over 400 billion dollars worth of goods were returned, a quarter of them from online purchases. 

In an effort to stop this epidemic of returns, online retailers have been turning to AI-powered augmented reality (AR) visualization tools. You’ve probably noticed the buttons on clothing sites that say things like “Try it On!”, or the ones on furniture pages that let you “See it in Your Room”. 

These tools are becoming more and more common, allowing people who prefer brick-and-mortar shopping a chance to visualize products on their bodies or in their homes. For the risk-averse shopper, being able to “see” something makes them much more likely to actually convert into a sale.

In fact, using a visualizer program like PICTOFiT or Palazzo could be key to helping you scale. According to Forbes, AI try-on tools not only lower returns by 20%, but they can also give your sales a 30% increase.

How to Use AI to Create Personalized Product Recommendations

The research is in, and it shows that 77% of US shoppers prefer brands that make personalized offers. In other words, they want online product recommendations based on their search histories, purchases, returns, and wish lists. 

Many new AI programs can do just that. While cookies and trackers may get a bad rap, they’re invaluable for informing AI about shopper habits. Actions like searching for products, clicking links, and even abandoning shopping carts can be fed and tracked and fed to AI algorithms, which update and analyze new data each time a customer interacts with your site.

All this combines to create a profile of each shopper able to give them updated, relevant product recommendations in real-time – often through email.

The result? Frequently, more satisfied customers. The right AI software could help you become part of the solution for the nearly 41% of online shoppers who want to see even more customized suggestions and deals.

Some examples include:

• GetResponse (email-based recommendations)

• Coveo

How to Use AI-Guided Shopping Assistants

Tired of fielding constant returns from customers who bought the wrong size or style? You might want to look into an AI shopping assistant. 

Shopping assistants ride along with customers while shopping and, using a series of pop-up prompts or search queries, help them find exactly what they’re looking for - especially when they don’t know what they want themselves!

While AI assistants come in different forms (check out Zoovu and Constructor for some examples), most can do some form of the following:

1. Assist customers in finding a certain type of product.

2. Narrow down or compare a selection of products.

3. Provide specific product information and cross-referencing it with the customer’s needs.

Be prepared for some sticker shock, though. The more active and personalized the AI assistant, the higher the price tag. Many work based on credit systems where you’ll pay more based on customer usage. After all, most of these businesses are paying for their API calls.

🧠 Keep in Mind:

Many AI tools that improve customer experiences rely on personal data to do their job. The downside? Data privacy and consumer protection laws can be complex and varied depending on the location of your business, the platforms you sell on, and all your buyers. 

You certainly don’t want to find yourself in trouble with the law just for using a tool that was launched without pondering legal ramifications.

How can you protect yourself? 

• Make sure your AI tools ask your buyers for all relevant permissions and access.

• Be sure to stay on top of the changing landscape of data protection laws. 

• Consider letting customers opt out of personalization or data collection quickly and easily if they want. You may miss out on a few sales, but the trust you’ll gain could be priceless.

How to Scale Your Ecommerce Marketing With AI

While business tools like email lists and customer data reports are nothing new, introducing AI into the mix can level up your marketing processes. If used right, AI insights and automation can help you market strategically as you scale your business, not just more. 

Below are three major ways ecommerce businesses use AI in their marketing:

How to Use AI to Make Automated, Targeted Advertising 

Every customer shops differently. Some need to be reminded about items in their cart, while others need to be reminded every so often that your company exists.

Sending the same tired promo email to your entire mailing list is like chucking a handful of darts at a dartboard to see if one sticks. AI-driven targeting gives each dart a much higher chance of finding its mark.

AI targeting can:

• Help prevent churn by recognizing which customers need a little nudge (or the right incentive) at crucial times.

• Automate notifications, emailed personalized recommendations, or reminders.

• Send coupons and ads in the mail.

Think this sounds like a good fit for you? Check out tools from Pecan or the ever-famous Intuit Mailchimp as examples to start.

How to Use AI For Customer and Business Analytics

One other area AI excels in marketing is analytics. Every review, purchase, rating, or mention on social media has the potential to be a data point – but you probably already knew that. Businesses have been using analytics reports for years. What’s been so difficult about analytics until now has been aggregating the data in one spot, and, once it’s there, using it to gain meaningful insight.

However, modern AI analytics tools like Polar Analytics, Glew, and Observe.AI claim to offer features like:

1. Identifying customer tone, emotion, and intent when people discuss your products or company online. 

2. Predicting changing trends through rapid shifts in behavior and opinion. 

3. Integrating text, image, and speech into usable data points.

4. Highlighting potential demographics to target as viral fads evolve.

But you don’t even need to buy special tools to see the benefits of AI in data analytics. Enter some of your sales data into ChatGPT and ask for some insights if you haven’t yet. You’ll probably be impressed.

🚨 Reminder - Remember to always use caution when using customer data with AI.

How to Generative AI to Make Images and Text for Content

While using AI to generate text, images, or video - also known as generative AI, or GenAI - is definitely one of the more controversial AI tools out there, it’s still worth mentioning. 

You’d have to be living under a rock to have never heard of ChatGPT, and image generators like Dall-E and Midjourneyare starting to become household names too. If you’re stuck in an advertising rut or can’t think of exactly how to word your next marketing email, prompting one of these tools can at least give you a fresh place to start.

Imaging tools especially can help you display your product in different places or stages of use that would normally be expensive or time-consuming to photograph. In fact, big companies like Coca-Cola have already implemented GenAI into their own advertising through video creation and other marketing initiatives.

Be alert when it comes to quality control (QC), though, especially if you’re using free versions of software. QC in AI has been a known issue for a while, so be sure to have a human reviewer on board to scour any generated content for inaccuracies, inconsistencies, logical fallacies… and, notably, imperfect hands. 

🧠 Keep in Mind

While most customers won’t have a problem with AI for marketing automation or analytics, GenAI still has a pretty negative reputation overall.

Several studies within the last few years show people still see GenAI as a turnoff, with only 29% of participants in one survey responding that GenAI content is trustworthy. Another survey from the same article found 37% of respondents would be “less interested” in social media images or videos if they found out they were artificially generated.

In short, when consumers are aware that creative content is AI-generated, they tend to show a clear “human favoritism” and rate artificial work more negatively. Funnily enough, this is true even when they’re wrong about the source of the content - if customers even think something is made with GenAI, they’re more likely to turn up their noses at it.

If you think generated content is truly necessary for your marketing, consider an augmented approach that combines human and machine thinking. To get that real human touch, it may be worthwhile to try:

1. having people draft content while augmenting or expanding it with AI, or

2. having AI create drafts while people perfect the final versions.

In the long run, using real people in your creative processes could save your business from being branded as tacky or untrustworthy.

How to Use AI to Streamline Customer Support

Any influx of customers means an equal influx of problems. From basic questions to complaints and even fraud, one of the most important aspects of ecommerce scaling is being able to handle all the additional help your buyers need.

Let’s take a look at the most common ways businesses are using AI to support their customers.

How to Use AI to Detect Fraud

No customer wants to check their bank statement at the end of the month only to see hundreds of dollars of unauthorized purchases, or log into their points program with your company only to find all their rewards drained.

On the flip side, you might be getting tired of seeing notifications from your bank informing you of yet another chargeback - especially when you’re positive the reason given is a lie. 

These are the most common types of ecommerce fraud likely affecting you and your customers both. In fact, in 2022 chargeback fraud affected over 34% of ecommerce sellers across the globe, while 33% of shoppers experienced identity theft, having their card or account information stolen.

With AI fraud detection software, you don’t have to keep a cybersecurity team on the books to protect your business. All you need is an algorithm that analyzes shopping habits, flags unusual behavior, and alerts you and the affected parties.

AI has grown to do more than just flag unusual behavior, though. Using large-scale chargeback analysis, programs can collate data points to help you win chargeback cases and point out where there might be flaws in products or your business model that shoppers are taking advantage of. 

If you don’t want to find yourself part of that 34% of sellers above, check out tools from companies like Kount and Riskified.

How to Use AI to Do Ecommerce Customer Support

When it comes to interacting with customers, one study found that nearly 50% of surveyed companies already used AI. One of the easiest ways to find yourself part of that group is to implement an AI Chatbot. 

Customer service chatbots have two major advantages over human agents: availability and impartiality.

1. Shoppers don’t have to wait in line for a representative to become available. When questions are basic or easily answered with a link, address, or policy, chatbots can provide service in a few seconds instead of minutes or even longer.

2. Buyers generally feel more comfortable talking with AI than with another person when the question or product is sensitive. Computers also can't judge you - at least not yet.  If your ecommerce business handles potentially embarrassing products, like relief for certain medical conditions, you may want to look into chatbots sooner rather than later. 

Not sure how to get started on implementing a chatbot? Forbes has a list of reputable chatbot-adjacent customer service tools here, although some standouts include Ada and Aivo. 

🧠 Keep in Mind

Don’t forget – people generally don’t like to be tricked, and this is true when it comes to chatbot interactions too. Customers would much rather talk to something explicitly labeled as a bot over ones that try to disguise themselves as humans. Make sure it’s clear when people on your sites are talking to AI or a real person, or your buyers may walk away feeling unnerved.

That said, there’s still a large group of people who simply don’t want to talk to a computer at all. Over 80% of customers prefer to wait for a human customer service agent than get instant service with a chatbot. 

While that number decreases the longer the wait time gets, overall the research is clear that perceptions towards bots are still much more negative than positive.

The solution to this is simple: offer a chatbot as an entry point to the customer service interaction, but have workers on standby ready to assist immediately if the customer chooses to escalate. Doing so filters out easy questions and frees up the queue for the AI-naysayers, improving service times and keeping more customers happy.

Want to Scale Your Supply Chain? AI Can’t Help You (Yet)

You may have noticed one big area of AI implementation missing from above, and that’s using artificial intelligence to streamline your logistics. 

Successful ecommerce scaling simply can’t happen with a bottlenecked supply chain, and AI has started aiding businesses with everything from warehouse management to last-mile delivery route optimization to prevent just that. 

But wait, you say. You’ve just committed to spending significant amounts of time researching everything above, finding the best AI software partners for you, and rolling them out to help your ecommerce business scale. Now you’re supposed to go through the process again, at each link of your supply chain? 

Instead of doing it alone, a 3PL like OTW Shipping can help you get:

• Fast and accurate fulfillment – 99.99% order accuracy ensures customers get what they expect, on time.

• Optimized shipping – Multiple warehouse locations mean lower shipping costs and faster delivery.

• Real-time communication – A dedicated support team available through a Slack-like channel, so you always know what’s happening with your orders and can communicate quickly with customers.

• Scalable solutions – Whether you're expanding your eCommerce store or breaking into retail, our custom fulfillment plans grow with you.

Contact us today for a personalized quote. We’ll handle software integration, warehousing and inventory, and direct-to-consumer fulfillment for you, so you (and your AI programs) can focus on your products and your customers first.

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