AI in E-Commerce Apps: Boosting Sales and Improving Customer Retention

Ujjwal Bhardwaj

• 5 min read
AI in E-Commerce Apps Boosting Sales and Improving Customer Retention

AI in E-commerce is a fascinating subject. It’s merging two very important trends, which is e-commerce and AI-driven applications. Over the years providing AI development services, I’ve noticed a great shift toward the use of AI particularly in e-commerce apps. I’ve noticed brands turning to AI to, ironically, personalize shopping experiences and automate iterative work. In this article, we’ll discuss in greater detail how AI is transforming e-commerce apps and what the future holds 

Pandemic to pandemonium: The turning point for AI-driven apps 

Online shopping is nothing new. But I remember it caught on during the pandemic. It soared by 55% in the US alone in 2020, according to a report by Algolia. Meanwhile, the AI software market hit over $62 billion in 2022. It’s not a coincidence that both sectors have been on an upward trajectory.  

But why exactly did AI-driven e-commerce catch on at this time?  

Well, demand for online shipping services went up, while staff for retailers headed the other way. This dearth in demand and supply made many businesses welcome AI to the fold, helping to shepherd purchases and guide e-commerce experiences.  

Conversational chatbots  

AI-driven chatbots are fast becoming the first line of customer service in commerce apps. These can receive leads, answer their initial customer and even hand over the sale to a human agent to close the deal if need be.  

We need not search far and wide to get great examples of chatbots in action. Here are a few common ones:  

  • Sephora’s AI, e-commerce shopping assistant – Sephora is an e-commerce brand specialized in cosmetics products. Its AI chatbot gives shippers a short quiz to understand their needs and offers product recommendations to encourage purchases.  
  • eBay ShopBot – If you’ve used eBay before, you may be familiar with this one. It’s basically a virtual shopping bot that works via Messenger. You can ask it a question, and it will provide instant answers and direct links to the goods you’re looking for.  
  • Botsify – This omnichannel live chat service has a huge range of auto-responses that it provides based on a shopper’s first interaction with your brand. It can help you capture and guide leads through your sales funnel. 

There’s no shortage of options here, but AI-driven chatbots are essentially driving engagement, and ensuring timely and interactive customer experiences that drive sales. If you’re still not sold on the importance of AI development services, let us move on to other key examples.  

Voice shopping 

Alexa and Siri provide great examples of intelligent natural language processing in action. These smart assistants can understand human language, decipher its meaning, and offer an appropriate response. 

I’ve seen many AI developers jumping onto this bandwagon to add voice-driven AI search features to their e-commerce apps. Compared to traditional solutions that require a lot of scrolling and clicking, AI-driven features make work light and more convenient.  

You can look up items by voice commands, and even complete entire purchases without typing a single word.  These features are typically linked to smart speakers such as the ones I mentioned earlier and are helping brands elevate online shipping experiences like never before.  

Also Read: How Artificial Intelligence Used in Transportation

Dynamic pricing 

In the past, retailers would just set a flat rate for their products. Then customers would buy what they need at that price, no matter the prevailing market conditions. This essential meant that you’d miss potential revenue opportunities in case demand for that product went up unexpectedly.   

Now enters AI-driven dynamic pricing features. This allows your e-commerce app to automatically adjust prices depending on real-time data. If demand goes up and your competitors are out of store, you’ll get an alert to adjust your prices so that you can cash in on the trend.  

Augmented and virtual reality 

e-commerce apps are taking their game up a notch with intelligent AR and VR-driven apps. These help to simulate and replicate online shopping experiences with users not having to leave the comforts of their homes.  

Here are some examples of this that I found particularly interesting:  

  • IKEA Place – Imagine being able to scan a room and envision how a piece of furniture would look like in a space: That’s exactly what this app is about. It enables you to try out different options with AI-powered shopping before you can make a decision. 
  • Nike SWOOSH – Taking eCommerce to a whole new level, Nike launched a marketplace exclusive for virtual products. You can access this marketplace via an AI-driven app to trade virtual sneakers with NFT.  

From virtual changing rooms to try-on experiences, AI-driven shopping is one AI development service that continues to impress with its convenience.  

Personalization 

Did you know that 73% of customers prefer to buy from brands that offer personalized shopping experiences? That’s according to findings by Digital Trends.  Personalization is a priority but one that’s difficult to achieve with a huge customer base.  

Many AI development service providers are now turning to AI to make this happen. They leverage AI-driven features to collect app user data and create customer experiences much in the way a tailor customizes a suit.  

With these algorithms able to monitor app usage patterns and behaviors, they can allow developers to automate personalization. When this happens, users feel extra special, app engagement improves and sales go up too. 

What are the benefits of using AI in e-commerce apps?   

There’s no shortage of the use of AI in ecommerce applications with there being more than plenty of examples to go around. But what exactly are the benefits of using AI in ecommerce apps? What do they bring to the table? Here’s a quick look at its advantages: 

Improved user experiences 

E-commerce is very competitive given the growth of online shipping and delivers an excellent user experience that offers a competitive advantage. AI enables this by helping to personalize user experiences and anticipate their needs as well.  

Fewer product returns 

Many times, shoppers often return an item because they feel it may have not been the perfect fit. AI development services change this through data-driven product suggestions that help match users with the right products. 

8. More sales 

Building off the last point, AI can suggest more compatible product offerings for buyers. Furthermore, it can suggest complementary purchases to help you take advantage of cross-selling and up-selling opportunities to generate more sales and revenue.  

Parting shot: AI in e-commerce has its challenges 

AI brings a lot to the table for e-commerce apps, but it’s far from perfect. There are certain ethical considerations and regulatory compliance issues to think about, particularly regarding the collection of user data. In addition, algorithms can also develop bias especially when data quality is poor. To help avoid these challenges, I recommend working with an experienced AI development service to ensure proper AI adoption into your e-commerce application.  

Author bio  

CR Venkatesh is an Indian-based entrepreneur, and the CEO of the super-successful app development and digital marketing agency, Dot Com Infoway.  

An engineer by profession, CRV, has a knack for software development. He’s bagged many high-profile awards, including IT Professional of the Year at the Golden Globe Tigers 2016.