Let’s face the truth. The e-commerce industry is hypercompetitive these days and the only key to winning this race is to earn customer loyalty. Yes, consumers are the ones who can make or break your success, so it’s them you should focus your business strategy on. In other words, to increase revenue and customer retention, you should make sure your online store is customer-centric. 

What is a customer-centric online store and how do you build one?

Simply put, customer-centricity – is a business strategy, where clients and their functional and emotional needs are prioritized. In e-commerce, this entails offering a perfect shopping experience, which is fast, convenient and enjoyable for every consumer. 

Of course, creating a customer-centric online store is not easy: you should analyze and optimize each touchpoint of the buyer’s journey: from product search to pricing. Sounds a bit overwhelming? Well, the good news is that AI is here to help. 

Artificial intelligence is rapidly changing the e-commerce industry. According to a recent research by Insight Ace Analytic, the AI-enabled e-commerce market size is estimated to reach $16.8 billion by 2030, increasing by more than 4 times, compared to 2021. Thanks to advanced AI technologies, modern e-commerce businesses can ensure a flawless shopping experience, while also increasing their revenue. Let’s take a look at some examples of industry giants using AI to stay on top of the competition. 

How e-commerce giants are using AI to enhance their customer-centricity?

Amazon 

As an ultimate e-commerce giant, Amazon embraced AI-powered automation long ago. A perfect example is Alexa, an AI-based voice assistant, released in 2014 and updated many times since. Used for everything from home automation to business management, it had a huge impact on the e-commerce industry. In fact, it is the one and only virtual assistant at the moment that allows customers to directly buy products with a voice command. With Alexa and Amazon Prime membership, consumers can shop and manage their orders without any websites or apps, only with their voices. 

Etsy

Etsy, another major player in the online shopping industry, focused on AI-driven customer-centric search as a way to make browsing its unique marketplace easier. Since Etsy sells exclusively vintage or handmade products listed by individual sellers, its assortment cannot be organized as quickly as with mass-produced items. That is why Etsy engineers built a customized AI model that combines both text-based analysis and image recognition to make the search as easy and relevant as possible.

Flipkart

Flipkart, an e-commerce leader in the Indian market, has also adopted AI technologies to improve its shopping experience. Operating in one of the most diverse countries in the world, the company uses Speech AI and NLP to reach its multilingual consumer base. Today, Flipkart’s interface is already accessible in Hindi, Kannada, Tamil and 4 other languages, common in India. Its voice assistant is less advanced and currently works only for English or Hindi speakers, but the company is actively working on addressing this gap.

7 ways to enhance customer experience at an online store 

With the industry giants actively using numerous AI technologies to become more customer-centric, the majority of small and big e-commerce businesses are following their example. If you are also looking to improve your buyer’s journey with the help of AI, here are 7 ways to do that:

1. Customer-centric search

Consumers these days have little patience when it comes to irrelevant search results. If they cannot find the products they are looking for at your online shop, they will move on to another one right away. Surprisingly, many e-commerce businesses don’t take this into account. For instance, a 2021 study conducted on the Nordic e-commerce industry showed that only 11% of users could see results that matched their search queries. 

However, using NLP and automated product tagging, you can significantly enhance the relevancy of your search results. What is more, you can offer a personal touch by customizing the results to your buyer’s preferences and shopping history. 

2. Chatbots

Chatbots are transforming the way in which businesses interact with their customers. Modern consumers expect fast and personalized communication, delivered 24/7, and offering any less can put your online store at risk. What is more, AI-powered chatbots have great business value: they allow large spending cuts while driving sales and customer retention. 

So what makes chatbots so effective? Well, they can do it all: answer questions, provide customer support, recommend products, remind about abandoned carts and many more. In other words, they contribute to a perfect shopping experience. You can get a better understanding of the business context and the technology behind e-commerce conversational bots by checking out our case study.

3. Voice assistants

Voice assistant is a step further in creating an effortless shopping experience. It is digital software that uses a mix of technologies, including ASR (automatic speech recognition), NLP and Machine learning to recognize, process and execute voice commands.

Probably the most well-known voice assistant used in online shopping is Amazon’s Alexa, which takes care of the whole buyer’s journey. While most assistants are not that advanced, they still accelerate the shopping process significantly by conducting product search, answering common questions and updating customers on their orders. 

4. Dynamic pricing

Dynamic pricing is not a new concept, but thanks to AI it has recently become a buzzword. Simply put, it is a flexible pricing strategy, according to which businesses set prices for products or services based on current market demand and supply. With the help of AI, e-commerce businesses can use data analytics to set the most optimal prices, taking into account consumer behavior, as well as competitor stocks and pricing. 

At first sight, the one and only objective of dynamic pricing is maximizing a company’s revenue, usually at the expense of customers. While this is true for inelastic demand (like water or prescription drugs), in e-commerce dynamic pricing can be a win-win strategy. Companies are competing to offer the most attractive prices out there, which only benefits customers. 

5. Recommendation systems

Another way to make your store more customer-centric is to offer a personalized shopping experience using AI-powered recommendation systems. This e-commerce technology is a sure way to increase customer conversion and retention.

By using data analytics and Machine learning, recommendation systems predict what customers are likely to buy based on their demographics, purchase history and overall consumer behavior. For instance, if a user is buying workout clothing, the algorithm will recommend them relevant sports gear. 

6. Localization of customer experience

With more and more companies expanding to global markets, localization of customer experience has become more important than ever. A simple translation of the website is not enough: content, recommendations and customer support should also be tailored to your local target audience. 

Various AI technologies, namely Speech AI and ML can help you localize your e-commerce business with little effort. For instance, you can start by implementing chatbots that can recognize and respond in multiple languages, as well as understand different cultures to ensure personalized and respectful communication. Building a multifunctional chatbot like that can be a challenge, but there are expert companies out there who can create a custom solution specifically for your business. 

7. E-commerce logistics

One of the most frustrating parts of online shopping is delivery issues. Changing delivery time or lack of updates on the order can damage customers’ trust and make them turn to your competitors. Here’s where AI-powered logistics applications step in. 

With the help of AI, you can significantly increase the accuracy of delivery time predictions, while also providing your customers with real-time updates on their orders. This may seem like a small change, but it will definitely make your e-commerce business more customer-centric, and, thus, improve customer retention. 

Wrapping up

Artificial intelligence is quickly becoming an integral part of a successful e-commerce business. Not only does it help to save your time and money by automating many tedious tasks and solving complex problems, but it also ensures customer retention and loyalty by making the online shopping experience much more pleasant. Creating a customer-centric store where all the needs of the consumer are met may seem like an impossible task, but with the right AI technologies, this can be done with minimal costs and effort. 

Wondering how you can implement AI in your own e-commerce store? Start by checking out Unidata Lab, an innovative company that creates custom AI solutions to match the needs of your business. Whether you want to build a multifunctional chatbot to deliver 24/7 top-quality customer service or an AI-powered recommendation system to drive sales and customer satisfaction, our experienced engineering team will help you with that.