How Generative AI is Impacting Ecommerce

The ecommerce industry is one of the early adopters of emerging web technologies. Unsurprisingly, Generative AI, an advanced machine learning technology, has caught the attention of ecommerce businesses. Key stakeholders, including solution providers and entrepreneurs, are exploring new possibilities that generative AI in ecommerce brings.

Gartner made a bold prediction of the still-evolving technology in an extensive study. It forecasted that 30% of outgoing marketing messages will be generated by generative AI in 2030, a stark contrast to the 2% in 2022. Globally, generative AI will make the broader AI market, worth $207 billion, more attractive to investors.

So, it’s plausible for you to consider building an AI solution for ecommerce to provide an edge in the competitive market. In this sense, my experience leading the tech team at Uptech will be helpful. We’ve recently built Dyvo.ai for Business, an app that uses generative AI to automatically allow ecommerce owners to create vivid, professional-like product photos.

On top of that, we’ve developed other apps that integrate AI technologies, which I’ll explain later in this article.

How Generative AI Benefits The E-commerce Industry

First, let’s gain a deeper understanding of what generative AI is. Generative AI is a robust artificial intelligence algorithm that predicts and creates new content based on the provided data. It uses advanced machine learning models that learn by identifying specific patterns from training data. Then, the models use the stored intelligence to create new, unique text, images, or videos.

So, how does generative AI positively impact ecommerce in general?

Ecommerce businesses focus on delivering better customer experience to improve conversion, retention, and growth. They rely on creative messaging, captivating visuals, efficient deliveries, responsive customer support, and more to build a strong presence and brand loyalty. As such, generative AI has many opportunities to bring efficiency and empower creative works in this space.

For example, you can use generative AI to craft personalized marketing emails for every customer based on their past interactions and transaction data. Customers can also search for products, track deliveries, or arrange for returns by chatting with a generative AI-powered chatbot.

Generative AI brings efficiency into existing ecommerce workflows by integrating with other systems and processing data at scale. For instance, generative AI can help your team to create a competitive pricing strategy by analyzing competitors’ product prices and other market variables. Likewise, marketers can use AI to create catchy product descriptions, optimize them for SEO and automatically pair them with the appropriate images.

An overview of the generative AI in the ecommerce market

The ecommerce market has largely been optimistic and quick to adopt generative AI. Early usage of the technology focuses on product customization and personalizing customer experience. Ecommerce companies have also used generative AI to engage customers with chatbots and provide immersive virtualized store experiences.

Here’s a quick look at the trends that generative AI is shaping in the ecommerce industry.

Generative AI in ecommerce is predicted to hit $2.1 billion in 2032, growing at a CAGR of 14.90%.
North American ecommerce players will lead the charge in transforming customer experience with generative AI.
Demands for an improved customized experience, customer engagement, and product recommendations are key drivers of AI adoption.
Ethical concerns and data quality are major barriers to the widespread usage of generative AI in ecommerce.

Popular Generative AI Use Cases In Ecommerce

Generative AI introduces new possibilities for how business owners can set up, manage and scale an ecommerce store. Recently, a tech startup, Hype, launched a generative AI-powered service that allows users to launch an ecommerce store in seconds. It provides a glimpse of what this powerful technology could do in different aspects of ecommerce business.

Generate product descriptions & content

All ecommerce stores need engaging and descriptive text to inform, educate and sell their products to customers. Generative AI models, such as GPT, LLaMa, and PaLM, provide natural language processing and understanding capabilities to create attractive product descriptions. For example, marketers can produce relevant, engaging, and grammatically correct textual content for their stores by providing basic product information and brand voice to the AI tool.

Create professional product images & ads

One of the factors in running successful ads is to test the copy with different images and messages. Generative AI, specifically those using generative adversarial networks (GAN), allows marketers to create unique product photos that help in their ads campaigns. As a major innovator in the AI space, Meta introduced AI Sandbox recently. Still in its early stage, the initiative allows Meta to collaborate with publishers to test various AI tools to automate ad creation. Imagine that in a year or so we all won't get the same ad campaign, but each ad image and text will be customized and tailored specifically for YOU. Yeah, with AI it's possible!

On the same note, Uptech’s Dyvo for Business is an AI image editing tool specifically made for ecommerce use cases. It allows marketers to perform background removal and insert intriguing backgrounds to create studio-quality product photos.

Design new products

Ecommerce businesses must continue to innovate products to meet changing trends and customer demands. Generative AI provides business owners the means to do that with ease. For example, they use AI software like Midjourney, DALL-E, or Stable Diffusion to generate new product concepts by providing descriptive text as prompts.

Provide eCommerce consultation

Shoppers prefer to shop without the attentive eyes of a salesperson, whether physically or online. So, an ecommerce chatbot shall be non-intrusive but ready to respond when required. And this is made possible by generative AI algorithms.

With these linguistically advanced AI consultants, shoppers can search for a particular product by stating what they want conversationally. For example, shoppers can state that they’re looking for an “S-size dress for women fits for a wedding’ to find a matching product instead of going through a series of questions and answers.

Augment customer support

Rather than expanding the support team, generative AI lets ecommerce businesses scale their support capacity at a minimal cost. Generative AI chatbot excels in understanding and responding to natural human language. They can interpret questions correctly, even when expressed in different styles or nuances. More importantly, you can train the AI chatbot on your range of products, allowing it to provide relevant, prompt, and concise answers to shoppers.

Prevent fraudulent activities

Generative AI is also a reliable watchdog for ecommerce businesses to spot suspicious activities. Bad actors may attempt to take over the store or pose as customers to compromise business activities. Online store owners can reduce such risks by using AI to analyze transactions or actions in real-time and impose restrictions on suspicious users.

Provide customized product pages in real time

Amazon personalizes customer experience by providing product recommendations based on shoppers’ historical transactions. Generative AI can bring more customization to the customer’s journey. It can tap into the customer’s data and populate the entire shopping page with products they might be interested in. This way, every shopper will see a unique product page created in real time.

Generative AI also allows retailers to virtualize their products and allows shoppers to try them with augmened reality apps. With virtual-try on services, shoppers enjoy an immersive and convincing experience that leads to better purchase decisions and lesser returns.

Optimize inventory and supply chain management

Generative AI provides clarity to retail owners on logistic and inventory variables. It helps managers make informed, data-driven decisions. The AI model can analyze historical sales data, predict near-term demands, and analyze customer sentiment to adjust inventory capacities. Such insight allows ecommerce retailers to stock up sparingly and take advantage of opportunities for on-demand products.

How To Leverage Generative AI In Ecommerce

Generative AI is still in its infancy despite growing adoption by ecommerce retailers. Its ability to scrutinize large amounts of shoppers' data, automate marketing operations, deliver personalized shopping experiences, and more is tempting solution providers to join the AI race. Yet, there are many uncertainties about how generative AI would unravel and impact the industry in the broader sense.

If you plan to use generative AI to maintain your competitive edge in the ecommerce market, pay attention to the following points.

Start by identifying a specific workflow in your ecommerce operation that would benefit significantly from generative AI. For example, if you’re spending too much time creating ad copies, you’ll want to use AI tools that automatically write the copies and create relevant photos.

Be prepared to test the effectiveness of different AI tools and use those that provide clear results in your business. At this moment, large technological enterprises, small businesses, and individual marketers alike are navigating the fast-changing dynamics of generative AI. What works well for another business might or might not perform similarly for you.

Training a generative AI model is prohibitively expensive and tedious. For example, OpenAI is believed to have spent $4 million to train GPT-3. Rather, use existing generative AI APIs or solutions instead of investing excessively in the technology.

Generative AI is not perfect and may produce incorrect or biased results. So, double-check all text, images, or videos that AI produce before publishing them on your store. This prevents providing misleading information that might erode your customer’s trust.

Why Team Up With Uptech To Build Generative AI Ecommerce Solutions?

Generative AI development requires specific skill sets that few ecommerce businesses possess. In most cases, it’s more practical to collaborate with an AI development company with a proven track record in the ecommerce industry. Doing so allows you to focus on business growth while your IT partner handles the complex technical part of AI.

Uptech is a global app development company that helps startups and businesses embrace generative AI technologies. In recent months, we completed several projects that showcase our technical competencies and understanding of real world AI use cases.

Dyvo.ai is our initiative to let users create social media avatars from selfies with generative AI. Then, we expand the solution for the ecommerce use case by using the same deep learning model to generate mesmerizing product photos. We provide APIs to ecommerce owners to access Dyvo’s AI capabilities.

Our team also integrated Plai, an HR performance review solution, with generative AI that creates employee growth plan from the collected feedback.

With 7+ years of serving global businesses, our app development team firmly understands the ecommerce market. Some of our past works include developing, revamping, or enhancing apps for ecommerce retailers. For example:

We helped GOAT, a retailer in the apparel marketplace, optimize its app workflow for a better user experience.
Our team optimized Dollar Shave Club’s customer-facing app with new engaging features.

Summary

The transformation that generative AI brings to the ecommerce industry will be fast, far-reaching, and impactful. It’s now a race between ecommerce players to figure out how to apply the technology effectively in their operations. I’ve shown several considerations you must take to ensure you stay on the right path in your AI strategy.

Alternatively, contact our team with your ideas and let us make generative AI work in your favor.