Your Commerce Health Check

Artificial Intelligence in Retail

Artificial Intelligence in Retail

Published on 2019-04-11 by Brad Houldsworth

An introduction to eCommerce A.I.

Artificial intelligence is no longer just a buzzword. Businesses are thriving from using the services, but the question is will an automated service ever take over from a human one and will it complement or replace it?

AI is typically assimilated to a robot who can think logically without emotions, and then make rational decisions with fewer or no mistakes than humans. It will have a low or 0% error rate and deliver with precision. AI helps staff do their jobs more effectively, rather than putting their jobs at risk of becoming redundant. AI could also open more opportunities and drive up conversion rates, for example, a chatbot who requires support can transfer to a human operator, more as a supervisory role stepping in when they need to only. It could reduce some of the workload humans have to do, freeing them up to do more intuitive, creative work that they are better suited to. However, the question remains whether automation goes too far.

There is, after all, no point in implementing any kind of technological solution if it doesn’t create benefits for customers, or the organisation itself.  With that in mind, it is important to consider when an AI solution needs the support of the human touch, particularly when empathy is required. On the other hand, AI can be utilised by live chat agents to help them to be more rapidly and efficiently find the best solution to customers' issues in their knowledge base.


Chatbots are often used to capture customer needs as the first point of call to recognise and then deliver frequently asked questions before being escalated. It is hard to build up a rapport with a bot, they are just responding as a matter of fact, rather than having the types of conversations that two humans can have with one another. However, if the answers are accurate, the customer will still hold a high opinion of the organisation as they are able to respond quickly. Yet, there is also still a need for the human touch because not all enquiries will want to speak with a bot, or the bot won’t have all the answers, so there will be times when a human operator needs to get involved. It comes down to the ability to listen, understand and respond and act appropriately. Humans can still do that better than non-humans. However, this could be replicated over time because AI tech is evolving fast, and algorithms are becoming more and more advanced and fine-tuned.

From a customer perspective, when speaking with a chatbot, there is no need to fill in lengthy pre-chat forms before entering the conversation. The chatbot can gather this information from the enquirer, which means they feel like they are already progressing as dialogue is occurring. If the chatbot is then able to answer all their questions, then this has happened in a quick manner which is only bound to increase that customer’s satisfaction. If an operator needs to get involved, then the transaction needs to be smooth, and then they can pick the enquiry up where the chatbot left off, allowing them to continue the interaction seamlessly, rather than getting the customer to repeat themselves. The bot might be programmed to escalate or ask further questions. So, the quality of interaction depends on how well the bot conversation is designed and the expectation around what a chatbot can and cannot understand, and then answer and do.

So, depending on the limitations of some chatbots, they could prove to be more frustrating than interacting with a human being. Therefore, they should ideally be used for simple tasks, because of their limited functionality. 

Human vs Chatbot

For the moment the modern human live chat interface allows customers to be understood at a deeper level. Although, with a chatbot in place it can make chat operations more efficient whilst maintaining or improving customer satisfaction. So, they both have a place within this digital era, however, for now, human live chat has the edge. Still, chatbots can add value for both the customer and the organisation. This can also increase efficiency in terms of time and financial savings in customer service. 

In conclusion, there are times when it is best to use a bot versus a human, but when it comes to tackling a range of tasks, from simple and repetitive to sensitive and complex, bots and humans work better together.

The perfect blend of AI for customer service

Here are some tips for balancing AI, machine learning and the human touch to achieve the customer service best practices. 

  • Fully understand what an AI chatbot is capable of, without this, your company could plan for an instance that is not possible.

  • Have a strategy in place of what exactly your company expects from the chatbot, is it going to prequalify a visitor before transferring to a human operator, or will it answer frequently asked questions and transfer when it cannot answer?

  • Test it before placing the chatbot within a live environment and real customers, test it thoroughly to ensure it responds as expected.

  • Ensure you know what the chatbot is going to do if your human operators are unavailable. Telling an enquirer there’s no one available to help and to try again later is more likely to cause customer frustration than offering for a representative to contact them.

  • Constant monitoring – ensure your bot is meeting expectations and identify areas for improvement.

AI visual merchandising

Let’s now take a look at ways AI can assist specifically in merchandising, it can become tricky matching your business interests with those of your online customer, it is definitely a delicate balancing act. On one hand, you want the customer to find the product that they are looking for, but on the other, you also want to influence their purchase decision based on your preferences, (i.e. if a certain product has a higher margin, too many of one product in stock, or end of a product line, etc.) 

Successful merchandising is not enabled by just one tool. It is a mixture of various techniques and it is a case of deciding which tools will work best for you and your customer.

Of course, there are the obvious features you’ll look out for when selecting a merchandising system: perhaps the support for Site Search being one, with all the modern enhancements like type-ahead support, fuzzy settings, synonyms, guided navigation, automatic filtering etc. 

You also need to check if you can factor in real-time stock levels, make sure the commercial aspects are up to date and do they reflect what is available. 

AI Dynamic Landing Pages

Take a look at your landing pages, can you create pages dynamically without any development intervention? Has your customer searched for a specific brand? Wouldn’t it be great to have them land on a page dedicated just to that one brand? Alternatively, they may search for a category, for example, black dresses. Why not have them land on a page dedicated to black dresses and additional accessories with promotions relevant to their search? Increasing the number of products your customer sees in the time they are on your site is a clear way of capturing their attention. They get to experience a larger variety – increasing the chances of them making a purchase.

Successfully blending product, previous order data, customer behaviour and stock level information with the real-time context of the customer allows for very powerful merchandising. it is like creating an individual world for your customers.

Can AI take this a step further?

If we think of a personal stylist, it immediately brings to mind someone who, on an individual level, understands their client and styles them accordingly. The idea that this can be done on an e-commerce platform, for online shoppers, seems absolutely flabbergasting. That, however, is exactly what an AI stylist is capable of. Welcome to the ever-evolving world of eCommerce!

AI Stylist

Adding an AI Stylist to your website can help you transform the customer experience, increase AOV, and improve customer retention. 

To influence a customer to buy, a retailer first requires the customer’s attention to understand their behaviour and context! The customer could be looking for something specific or casually browsing through your site. Either way, they would not have the patience to dig too deep into your site and see all your products. Their impression of your brand/products and their decision on whether they will purchase from you is made in the first few seconds they are on your website. 

Increasing the number of products your customer sees in the time they are on your site is a clear way of capturing their attention. They get to experience a larger variety, therefore, increasing the chances of them converting as a shopper.

With an AI stylist, your customers get to view 3x more products every session. For every product that the customer views, they also get to see other products that they can be styled with. You get to recommend a variety of products across categories on each page thus broadening the awareness the customer has about your site and what you have to offer them. That’s not all, the products that are recommended are real-time personalized to the customer’s style preferences, ensuring they like what they see on your site. People see more products, people buy more products! the AOV (average order value) of every cart goes up.

AI Average Order Value Increases

When customers use an AI Stylist, they aren’t just buying clothes. They are buying a journey, a personal fashion experience just for them. Instead of buying just a black dress, your customer is now going to be buying the dress, a clutch, a jacket, accessories, and heels that will make them feel ready from head to toe for the occasion they were shopping for. The entire outfit has been created in a way that is truly their style.

This enhanced experience has left your customer delighted and satisfied and likely to return. Customer retention is one of the key focuses for retailers, the loyalty of an existing customer is just as, if not more, important than recruiting a new one. It is a very expensive mistake to lose customers in today’s market.

An AI-powered styling experience is not just satisfying, it is also very addictive. Your customer sees different styling inspiration from your clothes and can buy it right there, they would get comfortable with them. Buying a dress without getting personalized styling suggestions is no longer normal for them, in fact, they start to rely on their trustworthy fashion stylist ‘friends’.

And that’s not all……The more time your shopper spends on your website, the more personalized the outfit recommendations become. This means the longer your shopper spends on your website, the more difficult it is for them to switch to another. Win-win!!! 

An AI stylist isn’t the only up-and-coming AI must-have in fashion eCommerce, here are two other AIs that focus on online merchandising and customer experience.

  • Similar product recommendations-Customers will abandon the site when an item is out of stock, not in their size or it is not exactly what they were looking for. This is when AI comes to the rescue. Through computer vision and algorithms, it is possible to automatically suggest similar items when a customer is looking at a specific garment or accessory on a brand’s website or online marketplace. It is also a useful feature when customers can’t find the exact item in the right size, reducing the chances of abandonment.

  • Visual Search-Ever tried to find something online that you really liked but didn’t really know how to exactly describe it with words? It can be frustrating and time-consuming. The visual search aims at eliminating such hassle by enabling consumers to take a picture of a product in order to search for it online. With the use of computer vision and image recognition, visual search solutions match the image uploaded by the consumer with the closest image in the retailer’s catalogue.

To summarise the benefits of adding AI technology for retailers are clear, from increasing AOV to increasing customer retention and overall revenue, there really is no downside to introducing an AI friend to enhance your customer’s experience.