How generative AI is transforming e-commerce How generative AI is transforming e-commerce

What is generative AI for e-commerce?

The consumer journey, personalised

Generative AI analyses customer data and behaviour patterns to enhance and personalise the consumer experience, driving online sales and retention.

THE NEW UX

Defining AI

Generative AI improves profit margins by optimising logistics

To cope with supply chain disruptions and shrinking profit margins, e-commerce leverages AI to streamline logistics across production, shipping, warehousing, inventory and pricing.

Optimised Ops

Are there roadblocks to generative AI in e-commerce?

Generative AI is a specific type of AI, used to create something new based on a given set of training data.

AI tools can target customers with tailored promotions to grow engagement and loyalty

Targeted marketing and advertising

The dynamic market ahead in online retail

To cope with supply chain disruptions and shrinking profit margins, e-commerce leverages AI to streamline logistics across production, shipping, warehousing, inventory and pricing.

Takeaway

AI tools can analyse customer browsing, purchasing and zero-party data to generate recommendations

Personalised consumer journeys

Large volumes can be rapidly generated by AI, translated and optimised for SEO

Optimised product copy and imagery

Product design

Offers customisation to consumers and rapid prototype development tools for designers

Mass customisation through AI design tools could help retailers avoid costly over-stocking

Inventory optimisation

AI can automate the organisation, tagging and curation of extensive catalogues for efficient management

Product data and category management

AI helps retailers optimise pricing and procurement based on real-time markets or consumer behaviour, help manage supplier relationships and negotiate contracts

Pricing and procurement

AI can help to reduce costs, improve efficiency and avoid delays

Supply chain logistics

AI computing is costly, driving up the cost of these services. While investments and venture capital are boosting growth today, it’s unclear if hardware, software and computing costs will decrease.

High costs

Poor data leads to inaccurate or biased results. AI depends on high-quality, accessible data that is collected, cleaned and engineered for specific use cases.

Data collection

Investors should recognise that businesses will need to navigate compliance regulations and ethical considerations while balancing the risk of data breaches.

Ethics and regulations

Even as retailers race to leverage generative AI, rapidly evolving capabilities and a lack of industry expertise could be barriers to effective implementation.

New technology

Collections of data used to train and validate AI

Datasets

Retailers can quickly generate high-quality imagery, showcase products and appeal to specific demographics’

Image generation

Understanding and generation of language for chatbots, search functions, product recommendations

Natural language processing (NLP)

Teaching machines to interpret and make decisions on visual data

Computer vision

Algorithmic data analysis with minimal human intervention

Machine learning (ML)

Human-like text creation trained on vast amounts of data

Large language models (LLMs)

Chips designed to handle complex calculations and parallel processing tasks

Graphics processing units (GPUs)

Conversational chatbots

Virtual sales assistants, tailoring product discovery, recommendations and deals in real time.

Tech Enablers

Capabilities

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Chris Iggo Chair of the AXA IM Investment Institute and CIO of AXA IM Core

Businesses that embrace AI should in turn provide investors the opportunity to benefit from higher profits and growing market share. In an economy which might be growing more quickly, AI can be a potential driver of better investment returns.

Investor Outlook

Using consumer data in AI requires consumer buy-in, which means retailers must balance privacy and consent with data collection.

Consumer trust

AI modelling can lack transparency and retailers will need a way to understand the rationale behind outputs.

Transparency