Artificial Intelligence (AI) is a hot topic at the moment. In the past six months alone it has dominated headlines, with rapid developments and novel deployments across many different industries already. In this article we’re going to look at what this might mean for the future of ecommerce – we will look at some of the AI tools already being deployed in the online retail space, but most of all, we will talk about the need for adaptability in the face of a changing technological landscape.
But first, let’s take a look back at the incredible developments we have seen in just the past year already.
The Future is Coming
In 2018, a non-profit group called the Institute For The Future (IFTF) assembled a team of business and tech experts to author a report on emerging technology trends. In that report, which was published by Dell Technologies, these experts made a strong prediction:
85% of jobs that will exist in 2030 haven't been invented yet.
The report said that by 2030, artificial assistants would be helping us with all manner of different tasks… while the best advice the IFTF’s experts could offer to students, young people, and anyone else with a whole career ahead of them still, was to never stop learning.
It is now 2023. We are almost halfway to the future that the 2018 report was describing. And from here, it’s hard to argue with the institute’s predictions.
In just the last six months, AI has entered the public realm in force – most notably in the form of AI language models (for example, ChatGPT) and AI image generation tools (for example, Midjourney). Since then, barely a day has passed without some new AI-related headline in the news. From AI chatbots malfunctioning and appearing to claim sentience, to AI-generated art winning photography contests, to publishers having to close their doors to new submissions after being overwhelmed by the rapid influx of stories written by computers.
In March, a group of top tech experts including Elon Musk, Apple co-founder Steve Wozniak, the Skype co-founder Jaan Tallinn, and others, signed a letter calling for a moratorium on advanced AI research. At the rate things were developing, they warned, and with various different corporate entities vying for superiority in the emergent AI space, this so-called AI-race could, in the worst-case scenario, pose “profound risks to society and humanity.” For that reason, they stressed the need to slow the evolutionary process down, take a breather, and maybe talk about putting some checks and balances in place – software limitations, legislation, and so on – before things got out of hand.
Meanwhile, AI technology is now (just as the IFTF predicted) creating all kinds of new employment opportunities for those able to keep up with it. In February, a San Francisco tech company raised eyebrows when it began recruiting for an “AI Prompter” position… with a salary offered in the range of $250,000–335,000.
With AI rapidly finding application in all manner of different fields, brands, retailers and marketers may well be pondering the question: What does the future of AI-powered ecommerce look like?
AI Shopping for Consumers
The IFTF report suggested that by 2030 it would be commonplace for us all to be using AI virtual assistants in our day-to-day life. Now these tools are becoming a reality for online shoppers.
For a few years now we have seen the first AI shopping assistants beginning to appear, typically in the form of eshop plug-ins that look similar to traditional chat support boxes. Rather than requiring the shopper to search a store by keywords, these assistants instead allow searches to take the more natural form of a conversation.
For example, Ochatbot launched in 2020, and developer Ometrics claims that it has an excellent conversion rate, with 1 in 4 interactions leading to a purchase – typically increasing users’ revenue by 20-40%, as well as reducing support tickets by 25-45%.
More recently, Shopify launched its own official AI assistant. Powered by ChatGPT, Shop.ai is a more advanced shopping AI than those that came before it. Essentially the system allows for a more organic and naturalistic approach to finding products online. The virtual assistant is also capable of some degree of lateral “thinking.” So let’s try an example:
Typing “I’m too hot” into Shop.ai brings up the response:
I'm sorry to hear that! Unfortunately, as a chatbot, I can't control the temperature around you. However, I can suggest some products that might help you cool down. Would you like me to do that?
Alongside that answer appear product listings, in the categories of Fans, Air Conditioners, Ice Packs, and Cold Drinks.
Another test: “I need a fashionable item of clothing that will make me stand out at an evening event.”
Shop.ai responds to this:
Of course! Here are some ideas for fashionable clothing items that could make you stand out at an evening event:
- A sequin dress or top
- A jumpsuit with a bold print
- A statement blazer or jacket
- A maxi skirt with a high slit
- A metallic or beaded clutch
- A pair of strappy heels with embellishments
Once again, a curated selection of product listings appears alongside the answer. Users can specify whether they are looking for male or female clothing, they can specify a price range, or a season… in short, the system serves as an effective shopping assistant, and it is easy to see how it’s likely to lead to more sales, by making online shopping a quicker and more effective process for the customer.
A November 2022 report by GlobalData on AI shopping assistants suggested that while this was still an emergent technology, the inevitable widespread use of AI in ecommerce had the potential to be a truly innovative and disruptive development. Of over 122,000 patents granted in the retail space over the last three years, they identified around 70 which were likely to shape the ongoing future of the industry – with significant potential application not just in AI shopping assistants, but also in areas such as autonomous delivery management, checkout and in-store object identification, intelligent ads, and more.
In short: everything is going to change in the next few years. The pandemic and related lock-downs made online shopping the default retail experience for many consumers, and now technology is on track to make online commerce more streamlined and more intelligent than ever before. AI shopping assistants are one of the most obvious and immediate applications for artificial intelligence in the retail space – but it won’t stop there, and right now it’s hard to even imagine what online commerce is going to look like in 10, or even in just 5 years from now.
AI Shopping for Retailers
So where does this leave online retailers? How are you supposed to keep ahead in a future that hasn’t been invented yet?
In Shopify’s report on Commerce Trends 2023, they told us: “Global brands need logistics practices that can adapt quickly to a continually changing ecommerce landscape and attract the buyers of tomorrow.”
The IFTF report stressed that professionals of the future would need to adopt an approach of flexibility and lifelong learning, and the same goes for businesses operating in spaces such as retail, which are likely to see rapid technological development with the industry-wide roll-out of AI systems.
One aspect of this will involve offering shoppers the best experience possible on your own store – with the addition of an AI-powered shopping assistant, for example. However, there are already AI-powered tools available for retailers to use too. For instance, Shopify now offers retailers the option of automatically generating product descriptions using AI. Using Shopify Magic Text Generation, retailers only need to add a few notes and keywords to a listing, and the AI-powered assistant will then complete full listings, or suggest rewrites of existing content. Particularly for larger retailers with many products on offer, this is clearly going to be a significant time-saving tool.
We have also spoken previously about the work being done by companies like Shiptheory – who stress the importance of automation. Shiptheory’s holistic and tech-savvy approach to supply chains involves the integration of many individual processes (such as database management, label printing, and shipment tracking) into fluid and automated streams. Shiptheory’s Rita Jenkins told us that in this new era of retail, merchants will need to “explore innovative methods to enhance their value proposition, and embrace automation to streamline operations – don't be afraid of change.”
A March 2023 report from Bluestone PIM also demonstrated that “If you are a retailer, you can't afford not to join this AI game.” In particular, they highlighted 6 key use cases for AI from the perspective of retailers:
1. Omnichannel customer shopping experience
2. Better-tailored marketing activities
3. Increased customer engagement
4. Personalized customer service
5. Optimized business processes
6. Less human errors and more room for creativity
Once again though, with so much of this technology in a state of constant and emerging evolution, the overriding advice to retailers right now boils down to this:
Pay attention, and be ready to adapt.
The Next Era of Ecommerce
We are living in a unique time in history. Technological advances are coming so quickly now, and so close together, that it is virtually impossible to predict the future with any degree of certainty. The IFTF’s research director, Rachel Maguire, has highlighted the focus this would put onto the development of lifelong learning skills. Gone are the days when students finished college with an education, and then entered the workforce to put what they had learned to use. In today’s world the lines between education and career will increasingly blur, with a greater emphasis on on-the-job learning. According to Dell Technologies:
“The pace of change will be so rapid that people will learn 'in the moment' using new technologies such as augmented reality and virtual reality. The ability to gain new knowledge will be more valuable than the knowledge itself.”
At Alvio, we talk a lot about adaptability. In our Supply Chain article a few weeks ago, we said:
Alvio wants to help you build a business that is truly, universally, adaptable. Future-proof.
We are deeply committed to that idea. We believe that in these exciting yet uncertain times, adaptability, and being able to continuously learn and grow, are going to be crucial characteristics for any successful business. We believe that blockchain technology, and the powerful authentication models it unlocks, will also be an integral factor in the future of ecommerce – which is why we’re so keen to work with clever blockchain companies like Prove Anything, whose toolset is constantly adapting and expanding to answer evolving trends and capabilities.
We don’t know exactly where these developments are leading us yet. But we are ready to find out. With partners like Shiptheory and Prove Anything, and with a future-ready partnership platform that gives more agency back to individual retailers by allowing them to collaborate, network and grow, we are ready to embrace the future of AI-powered commerce – and we are excited to share that journey with you!
