AI and Retail: forecasts for e-commerce
Confronted with the pandemic, globalization, and new consumer expectations, especially regarding environmental impact and the ROPO (Research Online, Purchase Offline), retail is evolving. Artificial intelligence tools developed to meet these challenges exist, but have the professionals seized them? Adoption, deployment, expectations and obstacles are at the heart of this new study proposed by OpenStudio.
The results of this survey are based on 132 retailers from all sectors.
Artificial Intelligence has already become indispensable for the big names in e-commerce, and it will become a must for all merchant sites, regardless of their size.
Cédric Sibaud, Associate Director of OpenStudio
E-commerce is a sector in perpetual mutation which must constantly renew and modernize itself to cope with economic and societal changes.
Whether it is a phenomenon like globalization, or a shock such as the Covid-19 pandemic, e-businesses must e-merchants must be flexible and above all be able to anticipate trends. With the number of e-retailers constantly increasing, and web giants with colossal means, the competition in the world of e-commerce is tough.
The evolution of consumer expectations are also factors to be taken into are also factors to be taken into account in order to continue to be in phase with the market: personalized services Increased sensitivity to environmental issues, and increasingly multi-channel purchasing paths.
AI is the most popular way for retailers to improve the performance of their e-commerce platform, 98% believe that AI could improve it, including 62.5% significantly.
AI as a priority and/or useful
Update, manage & enrich customer databases 90%, Automate order preparation and shipping 89%, Detect fraud & anomalies/secure payments 89%, Understand/model/predict Internet user behavior 89%, Synchronize catalogs with all third-party applications 88%, Forecast sales and manage inventory 86%, Update catalogs and pricing in real time 85%, Make the customer journey more fluid, ROPO 85%, Source: OpenStudio
Increase sales but also improve customer relations
Retailers’ expectations of AI are very high in all areas, but the priority is to increase their turnover (priority for 47% of them) followed by improving customer relations (43%).
This improvement in customer relations is a very important issue. Indeed, the Future Shopper WPP study reveals that if 74% of the French want to continue to buy online, almost 2/3 expect retailers to improve, not only in terms of products/services offers but also in terms of online shopping experience. Retailers have understood this trend and it is the chatbot/voicebot that will benefit from the highest development rate in the next 18 months with a forecast of + 124% of additional implementation, bringing their equipment rate from 28% to 63.5%. Retailers are also betting on virtual reality shopping solutions, which will more than double from 28% today to 57% within 18 months (+106%).
AI deployment in 18 months
AI to process Big Data 72%, AI to enrich customer data 65%, Chatbot / voicebot 63%, AI for analytics 63%, Source: OpenStudio
Read also AI impacts on the hotel industry
Profound changes in shopper behavior
The Future Shopper WPP study also highlights the change in buyer behavior. 54% of them want to find their brands on all channels: social networks, website and stores. This expectation is even more pronounced among 25–44 year olds. 60% of them in France say they prefer to buy from a brand that has both physical and digital outlets.
Here again, retailers’ expectations are high: 85% of them believe that AI is an asset to help them streamline the customer journey (ROPO — Research Online, Purchase Offline).
The change in behavior goes well beyond the consumers are now sensitive to environmental issues.
In the WPP Future Shopper study, we learn that nearly 70% of consumers want retailers and brands to adopt better environmental practices (less packaging, reduced carbon footprint and green delivery vehicles). According to the EY Consumer Index, 80% of French shoppers have environmental considerations. These expectations are well understood by retailers who believe that AI is a resource to help them control the environmental impact of their business, whether it is to limit customer returns through predictive analytics (75%) or to rationalize packaging and transportation (72%).
It should be noted that e-retailers have already adopted digital best practices such as storing data in eco-data centers (40%) and offering their customers to offset the carbon emissions resulting from their orders (39%).
Barriers to Artificial Intelligence in e-commerce
Ethical issues 33%, Cost of implementing solutions 33%, Difficulty in measuring/quantifying benefits 32%, Complexity to implement 31%, Source: OpenStudio
Data, the fuel of the e-commerce business
If data is the fuel of many activities, it is crucial for retailers who expect AI to help them update, manage and enrich customer databases (90%). AI solutions to process big data have already been deployed in 34% of retailers (in 2nd place behind competitive intelligence tools at 36%). Considering their investment intentions, they should be the first within 18 months and equip 72% of them.
Data is of strategic importance, it is thanks to it that e-retailers will be able to understand and analyze customer behaviors, make relevant recommendations to improve their sales, “recognize” the customer whether he is in a store or on the site, predict which items will be successful and thus better manage stocks…
The data will feed all phases, from customer identification to delivery, and even allow to secure payment processes by detecting fraud, a mission for which 80% of retailers believe that AI is an advantage. This fraud problem would have cost $17 billion in 2020 and is expected to exceed $25 billion in 3 years according to a study by Juniter Research.
In an increasingly competitive environment, where a user can surf to find the best deal on a site, even if it is located on the other side of the world, there is no doubt that only retailers who know how to equip themselves and take advantage of AI will be able to maintain and progress. Those who will also know how to use AI to take into account the new aspirations of consumers by aspirations by committing to the environment and and offering a more fluid, richer web2store customer experience will richer customer experience, will clearly stand out.
Brick and mortar 50%, Pure Players 25%, Market place 25%, n=135 retailers
B to B 20%, B to C 60%, B to B to C 20%, n=135 retailers
Tourism (tour operator, hotel business…) 40%, Appliances, TV, Telephony 40%, Agri-food 10%, Fashion & beauty 10%, Decoration & furnishings 10%, Leisure 10%, Cultural 10%, Financial & banking products, insurance 10%, n=135 retailers