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Technology is pushing the boundaries of commerce like never before. Artificial intelligence (AI) is one of the primary driving technologies at the forefront of the commerce evolution, using advanced algorithms to revolutionize marketing and personalize customer experiences. As of 2024, AI adoption in e-commerce is skyrocketing, with 84% of brands already using it or gearing up to do so.
This article explores the AI revolution coming to commerce, focusing on what makes AI a driving force for e-commerce in particular, and the ways it’s reshaping how businesses engage with consumers.
Understanding the AI revolution in commerce
AI is quickly reshaping commerce as we know it by democratizing access to sophisticated tools once reserved for large corporations, breaking down functional silos within organizations, and integrating data from multiple sources to achieve deeper customer understanding. It’s paving the way for a future where every brand interaction is uniquely crafted for the individual, powered by AI systems that anticipate preferences proactively.
AI is a broad term that encompasses:
- Data mining: The gathering of current and historical data on which to base predictions
- Natural language processing (NLP): The interpretation of human language by computers
- Machine learning: The use of algorithms to learn from past experiences or examples to enhance data understanding
The capabilities of AI have significantly matured into powerful tools that can improve operational efficiency and boost sales, even for smaller businesses. They have also fundamentally changed how businesses interact with customers and handle operations. As AI continues to develop, it has the potential to provide even more seamless, personalized, and ethically informed commerce experiences and establish new benchmarks for engagement and efficiency in the marketplace.
Four benefits of the AI revolution coming to commerce
Major commerce players like Amazon have benefited from AI and related technologies for a while. Through machine learning, they’ve optimized logistics, curated their product selection, and improved the user experience. As this technology quickly expands, businesses have unlimited opportunities to see the same efficiency, growth, and customer satisfaction as Amazon. Here are four primary benefits of AI adoption in commerce.
1. Data-driven decision making
AI gives businesses powerful tools to analyze large amounts of data more quickly and accurately than a person. Through advanced algorithms and machine learning, AI can sift through historical sales data, customer behavior patterns, and market trends to uncover insights and suggest actions that might not be immediately obvious to human analysts. By transforming raw data into actionable insights, AI empowers businesses to make more informed decisions, reduce risks, and capitalize on opportunities.
As a real-world example, Foxconn, the largest electronics contract manufacturer worldwide, worked with Amazon Machine Learning Solutions Lab to implement AI-enhanced business analytics for more accurate forecasting. This move improved forecasting accuracy by 8%, saved $533,000 annually, reduced labor waste, and improved customer satisfaction through data-driven decisions.
2. A better customer experience
AI is set to make customer interactions smoother, faster, and more personalized by recommending products based on preferences and behaviors, making it easier for customers to find what they need.
When consumers visit an online store, AI also provides instantaneous help via a chatbot that knows their order history and preferences. These AI-powered assistants offer real-time help like a knowledgeable store clerk. They give the appearance of higher-touch support and can answer basic questions at any hour, provide personalized product recommendations, and even troubleshoot issues. Chatbots free up human customer service agents for more complicated matters, and these agents can then use AI to obtain relevant information and suggestions for the customer during an interaction.
3. Personalized marketing
Data-driven personalization of the customer journey has been shown to generate up to eight times the ROI, as data shows 71% of consumers now expect personalized brand interactions. Until AI came around, personalization at scale was complex to achieve. Now, gathering and processing data about a customer’s shopping experience is easier than ever based on lookalike customers and past behavior.
Many businesses have adopted AI to glean deeper insights into purchase history, web browsing, and social media interactions to drive better segmentation and targeting. With AI, advertisers can analyze behavioral and demographic data to suggest products someone is likely to love. Consumers can now browse many of their favorite online stores and see product recommendations that perfectly match their tastes and needs.
AI can also offer special discounts based on purchasing habits, and send personalized emails with products and content that interest customers to make their shopping experience more engaging and relevant. This personalization helps businesses forge stronger customer relationships.
Personalization across digital storefronts
Retail media involves placing advertisements within a retailer’s website, app, or other digital platform to help brands target consumers based on their behavior and preferences within that environment. Retail media networks (RMNs) expand this capability across multiple retail platforms to create seamless advertising opportunities throughout the customer journey. Integrating AI into RMNs can improve personalization across digital storefronts with personalized, relevant ads and custom offers in real time that improve the customer experience.
4. Operational efficiency
AI can also be beneficial on the back end, enabling more efficient resource allocation, pricing optimization, efficiency, and productivity.
Customers can be frustrated when they visit a store for a specific product only to find it out of stock or unavailable in a particular size. With AI, these situations can be prevented through algorithms that forecast demand for certain items. Retailers like Amazon and Walmart both use AI to predict demand, with Walmart even tracking inventory in real time so managers can restock items as soon as they run out.
AI can automate and streamline operational tasks to help businesses run smoother, faster, and more cost-effective operations. It can:
- Offload tedious data entry, scheduling, and order processing tasks for greater fulfillment accuracy.
- Analyze historical data and market trends, predicting demand to help businesses optimize inventory, reduce waste, track online and in-store sales, and prevent shortages.
- Forecast demand levels, transit times, and shipment delays to make better predictions about logistics and supply chains.
- Improve data quality using machine learning algorithms that find and correct product information errors, duplicates, and inconsistencies.
- Adjust prices based on competitor pricing, seasonal fluctuations, and market conditions to maximize profits.
- Pinpoint bottlenecks, identify issues before they escalate, and provide improvements for suggestions.
Future trends and predictions
If you want to stay ahead in e-commerce, it’s just as important to know what’s coming as it is to understand where things are today. Here are some of the trends expected to shape the rest of 2024 and beyond.
Conversational commerce
Conversational commerce allows real-time, two-way communication through AI-based text and voice assistants, social messaging apps, and chatbots. Generative AI advancements may soon enable more seamless, personalized interactions between customers and online retailers. This technology can improve customer engagement and satisfaction while providing helpful insights into preferences and behaviors for better personalization and targeting.
Delivery optimization
AI-driven delivery optimization uses AI to predict ideal routes for each individual delivery, boosting efficiency, reducing costs, promoting sustainability, and improving customer satisfaction throughout the delivery process.
Visual search
AI-driven visual search is quickly improving in accuracy, speed, and contextual understanding. Future developments may integrate seamlessly with augmented reality (AR) so shoppers can search for products by pointing their devices at physical objects. Social media and e-commerce platforms may soon incorporate visual search more prominently, allowing users to find products directly from images.
AI content creation
AI is already automating and optimizing aspects of content production:
- Algorithms can generate product descriptions, blog posts, and social media captions personalized to specific customer segments.
- AI tools also enable the creation of high-quality visuals and videos.
- NLP advancements ensure content is compelling and grammatically correct.
- AI-driven content strategies analyze consumer behavior and refine messaging to meet changing preferences and trends.
This automation speeds up content creation while freeing resources for strategic planning and customer interaction.
IoT integration
Integrating AI with Internet of Things (IoT) devices could help make the ecosystem more interconnected in the future. AI algorithms can use data from IoT devices like smart appliances, wearables, and sensors to gather real-time insights into consumer behavior, preferences, and product usage patterns. This data enables personalized marketing strategies, predictive maintenance for products, and optimized inventory management. AI-driven IoT data analytics can also streamline supply chain operations to reduce costs and inefficiencies.
Fraud detection and security
There will likely be an increased focus on the ethical use of AI and data privacy regulations to strengthen consumer trust and transparency. AI-powered systems will get better at detecting and preventing fraud in e-commerce transactions, which will heighten security measures for both businesses and consumers.
Chart the future of commerce with Experian
AI has changed how marketers approach e-commerce in 2024. With AI-driven analytics and predictive capabilities, marketers can extract deeper insights from extensive data sets to gain a clearer understanding of consumer behavior. This enables refined segmentation, precise targeting, and real-time customization of messages and content to fit individual preferences.
Beyond insights, AI automates routine tasks like ad placement, content creation, and customer service responses, freeing marketers to concentrate on strategic planning and creativity. Through machine learning, marketers can predict trends, optimize budgets, and fine-tune strategies faster and more accurately than ever. The time to embrace AI is now.
At Experian, we’re here to help you make more data-driven decisions, deliver more relevant content, and reach the right audience at the right time. Using AI in your commerce marketing strategy with our Consumer View and Consumer Sync solutions can help you stay competitive with effective, engaging campaigns.
Contact us to learn how we can empower your commerce advertising strategy today.
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Financial Personalities > Credit Card Financial Personality Deposits financial personality – These audiences include consumers who are likely to look for bank offers based on their spending behaviors. Financial Personalities > Deposits Financial Personality Investments financial personality – Audiences to help understand a consumer’s comfort and behaviors with making financial investments. Financial Personalities > Investments Financial Personality Home equity financial personality – Audiences to help understand a consumer’s home equity circumstances and behaviors. Financial Personalities > Home Equity Financial Personality Mortgage financial personality – Audiences to help understand a consumer’s behavior and preferences with mortgages. Financial Personalities > Mortgage Financial Personality Investable assets (FLA/Fair Lending Friendly)* – Audiences that include consumers who have available investable assets in seven total tiers with Tier 1 being the highest, and Tier 7 being the lowest. Consumer Financial Insights > Investable Assets Net asset score (FLA/Fair Lending Friendly) – Predict a consumers likely net asset score ranging from less than $25,000 to over $5,000,000. Consumer Financial Insights > Net Assets Score (Net Worth) Discretionary spend – Predicts the annual discretionary spend for the category listed in the audience.Consumer Financial Insights > Discretionary Spend – Travel Consumer Financial Insights > Discretionary Spend – Jewelry Consumer Financial Insights > Discretionary Spend – Home Furnishings Consumer Financial Insights > Discretionary Spend – Entertainment Consumer Financial Insights > Discretionary Spend – Electronics Consumer Financial Insights > Discretionary Spend – Education Consumer Financial Insights > Discretionary Spend – Donations Consumer Financial Insights > Discretionary Spend – Dining Out Consumer Financial Insights > Discretionary Spend – Total Consumer Financial Insights > Discretionary Spend – Clothing/Apparel Household deposits/balances (FLA/Fair Lending Friendly) – Audiences that include households that have bank deposits balance in six total tiers with Tier 1 being the highest, and Tier 6 being the lowest. Consumer Financial Insights > Household Deposits/Balances Investment Balances (FLA/ Fair Lending Friendly) – Audiences that include consumers who have an investment balance in six total tiers with Tier 1 being the highest, and Tier 6 being the lowest. Consumer Financial Insights > Investment Balances Mortgage refinance (FLA/Fair Lending Friendly) – Predicts the likelihood the consumer is to refinance their mortgage. Consumer Financial Insights > Mortgage Refinance Footnote * “Fair Lending Friendly” indicates data fields that Experian has made available without use of certain demographic attributes that may increase the likelihood of discriminatory practices prohibited by the Fair Housing Act (“FHA”) and Equal Credit Opportunity Act (“ECOA”). These excluded attributes include, but may not be limited to, race, color, religion, national origin, sex, marital status, age, disability, handicap, family status, ancestry, sexual orientation, unfavorable military discharge, and gender. Experian’s provision of Fair Lending Friendly indicators does not constitute legal advice or otherwise assures your compliance with the FHA, ECOA, or any other applicable laws. Clients should seek legal advice with respect to your use of data in connection with lending decisions or application and compliance with applicable laws. Latest posts
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To fully take advantage of the benefits of sports advertising, here are the audience segments we recommend targeting to drive engagement and conversion. Sports fans Harnessing the enthusiasm of sports fans can drive powerful engagement and brand loyalty. Align your campaigns with major sporting events, teams, or athletes to tap into the emotional connection fans have with their favorite sports or countries. Here are 10 audience segments that you can activate to target sports fans: Likely to be a sports enthusiast: Lifestyle and Interests (Affinity) > Activities and Entertainment >MLB EnthusiastsNASCAR EnthusiastNBA EnthusiastsNFL EnthusiastsNHL Enthusiasts PGA Tour Enthusiasts Travels to see professional sports: Travel Intent > Activities > Professional Sports Event NEW! Pickleball enthusiast: Retail Shoppers: Purchase Based > Sporting Goods, Apparel > Pickleball Enthusiast NEW! Wilderness sports and camping enthusiasts: Retail Shoppers: Purchase Based > Outdoor Activities > Wilderness Sports and Camping Enthusiasts Worldview WorldView offers immediate access to essential demographic and consumer data using advanced satellite technology and machine learning. Marketers planning campaigns ahead of this summer’s games can use WorldView to understand their audience, optimize distribution, and identify untapped market areas across 90 countries. With WorldView, you can benchmark performance, visualize customer data, and create a consistent global audience strategy for digital activation. This comprehensive solution provides valuable insights for location planning, data enrichment, and targeted digital advertising, without relying on personal information, making it ideal for geo-targeted marketing approaches. Sporting events and travel beyond this summer’s games While this summer’s games are a major draw, there are still many sports fans who may prefer events that aren’t connected to the summer games during this time. You can pair our Travel Intent > Activities > Professional Sports Event audience with our Lifestyle and Interests (Affinity) > Sports and Recreation > Sports Enthusiast audience to target individuals who have expressed interest in attending sporting events or traveling for sports-related activities. We can deliver our syndicated audience segments to 30+ activation platforms, which means we have a solution however you want to consume and use our data. Sports spectators Enhancing the experience of sports spectators can create memorable moments and lasting impressions. Target individuals interested in attending sporting events, promote ticket sales, VIP experiences, and exclusive merchandise to elevate their game-day experience and foster a sense of belonging within the sports community. Here are 7 audience segments that you can activate to target sports spectators: Interested in sports: Lifestyle and Interests (Affinity) > Sports (FLA / Fair Lending Friendly)*Baseball (FLA / Fair Lending Friendly) Football (FLA / Fair Lending Friendly) Visits sports venues: Mobile Location Models > Visits >College Sport VenuesNFL Stadium VisitorsUniversity Stadium College Football Visitor MLB Stadium Visitors You can also develop targeted advertising campaigns promoting travel packages or hotel deals around Paris. Highlight proximity to this summer’s games, special experiences, or exclusive offers for travelers during this summer’s games season. By targeting specific travel preferences and behaviors, you can capture the attention of individuals planning trips around this summer’s games. When you work with Experian, you work with a single data provider that gives you access to audiences across multiple verticals and categories like travel and retail. Sporting goods shoppers You can use Experian audiences to reach consumers interested in sports and fitness ahead of the summer games. Targeting individuals in the market for sports equipment and apparel can help you reach those actively seeking sporting goods. By focusing on this segment, you can increase conversion rates and optimize ad spend by reaching an audience already inclined toward sports and fitness shopping. Here are 6 audience segments that you can activate to target consumers who are spending on sports apparel: NEW! Wears athleisure: Retail Shoppers: Purchase Based > Sporting Goods, Apparel > Athleisure Sportswear Apparel Women's activewear high spenders: Retail Shoppers: Purchase Based > Apparel > Women's Activewear / Yoga: Online High Spenders Men's activewear high spenders: Retail Shoppers: Purchase Based > Apparel > Men's Apparel (Clothing): Men's Activewear: High Spenders Athletic footwear high spenders: Retail Shoppers: Purchase Based > Apparel > Footwear (Shoes): Athletic Footwear: High Spenders Golf equipment frequent spenders: Retail Shoppers: Purchase Based > Sporting Goods, Apparel > Golf Equipment, Apparel, Entertainment Frequent Spenders Sporting goods shoppers: Mobile Location Models > Visits > Sporting Goods Shoppers Athletes For brands catering to athletes and sports enthusiasts, targeting active players is crucial. Offer products, training tips, and motivational content that inspire and empower them to excel in their chosen sports. Here are 5 audience segments that you can activate to target athletes: Likely to play sports: Lifestyle and Interests (Affinity) > Sports and RecreationPlays HockeyPlays Soccer Plays Tennis Likely to play golf: Lifestyle and Interests (Affinity) > Activities and Entertainment > Play Golf NEW! E-motion riders: Retail Shoppers: Purchase Based > Outdoor Activities > EMotion Riders E-Scooters E-Bikes E-Skateboards Influencer marketing campaigns Collaborate with influential athletes or sports personalities to create sponsored content that resonates with sports fans. You can pair our Social media heavy user audience with our Likely to be a sports enthusiast and TrueTouch conversion channel audiences to reach those who are likely to be influenced by endorsements from celebrities or athletes. Targeted advertising in sports with Experian audiences By using Experian's syndicated audiences in sports advertising, you can reach sporting goods shoppers, passionate sports fans, active players, and enthusiastic spectators. Our deep understanding of people in the offline and digital worlds provides you with a persistent linkage of personally identifiable information (PII) data and digital identifiers, ensuring you rich insights, accurate targeting across devices, improved addressability, and measurable advertising. Just as athletes strive for excellence, with the right approach, your advertising in sports initiatives will stand out as champions in the arena of consumer engagement. Can’t find the audience you’re looking for or need a custom audience? Connect with our audience team for more information. Connect with our audience team You can activate our syndicated audiences on-the-shelf of most major platforms. For a full list of Experian's syndicated audiences and activation destinations, download our syndicated audiences guide. Check out other seasonal audiences you can activate today. View now Footnote * “Fair Lending Friendly” indicates data fields that Experian has made available without use of certain demographic attributes that may increase the likelihood of discriminatory practices prohibited by the Fair Housing Act (“FHA”) and Equal Credit Opportunity Act (“ECOA”). These excluded attributes include, but may not be limited to, race, color, religion, national origin, sex, marital status, age, disability, handicap, family status, ancestry, sexual orientation, unfavorable military discharge, and gender. Experian’s provision of Fair Lending Friendly indicators does not constitute legal advice or otherwise assures your compliance with the FHA, ECOA, or any other applicable laws. Clients should seek legal advice with respect to your use of data in connection with lending decisions or application and compliance with applicable laws. Latest posts