Exploring The Future of eCommerce Retail with Generative AI

Introducing: Generative AI (GenAI). 

This emerging technology has quickly become a necessity for modern business in today’s competitive market. So let’s take a look at the future of eCommerce retail with GenAI so you can start strategizing on how to stay ahead in a saturated landscape.

Moving Beyond GenAI-Powered Chatbots 

GenAI does a good job processing vast amounts of information to generate relevant responses, thanks to its advanced algorithms and learning capabilities. This presents massive opportunities — along with its fair share of limitations. Just because it can understand and answer unknown scenarios, is an all-encompassing tool such as this the best solution and subsequent interface for users?

The most effective approach for eCommerce is to tailor the AI’s capabilities and interfaces to specific user needs or goals; in other words, the right retail way to utilize GenAI isn’t always just a simple chatbot.

For example, a customer-facing interface could involve integrating GenAI into the search bar, transforming the shopping experience by offering personalized search suggestions and responding to complex queries more intuitively.

Beyond advancement in front-end interfaces, GenAI can revolutionize backend processes as well, via: 

• Attribute enrichment. By automatically enriching attributes, GenAI acts as your brand’s behind-the-scenes quality control specialist. It can identify and fix gaps in product data, from product descriptions and pricing details to specifications, categories, and more. This automation ensures your brand capitalizes on fast-moving trends (think: those common of fast fashion), maintains a strong image that builds customer trust, and reduces zero result searches for even the most obscure queries — all at instant speed.
• AI-generated collections. GenAI can also create personalized collections at scale, tailored on a user level. This allows merchandisers to not only take the guesswork out of creating landing pages that convert, but also leave tedious updates to the AI, which optimizes rules in real-time according to clickstream data, business KPIs, and other critical signals.
• Translated and localized product content. From regional spelling (“color” and “colour”) to different interpretations of the same word (“pants” in the USA vs UK), global eCommerce retailers need to connect with customers on an individualized cultural level. GenAI-driven localization algorithms adeptly catch errors and discrepancies, helping to tailor product content to align with cultural contexts, regional preferences, and linguistic nuances.

All of these automations not only reduce manual work for merchandising teams, allowing them to dedicate more time to strategic, needle-moving initiatives, but they also enhance the accuracy and efficiency of merchandising efforts.

The Go-To for Answering Complex Needs

Ecommerce search has evolved massively since its beginnings. Once-limited keyword search engines were replaced by vector search, which was state-of-the-art for a long time due to its ability to grasp concepts. But they still couldn’t fully understand long-form nuanced queries, such as “show me fashionable and brightly colored men’s shirts.” 

Until today.

GenAI is the newest form of product discovery in about 20 years, providing a more conversational product discovery experience. This opens the floodgates to revenue-boosting possibilities for eCommerce retail websites. Instead of turning to Google for intricate queries, users can now find solutions directly on-site.

By gently introducing GenAI to eCommerce platforms via chatbots or enhanced search bars, customers will gradually become accustomed to and familiar with their interfaces. With this comes the ability for companies to capture traffic that previously would have opted for other modes of search, such as searching, browsing, or finding products via recommendation pods or quizzes.

Constructor CEO and co-founder Eli Finkelshteyn predicts that “as these solutions become more standardized, we expect to see user interfaces (UIs) for them become more standardized as well. Similar to how a shopper intuitively knows they can find a search bar on an eCommerce website, the shopper will also know where they can express their longer form needs, or have an interface where the ecommerce site asks questions to help understand their needs better.” 

He also foresees the retail industry creating more scaffolding around these solutions, to merchandize within them, help them play a role in SEO, and more.

Heightened Retail Media Success 

Alongside GenAI and AI-based personalization, Retail Media was the talk of Shoptalk 2024. 

“It makes sense why Retail Media is so important to retailers: it creates an additional, high-margin revenue stream for businesses trying to become more profitable in tougher economic climates,” Kevin Laymoun, CRO at Constructor, shared on LinkedIn post-event.

Using Retail Media, retailers can connect with shoppers more effectively and enhance their overall shopping experience. By strategically placing ads based on customer history, retailers can even guarantee ad revenue.

And now that GenAI allows brands to capture more customer loyalty and traffic, brands may have heightened success with advertising partner products. 

A Key Piece of Business Strategies 

As we stated earlier, AI has become a necessity to stay competitive. As such, the time is now for companies to be more deliberate about their GenAI strategies. 

Your overall goals should be to strive for operational excellence, unlock client experiences, safeguard privacy, and drive value for the company overall. 

And in terms of actionable steps, product discovery experts from Sephora and Constructor weighed in on exactly how digital leaders can transcend the hype to solidify their GenAI business strategies:

• Identify your legacy. What do you want your brand to be known for? Technical innovation? Customer experience? Consider how GenAI can form a piece of your legacy’s puzzle. 

• Tie GenAI into overarching business objectives. What’s your business objective? What are you hoping to achieve? Tie that into the shopper journey. For example, if your goal is to build brand loyalty, where in that journey are you losing opportunities to reconnect with that shopper and constantly be valuable to them? 

• Be clear on your hypothesis and what you’ll test. When retailers are clear on their hypothesis and what they want to test, there are various ways to integrate with GenAI, like a shopping assistant. But your north star should always be: How will this help meaningfully move our business forward? How will it impact shoppers? Start testing small to secure easy wins to always give your users a better shopping experience. 

• Start building out development teams. Build cross-functional teams with interest and scope to start investigating GenAI use cases. Assign them to research GenAI’s potential, how it can affect shoppers and your business models, vendor roadmaps, etc. Even if you’re not going to market this year, asking those questions to flesh out use cases will help with future efforts.

• Consider how to solve problems at scale. Don’t just look to solve individual use cases. With this comes rethinking your current Infrastructure and tech stack to accommodate larger use cases. GenAI is not a one-and-done initiative. 
• Decide how quickly you need to move. The pressure of how fast you have to move needs to tie into the business strategy. This brings us to an all too familiar question around new technology: should you build or buy? Long story short: We recommend you buy to move quicker. Leave the building to the experts. 

Still feeling stuck on where to begin? Glean inspiration from the bigger companies in your space. Once they start doing something, it’ll be an expectation of everyone. Right now it feels new and shiny, but once someone settles on an interface, you don’t want to be left behind. 

Understand the Past to Foresee the Future of Generative AI in Retail

GenAI is currently the missing key that’s helping countless global eCommerce retailers meet and exceed customer expectations. Of equal importance is the fact that its advent marks the beginning of many emerging technologies yet to appear in eCommerce retail. 

When these new technologies launch, there will be a lot of hype and vendors promising you the moon. One of the best ways to judge their potential merit is by understanding the past, specifically how emerging technologies have traditionally impacted the eCommerce landscape and — ultimately — companies’ bottom lines.

Discover the evolution of product discovery so you can transcend the AI hype and feel confident in making strategic, future-fit investments in eCommerce technology.

This is a guest blog post written by Constructor.io