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Global eCommerce sales are expected to total $5.545 trillion worldwide in 2022, up 16.8% over the most recently tracked period. With more demand comes more competition, and savvy retailers must successfully respond to these trends to meet the evolving needs of the consumer.
Retailers are looking to cutting edge technologies and new strategies to provide better customer experiences (CX), sell more online and differentiate themselves from the competition.
Here are three trends shaping the future of eCommerce and how you can take advantage of them as a retailer.
1. AI-assisted cross selling
For businesses, cross selling is an effective way to increase the average order value and share the breadth of a product suite, all while positively contributing to CX. However, when it’s not done effectively (ie. showing dissimilar or irrelevant products) it can be frustrating for customers and even a barrier to purchase.
AI-assisted cross selling is a powerful technology that lets you sell relevant products alongside the items a customer has already shown interest in buying. AI can analyze the relationships between the products customers click on throughout their buying journey on site, and make predictions about complimentary items to suggest.
Optimizing cross-sales is one of the most impactful strategies to sell more online, and has seen a surge in popularity over the past year in light of the impending death of the third party cookie as businesses seek ways to harness on site experience.
There are a few ways to implement AI-assisted cross selling online - one being AI Powered Bundles (the number one basket size driver for Amazon).
It’s a frictionless shopping experience for the customer, and can see a 30% to 60% increase in units per transaction for the retailer.
2. Netflixation of eCommerce
You need relevance and scale to win in eCommerce. The accepted wisdom is that for every 10% increase in product catalog you have a 12% increase in revenue.. However with endless pages of items, many won’t ever be seen - which can create a ceiling on profit.
According to McKinsey, 35% of Amazon purchases and 75% of views on Netflix come from recommended products and shows - not from people searching for them.
For this reason, many believe personalized recommendations are the future of engagement online, with Recommendations becoming so widely used that Search will be redundant.
3. Protecting customer privacy
Consumer data privacy has been a hot topic for years, and government regulation such as the EU's General Data Protection Regulation (GDPR) has caught up with the massive amounts of data being collected on users across the internet. This legislation starts to hand back control to customers over how their personal data is collected, used or sold.
Retailers are seeking ways to provide unique experiences to users based on the readily available first party data they have access to, such as item data and customer behavior onsite. Without needing to collect personally identifiable information (PI), retailers can use item data to provide more meaningful personalization.
Collaborative filtering, (AI that uses the browsing behavior of all your customers to define which items go together), computervision (AI that can identify which items are visually similar) and natural language processing (AI that mines item descriptions for common similar attributes) can be used to create a more intuitive personalization experiences, all while protecting customer privacy. By using this tech, retailers can future proof their personalization strategy and deliver vastly improved CX.
The eCommerce landscape is changing rapidly. As new legislation comes into effect, retailers must utilize the data they have access to without violating consumer privacy, and build strategies that benefit from the latest advances in machine learning and artificial intelligence. By doing so, they can optimize their sites to provide better CX and ultimately sell more online.