4 AI Tactics to Personalize E-commerce Customer Experience

Every day, innovations compete for the attention of online shoppers, which means e-commerce leaders have endless possibilities to explore—from digital experiences and software-as-a-service to automation and AI.

But with so many options, the real challenge is finding the right strategies to make your brand stand out.

How AI enhances e-commerce CX

One of the most effective ways to give your branding a boost is by using AI to personalize customer experiences (CX).

According to a study by the Retail Industry Leaders Association and McKinsey & Company, consumers now expect personalization at every stage of the purchasing journey. Yet, only 15% of retailers are meeting this demand.

With AI, you can deliver distinct, tailored experiences across all channels. Here are four powerful ways to strengthen buyers’ connection to your brand and transform e-commerce CX.

A happy woman shopping online on her phone, exploring products and making purchases

1. Use AI-powered chatbots

A growing number of e-commerce brands use AI chatbots to support their customers in more nuanced and intuitive ways.

Just a few years ago, chatbots were considered a nice-to-have CX feature. But today, bots have become a lot smarter with AI. Natural language processing (NLP), for example, allows bots to recreate human-like conversations.

In 2022, the global chatbot market was valued at $4.7 billion, and it’s forecasted to grow to $15.5 billion by 2028, translating to a 23.3% compounded annual growth rate.

This trend is not at all surprising. AI-powered bots reduce wait times, handle repetitive tasks, and improve CX by personalizing recommendations.

Further, they can power you with 24/7 support and manage unexpected spikes and seasonal demands—a critical challenge for e-commerce businesses.

41% of customers consider chatbots an acceptable way of using AI in customer support.

Chat services are widely used by customers across all generations – whether you’re catering to Gen Zs, millennials, or older consumers

When using AI-enabled chat services, consider partnering with expert providers of managed e-commerce CX solutions to save on costs and reduce workforce efforts.

Best practices for AI chatbots

Develop a knowledge base. Equipping your bot with updated knowledge and resources will help it understand customers’ concerns better. This is key in speeding up issue resolution and increasing satisfaction.

Offer human support. No matter how intelligent your chatbot is, there may be issues that it can’t address. In such cases, give customers the option to escalate their concerns to a human agent.

Consistently train the AI model. Improve your bot’s responses over time with consistent AI training. Prioritize learning from past interactions, interpreting behavioral data, and absorbing new information.

A smiling woman at home, happily shopping online using her laptop

2. Offer smarter self-service

Research shows that 69% of customers try to solve their own problems before contacting support. For e-commerce leaders, this means optimizing your self-service channels.

The good news is, AI is making self-service a lot more efficient, personalized, and value-focused. This is helpful not only to customers but also to support reps.

With intelligent self-serve options readily accessible, agents are less likely to receive calls from irate, confused customers, letting them provide high-quality support where needed.

AI can power self-service resources such as:

Knowledge base. Integrate AI into your knowledge base to make information retrieval a lot easier. Machine learning (ML) and NLP help understand customers’ queries and deliver personalized interactions over time.
Portals. In a portal, customers may access support channels or find product guides and resources. AI can enhance their experience by unifying and centralizing search results, understanding the context behind queries, and analyzing past behavior.
Community forum. AI can improve user experiences by moderating discussions, personalizing suggested content, analyzing sentiment trends, and enhancing search functionality.

A happy woman shopping online in a café, using both her phone and laptop

3. Understand customer sentiments

Traditionally, understanding large amounts of data has been a pain for businesses. With AI, however, feedback and sentiment analysis are becoming more powerful and accurate, enabling e-commerce leaders to make revenue-driving decisions.

Through sophisticated analysis, for instance, you may discover that app pop-ups drive customers away. By reducing such distractions, you can increase checkouts and enhance digital CX.

This is because AI can sift through customer reviews, social media posts, and support tickets to understand buyer sentiments. AI tools collect data, use NLP to interpret them, create predictive models, and integrate insights, giving you a clearer view of customers’ emotions and pain points.

Benefits of sentiment analysis:

Reduce cart abandonment
Improve the shopping experience
Increase conversion rates
Build trust and loyalty
Enhance product offering based on feedback

4. Tailor product recommendations

Collecting and processing data about customers’ online shopping experiences is now easier than ever with AI. It helps personalize product suggestions by interpreting and predicting past behaviors and analyzing similar customer profiles.

10-15% increase in revenue and retention

3-5% boost in customer acquisition

10-30% more marketing and cost savings

5-10% higher satisfaction and engagement

For instance, AI can gather data, assess it, and craft targeted marketing campaigns. This means you can suggest products to customers based on what they’ve bought before.

What does this mean for e-commerce businesses?

Discover more ways to cross-sell and upsell. By looking for patterns in customers’ preferences and past purchases, AI helps spot opportunities to recommend complementary or higher-value items.
Help customers find what they’re looking for. AI-driven search and navigation tools ensure that customers quickly find products that match their interests and needs.
Make the shopping experience more enjoyable. Targeted recommendations create a more engaging journey, increasing retention and loyalty.

Transform your e-commerce CX with AI

With AI continuing to evolve, its potential to transform industries—including retail and e-commerce—also grows exponentially. Smarter capabilities enable brands to meet customers’ changing needs with a focus on creating more personal and meaningful interactions. Now is the time to use AI to elevate e-commerce CX and continue building a competitive edge.

Partner with SourceCX

SourceCX specializes in cutting-edge AI solutions bundled with expert, tailored CX strategies that fit your unique business needs – all offered with transparent, no-hidden-cost pricing. From AI-powered chatbots to personalized self-service, we help e-commerce brands deliver interactions that build customer loyalty.

Ready to take your e-commerce CX to the next level? Deliver smarter, faster, and more personalized experiences with SourceCX’s global teams.

FAQs

What is AI-powered CX in e-commerce?
AI-powered CX refers to using artificial intelligence tools like chatbots, sentiment analysis, and recommendation engines to improve customer experience by offering personalized, efficient service.
How do chatbots improve customer support?
AI chatbots handle common queries in real-time, reduce wait times, and offer personalized recommendations, improving both efficiency and customer satisfaction.
What are the benefits of personalized product recommendations?
Personalized recommendations lead to higher sales, increased customer satisfaction, and better customer retention by offering products that align with each shopper’s preferences.
Why is sentiment analysis important in e-commerce?
Sentiment analysis helps businesses understand customer emotions and preferences by analyzing reviews, social media posts, and support tickets. This allows for better decision-making and improved CX.
How can AI help with self-service in e-commerce?
AI enhances self-service options like knowledge bases and portals by making them more efficient, personalized, and easy to navigate, allowing customers to resolve issues without contacting support.