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Ecommerce, Augmented: The Top 7 Ways Brands Can Use AI to Get Ahead in 2023

Artificial intelligence is everywhere, from car factories to the phone buzzing in your pocket. Here are the top 7 ways ecommerce brands can leverage it to grow their business

  • August 9, 2023
  • /
  • Chuck Kessler
asian woman in VR goggles against a purple background

ChatGPT was launched on November 30, 2022, by San Francisco–based OpenAI. Since that time, the popular chatbot, search engine, personal assistant or . . . . . . 

Actually, I’m not 100% sure what to call it. Evidently, neither does the internet. A quick (half a second) search reveals very little. There are a lot of search results that describe what it does, and how it works. But, there’s not a single conclusive description of what it is. There’s a good reason for that however. 

The AI ecosystem is so new and more importantly, rapidly evolving, that new use-case scenarios for ChatGPT are being added every day. 

To move forward, let’s start by calling it a large language model-based chatbot. It’s also become an occasionally troublesome search engine. Troublesome because it has the tendency to favor pleasing the user with any answer rather than saying “I don’t know.” 

ChatGPT is estimated to have reached 100 million monthly active users in January, just two months after launch. Until Threads took that crown in July 2023, that made it the fastest-growing consumer-facing app in history. 

To offer a sense of perspective, it took TikTok nine months to reach 100 million users. 

ChatGPT has also found itself at the center of a number of controversies. A recent open letter signed by hundreds of prominent AI experts, tech entrepreneurs, and scientists called for a pause on the development and testing of AI technologies so that the risks it may pose can be properly studied.

It’s a little bit like what the center of a tornado might feel like. One thing that’s true is that all of us are going to have to decide whether to get out of the way, or scale up to speed quickly. 

Artificial Intelligence Isn’t Going Away

Sun Tzu, a Chinese military general, strategist, philosopher, and writer in the sixth century BCE was credited with the phrase that later evolved into “keep your friends close, but your enemies closer.” I’m not sure that very many of us know exactly what’s going to happen with all of the incredibly quick advances that have affected artificial intelligence and machine learning. 

But, this much is true. It’s not going anywhere.

AI is here to stay.

That’s why Canopy Management’s ecommerce wizards are digging deeply into AI to capitalize on every last part of the nascent technology that can help our partners and other entrepreneurs. 

Like a lot of quickly evolving tech, there’s always a mixture of good and bad. Canopy’s team of experts are determined to mine the many aspects of AI that will ensure we keep pace with the rapid growth. We’ll discard the part that – simply through the generic nature of massive amounts of bulk data – make selling on Amazon and Walmart a mediocre, plug-and-play endeavor. 

After all, success on Amazon and Walmart is all about differentiation. 

To get back to old Sun Tzu’s quote, if AI has any potential negative implications, we need to keep it close to be able to understand the future implications. 

The rapid proliferation of AI has touched almost every industry, and the ecommerce sector is no exception. As businesses strive to meet the evolving needs and expectations of consumers, AI will almost certainly act as a technological enabler, revolutionizing the online shopping experience. 

That’s why this post is going to look at seven ways that AI has the potential to become a force for good, and improve the lives of ecommerce shoppers and sellers alike. 

1. Personalized Shopping Experiences

We’ve all become accustomed to a level of personal recognition that would be worrisome if we thought about it too much. The frighteningly targeted ad campaigns following us across multiple digital platforms, as well as our intelligent home speaker anticipating our demands are both undeniably helpful. 

The success of an ecommerce business largely hinges on how tailored and personalized the shopping experience is for the customer. AI algorithms analyze user behaviors, purchase histories, and browsing patterns to predict products that the customer might be interested in. By doing this, businesses can suggest items in real-time. 

It’s like having a personal shopping assistant. For instance, if a user often buys athletic gear, the ecommerce platform can suggest related products like sports shoes, fitness trackers, or adventure-based vacations.

2. Improved Search Functionalities

Google, Safari, Firefox and other traditional search engines rely heavily on exact keyword matches. AI takes that process one step further. Shoppers (and online sellers) taking advantage of AI to explore ecommerce platforms can now understand user intent much better. 

Using Natural Language Processing (NLP), internet searches have become more semantic. If a user types, “blue running shoes for marathons,” the AI can interpret the intent behind the search, filtering results more effectively. Some platforms are also integrating visual search, allowing users to upload an image to find similar products.

3. Enhanced Customer Service with Chatbots

Open AI and ChatGPT are leading the charge, but AI-powered chatbots have emerged as the front of modern ecommerce customer service. Available 24/7, these AI chatbots can handle an endless, human-mind numbing number of customer queries from tracking orders to answering product-related questions. 

By leveraging machine learning, AI can also learn from past interactions, thereby improving the quality and relevance of their responses over time.

4. Efficient Inventory Management

One of the decidedly unsexy components of ecommerce success, effective inventory management is a key determinant of profitability. Overstocking leads to increased holding costs, while understocking results in missed sales opportunities. Both can result in a loss of rank, and a corresponding drop in sales. 

AI algorithms can predict demand based on factors like past sales data, seasonality, and market trends, allowing businesses to maintain an optimal inventory level.

5. Dynamic Pricing

Experienced ecommerce sellers know that Amazon’s priority number one is taking care of their customers through optimum customer service and hyper competitive pricing. Dynamic pricing allows them to do that. 

Amazon’s dynamic pricing strategy uses sophisticated algorithms to update the prices of millions of products multiple times a day based on various factors such as demand, stock availability, and customer behavior.

New AI technologies have significantly improved dynamic pricing capabilities for third-party sellers in 2023, making it easier for those selling on Amazon’s platform to adopt, implement, and most importantly, compete with the massive ecommerce platform. 

Constantly repricing products on a marketplace as large as Amazon is a massive, data-intensive task. AI systems can quickly analyze vast amounts of data, including competitor prices, demand fluctuations, and customer behavior, to adjust prices in real-time. This ensures that the business remains competitive while maximizing profitability.

6. Virtual Try-Ons and Augmented Reality

With livestream selling, a host demonstrates a product in a live online video either through a social media platform, or direct video calls with groups of customers. That’s led to a surge of social commerce. 

An important component of social commerce is its willingness to combine AI, machine learning and Augmented Reality (AR) to provide a solution to one of the biggest challenges in online shopping: the inability to try products. 

Whether it’s virtually trying on a pair of sunglasses, a new lipstick shade, or visualizing how a piece of furniture looks in your living room, these AI-powered AR solutions are bridging the gap between online and offline shopping experiences.

7. Enhanced Product Discovery 

A lot of ecommerce sellers struggle to increase their average order value. Even with great conversion rates and first-page rankings, the difference between a thriving online business and one that’s just surviving has a lot to do with the ability to increase average order value (AOV). 

Amazon sellers use strategies such as “product bundles,” and cross selling to increase their AOV. Because ecommerce platforms often have a vast array of products, product discovery is a challenge. 

AI-driven recommendation engines can curate product lists based on individual preferences, making it easier for customers to discover new products. These recommendations can be based on a mix of collaborative and content-based filtering, ensuring relevance.

You Don’t Have to Be an AI Whiz to Win Big

Not everyone has the time or the interest to get fully up to speed on all the changes happening in the AI landscape. But since artificial intelligence is going to continue to be a huge part of the future, it’s important to not just stay informed, but actually use what you learn.

If all of this seems too daunting, you should consider working with someone who stays on the cutting edge of the AI revolution – better still, someone who actually uses AI to amplify your business. The ecommerce landscape is ripe for AI-driven transformation, and Canopy’s experts are working at the front lines. To talk to our team about how you can best use AI to grow your brand online, click here.

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