4 ways to beat Amazon at its own game using artificial intelligence in eCommerce

4 ways to beat Amazon at its own game using artificial intelligence in eCommerce

The promises of what artificial intelligence will be able to do in the near future are almost inconceivable: it’ll be able to solve climate change, take over some public policing functions, and solve worldwide unemployment. However, artificial intelligence is still in its infancy: imagine a toddler who’s mastered the very basics of walking and talking, but needs help feeding himself, dressing himself, and understanding right and wrong.

Artificial intelligence may sound like something that only the big players in eCommerce can benefit from, with the cost and data collection requirements making the likes of IBM Watson out of reach for most small businesses.

Yet, Gartner predicts that by 2019, “startups will overtake Amazon, Google, IBM and Microsoft in driving the artificial intelligence economy with disruptive business solutions” (content available for Gartner clients).

Some businesses, large and small, have already made the foray into using artificial intelligence in their eCommerce stores. Below, I take a look at some of the current uses of artificial intelligence, the software powering its use, and the future of artificial intelligence in eCommerce.

1. Visual search

“It’s grey, well greyish-green, and it has two straps, one of the straps is blue and it’s quite big but not too big and, well, let me show you a picture…”. Even the most eloquent of orators can find it difficult to describe a simple item to someone else. As the old adage goes, a picture is worth a thousand words.

I, for one, have spent many an evening scouring the internet for something I’ve seen and forgotten the name of, proceeding to try thousands of combinations of words and phrases, only for the internet to tell me “nope, that product doesn’t exist”.

Here’s the solution: eCommerce platforms have developed to the point where embedded visual search capabilities allow users to upload images to find the item or similar.

If you’re no good with words, visual search can help narrow down your search results by comparing image pixels with others that are similar.

Pinterest

Pinterest is an example of visual search done extremely well. Capitalizing on its transformation from photo sharing tool to eCommerce platform, the app has embedded simple visual search capability into its pinnable images. By assuming that users are ‘pinning’ images that contain what they’d like to buy, Pinterest allows users to click the magnifying glass on the top right-hand corner of each image, which takes them to a resizable crop-box, allowing users to select whichever item in the image they want to search for. This will then return links and pictures of the item and/or similar items.

Users can further filter the search results by topic or tag to refine the search. Pinterest Lens also allows users to use their devices’ cameras to search for similar items. Pinterest’s Lens functionality has even been built into Samsung’s new Bixby artificial intelligence assistant.

The tech behind visual search: Slyce

Slyce is a visual search and recognition tool that identifies products based on pictures taken by users, which then takes them to the relevant eCommerce product page. Slyce has partnered with brands such as Urban Outfitters, Neiman Marcus, and Tommy Hilfiger, who recently used the technology in a runway show.

Slyce created a customized ‘Runway Recognition’ app for Tommy Hilfiger with both 3D and 2D functionality. The app allows attendees to snap images of clothes live on the runway, or of event signage and advertisements, and then takes them to the relevant item page on Tommy Hilfiger’s eCommerce site.

 2. Conversational and visual commerce

We’ve talked a lot about chatbots and their uses (and limitations) in the past, but how about combining conversation and visuals? As with standard visual search, it’s easier to show someone a robot a picture of what you want than to describe it (who has time for charades, anyway?).

The tech behind blended conversational and visual commerce: Mode.ai

Mode.ai is an artificial intelligence-powered visual chatbot that functions through Facebook Messenger. Users upload pictures through the chat interface, and the bot will then search for the same item or similar items so that the user can buy the product online. The user can ‘talk’ to the bot and guide it through its search process with prompts, such as ‘no, that’s not right’ and other clarifying phrases.

Mode.ai works by trawling through millions of photographs from eCommerce retailers, and allows users to shop directly from stores.

 3. Virtual personal shopping

It’s likely that only a handful of us have ever used a human personal shopper, so what’s the appeal of a personal shopping robot? Can we trust a robot to know their MOM jeans from their mini skirts?

Generally, the higher your level of service, the more likely your customers are to stay loyal. The more you know about your customer, the more informed you are to make suggestions that align with their style, budget, and shopping habits. AI-powered personal shoppers can cut the small-talk, and take you and your customers from strangers to BFFs in no time.

Who’s using virtual personal shopping tools?

Shoptagr

Shoptagr is a ‘save it for later’ wish-list service, where users can browse over 1,300 retailers and save items they’re interested in buying. Shoptagr’s personal shopping assistant alerts users when products go on sale, are low in stock, or are back in stock.

Its predictive analytics bot analyses its customers’ behavior to learn their shopping habits, allowing the company to curate a personalized customer journey and influence users’ buying decisions. The online personal shopper, which works across devices, locates coupons for customers based on their history and advises them of the best location and time to buy an item.

Stitch Fix

Stitch Fix is another personal shopping service combined with an online subscription service. Customers receive five hand-picked items per month delivered to their door. They can keep what they like, and return the rest. Stitch Fix stylists – both human and machine – choose the best items for customers based on their recorded profile information such as budget, style, and lifestyle. Stitch Fix’s algorithms then match products to customers, and advise companies how much inventory they need to buy.

Stitch Fix’s algorithms can also:

  • Connect with customers’ Pinterest accounts to learn what styles they’re pinning to their own boards
  • Record customer decisions, such as whether to keep or return an item and the reason why, which powers item suggestions for their next subscription.

 4. Hyper-personalization

Ever felt like the websites you visit know what you want better than you do? As internet shoppers, or even just as internet users, we experience targeted ads all the livelong day, and isn’t it pretty cool that the websites we buy from are able to suggest items we may like on the basis of what we’ve bought previously? The truth is, this works: according to McKinsey, 35 percent of purchases on Amazon are made as a result of their product recommendation engine.

Software such as Nosto can retarget customers through email using data they glean from monitoring visitor mouse action, and provide personalized product recommendations across all devices.

However, retargeting customers once they’ve left your website is risky business, as even the most enthusiastic and seasoned of internet shoppers (myself included) can ignore your marketing efforts – nowadays, it’s going to take more than a lazy email addressing me by name and a product you think I’ll like to impress me.

The tech behind hyper-personalization: NeoWize

NeoWize takes personalizing the customer experience even further. Instead of relying on historical customer data which can help to focus retargeting marketing efforts, NeoWize collects real-time data while the customer browses the website.

NeoWize analyzes the customer’s shopping journey from the second they land on the website – which products they linger over, which products they scroll past and ignore, the clicks they make – in order to personalize the journey while the customer is still engaged and on-page. Extracting this real-time information increases the likelihood of conversion by presenting the customer with hyper-personalized suggestions. In short, it’s all about the here and now.

The future of artificial intelligence in eCommerce

The fact is, artificial intelligence as a whole is still highly limited. Google may now be able to conquer an ancient, complex, and highly intuitive board game, but the triumph is human. Without an ‘army of humans‘ recording millions of moves and adjusting algorithms, no machine could have beaten authentic human intuition and intent.

The same goes for artificial intelligence in eCommerce. It can recognize a keyword or pixels within a picture, but when it comes to understanding human intent or common sense, artificial intelligence falls short of the mark. It cannot, for example, cognitively understand why we make certain choices when shopping online. So, where does that leave the future of A.I. in eCommerce? We asked the experts.

Customer service

Chad Rubin, founder of Skubana, believes that the future role of artificial intelligence in eCommerce customer service will be of a much more remedial nature. He says, “eCommerce business owners need to be especially responsive when there’s a problem, to ease our customers’ concerns. Artificial intelligence could automatically diagnose an issue based on keywords in customers’ emails or chats, and send a standard “try this” response to help them troubleshoot their issues”.

Further personalization

Customers love personalization, and artificial intelligence is already making strides in enabling companies to lead consumers through a buying journey that suits them.

Mahi de Silva, co-founder and CEO of Botworx, says, “Gone will be the days of one-size-fits-all marketing; consumers will start to see highly customized marketing campaigns and incentives. These will be driven by machine learning and adapting to the real-time needs of a consumer, e.g. a weary traveler who’s missed a connecting flight and needs a last minute hotel room”.

Is your business already using artificial intelligence in your eCommerce store?

We’d love to hear about how businesses are currently using artificial intelligence to power their online stores. Let us know in the comments below about your experiences or email me at rhian@getapp.com.

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Put your best foot forward: 4 eCommerce lessons from Peony and Moss

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Eva Spitzer is the founder and designer of Peony and Moss, the three year old fashion and apparel brand specializing in uniquely designed patterned socks. Located in Seattle, Eva’s business aim is to create beautiful socks that cater for the more modern, fashion-forward person, with an emphasis on comfort, warmth, and relaxation. From thigh highs, over-the-knees, and pretty ankle socks, Eva’s handmade designs are adored by those who enjoy the ‘cosy’ side of life.eCommerce lessonsAs a designer by trade, Eva created clothes for major national brands such as Macy’s and Bon Bébé, and was working in childrenswear development before deciding to quit and focus on turning her idea for selling patterned socks into reality.

Being a woman in business isn’t easy, but Eva has managed to expand her solo business from selling at trade shows into a successful eCommerce store. I talked with Eva about her business journey, the eCommerce lessons she’s learned, and the challenges she’s faced along the way.

The challenge: Product recognition and lack of online business experience

On taking the plunge into starting her own business, Eva said, “I had no idea how to start my own company. I just jumped in and started swimming”. With no prior experience in setting up a business, getting her brand recognised, or selling her products, she used other business models as a starting block.

Having read that another company had successfully started their business with just six necktie designs, she decided to try the same tactic. She’d also read that another pitched to 100 stores via email: she did the same, but received zero replies.

Eventually, Eva began to take things into her own hands, and called a small boutique near her home. Despite not having the capacity to meet with her, they did give her the inspiration to attend a trade show as a seller. After selling her first five orders at her first show, she knew that her designs could sell, but she left the show with a profit of just $100.

Despite making headway at trade shows, Eva knew that in terms of long-term profitability it wasn’t a sustainable business model, and not the best way to build brand recognition due to their one-off nature. Using her cornerstone – her passion for design – and her desire to learn how to sell, she began the process of building her brand through an online store.

Lesson #1: Build brand awareness early

Once Eva had set up her online store, she wanted to develop its brand awareness and online presence. In early 2015 Eva began to:

  • Send more sales pitch emails
  • Expand her line into 30 designs
  • Receive and incorporate feedback from a sales rep
  • Sell to a daily deals site (which boosted her website, her brand, and traffic)
  • Answer HARO requests to build her online presence (which gives her opportunities to be featured in other media outlets).

And her hard work paid off. Later that year, Eva sold her products to major American retailer, Nordstrom, and her online sales amounted to 10 percent of her total sales.

Eva also decided to focus more on online sales and email marketing instead of trade shows. She implemented MailChimp for her email marketing needs.

“I chose MailChimp because I’d used it previously and was so impressed by its features,” says Eva. “It’s really inexpensive for a business as small as mine. MailChimp is also great for setting up a series of automated emails when people sign-up, which eliminates a lot of time I need to spend manually emailing and getting my brand out there.”

eCommerce lesson: Recognize what works for your business, e.g. keep in mind your target audience, product, and the resources already available to you. Don’t be afraid to mix new marketing methods with more ‘traditional’ ways of generating brand awareness.

Lesson #2: Learn where and how you sell best

Having used Shopify in a previous job, Eva turned to the eCommerce app to help launch Peony and Moss. She uses Shopify add ons to integrate with Facebook and successfully sells on Wanelo – a marketplace where both large brands and independent sellers can sell their products. This has been helpful in expanding her customer base.eCommerce lessons

Despite the current craze for influencer marketing, Eva is yet to reap the rewards from sending bloggers and influencers socks to review. Nor has she seen any great return from focusing on social media platforms such as Facebook or Twitter. However, Eva found that when customers tag the shop on Instagram, and when she reposts pictures from her clients, traffic to the online store improves.

eCommerce lessons

eCommerce lesson: Don’t restrict yourself to an eCommerce store. Assuming a presence on multiple platforms can increase brand awareness and drive traffic to your store.

Lesson #3: Never stop learning

Eva’s come up against a lot of challenges while running the business on her own, and learned many eCommerce lessons along the way. Knowing that the business begins and ends with her, she’s quickly understood that she can’t be complacent about learning new trends or knowing how to efficiently market her business. Here are some key areas that Eva had to educate herself on while getting her business off the ground:

Search engine optimization (SEO)

On the process of optimizing her site for SEO, Eva says, “I definitely did not have any understanding of SEO before I set up my eCommerce store. Now, I actually use my Etsy shop to see what searches people are using to find my socks, and I then try to incorporate those terms into my listings.”

Content marketing

Eva is passionate about being able to connect with her customers. “It’s a new skill for me, learning how to connect with people on a human level,” she says. “I wrote an article about decluttering which really resonated with people, and the response gave me the confidence I needed to continue teaching myself about how best to communicate, and the importance of content marketing even as a really small business.”

Product variation

Recognising that people were often buying multiple pairs of the same socks, Eva added product bundling – the option for customers to buy multiple pairs with a discount – to her shop, which has grown sales further.eCommerce lessons

“I’m trying to continually learn and teach myself how to improve”, Eva says, and is currently taking a business class so she can:

  • Better understand customer needs
  • Learn how to get to know her customer base
  • Use email marketing to build customer relationships
  • Write blog content that resonates with people.

eCommerce lesson: Be prepared to put in the hours required to learn different skillsets and vary your offerings to ensure your business can thrive.

Lesson #4: Time really is money

Maintaining her business at its optimum level has been a big challenge for Eva. She quickly learned that, often, relying on other people can disrupt business, and that, due to the nature of her product, the sales cycle isn’t smooth all through the year.

Reliability

One lesson Eva has learned is not to rely on just one customer. “During a ‘lace trim’ sock trend, a buyer asked me to supply them in bulk for them to sell, but they didn’t actually sell them. The trend ended up dipping, and I was stuck with a huge overstock of inventory”, Eva says. “I’ve learned that getting stronger commitments from people is a must, and that there’s often a need to be firm and proactive – for example, I should have insisted they run an event, and let them know how much this setback was hurting my business.”

Sales fluctuations and cash flow

Another lesson has been in learning how to handle the nature of the sales cycle. “One of the biggest surprises for me were the sales fluctuations throughout the seasons; socks by their nature are very seasonal, but I wasn’t entirely prepared for that”, says Eva. “Now I know the sales cycle much better – stores normally buy in August in preparation for the holidays, and I know that I need to buy my fall inventory in the spring, which can present cash flow issues.”

eCommerce lesson: Secure firm commitments from potential business partners, and consider using customer management software to be fully prepared for your sales cycle.    

Peony and Moss big-wins

Despite being, for the most part, a business run by just one person, Peony and Moss has enjoyed notable achievements to date:

  • Average order size has grown from just one pair of socks to three
  • Average order value has grown threefold, from $36 to $100
  • 2016 sales grew by around 10 times compared to the previous year
  • Featured in multiple gift guides, The Seattle Times, BuzzFeed, and the Etsy newsletter.

What’s next for Peony and Moss?

Eva is more than proud of what she’s been able to accomplish so far. “I’m thrilled with how far I’ve come. The reaction I’ve had from customers to my products is great, and now I’m ready to expand the business”, says Eva.

“By continuing to teach myself, and being eager to learn the ropes with everything from email marketing, content marketing, and sales, I have been able to grow the online business at a rate that I’m really proud of”, she continues. “I think that many eCommerce stores don’t focus on their brand enough – myself included – it’s something I’m working really hard on”.

Peony and Moss is a great example of how an extensive background in sales or eCommerce isn’t necessary to succeed – a willingness to learn and a passion for what you create can foster a great basis for a growing business.

And Eva has big plans for the near future:

  • Introduction of ‘sock subscriptions’, in order to increase customer lifetime value
  • Expansion of the Peony and Moss line to include blankets, shawls, sweaters, and robes
  • Continuation of her Buy One Give One scheme, where she donates one pair of socks to someone in need with each pair sold
  • Focus on email and content marketing to increase sales and customer base.

What have been your most valuable eCommerce lessons?

Have an inspiring story to tell about your small eCommerce business success? Let us know in the comments below or email me at rhian@getapp.com.