Have you heard of generative AI? For the past few months, this branch of artificial intelligence has known growing success brought on by the advent of such tools as ChatGPT, Dall-E, and Midjourney.
These tools seem to breed innovation as much as controversy and generative AI is well on its way to disrupting long-established industries.
The e-commerce sector, in particular, will experience profound changes due to this new form of artificial intelligence. In this article, we’ll touch upon the concept of generative AI and the functionalities that could help online retailers boost their sales.
What is Generative AI ?
Generative AI – also known as GenAI – is an artificial intelligence system capable of creating content from data models. This content can take many forms, including text, images, video, or any other media.
In recent months, several startups have garnered attention, sometimes for their innovative products and other times for the stratospheric amounts they have raised or because of the controversy they have stirred up. Some of these startups include:
- OpenAI, the entity behind ChatGPT and Dall-E, which raised €175 million last May
- MidJourney, creator of the eponymous tool MidJourney
- Google – bolstered by the phenomenal success of ChatGPT – which very recently created Bard
How does Generative AI actually work ?
So, how does generative AI operate in practice? How can you put it to work in your company or use it for a given project?
It all starts with a query – also known as a prompt – formulated by the user in the form of a question or command for the generative AI. The AI generator has undergone training and has been exposed to extensive amounts of data.
It then uses these data sets and its artificial neural networks to provide an original response.
Record-Breaking Mass Adoption
The massive adoption of AI is puzzling many experts around the world. ChatGPT, for example, reached the 100 million user mark in just 2 months. Comparatively, it took 9 months for TikTok to achieve similar numbers and 24 months for Instagram.
What’s clear is that the more consumers choose to embrace these tools, the more companies will offer generative AI-based services.
Where does e-commerce come in ?
We’re getting there! Generative AI models have disrupted many sectors and hold the promise of tremendous technological advances. E-commerce is, without a doubt, one of the sectors that will be closely affected by these innovations. Here are 5 examples of how generative AI could be relevant to e-commerce.
1. AI Generators for products recommendations
Among the functionalities an AI generator can provide to address the challenges of e-commerce and marketplaces, product recommendation generation turns out to be the most promising.
This type of technology makes it possible to create a personalized browsing path for each customer or prospect based on their preferences previously identified by the algorithms. Generative AI can be a differentiating asset in the context of loyalty strategies as it provides a deeper understanding of consumer habits.
Customer data is at the heart of strategic stakes for most online merchants. Unfortunately, many don’t know how to take full advantage of it or don’t have the resources to do so. AI generators, on the other hand, are capable of processing a huge amount of data in very little time. This allows them to identify product trends and showcase certain items accordingly.
That said, utilizing generative AI shouldn’t make us lose sight of legal regulations concerning the use of personal data. In the European Union – and some other regions – users give their consent to have their behavior analyzed by accepting the presence of cookies on websites. In principle, no AI-based marketplace is exempt.
2. AI-Generated product descriptions
Product descriptions are a form of text-based content designed to enhance the user experience (UX) and improve the product page’s search engine optimization (SEO), ensuring its visibility in search engine results.
When managing a very large number of items, this kind of task can quickly become tedious.
The natural language processing abilities of generative AI make it possible to produce natural language content by analyzing product data. AI generators are especially well-suited to this type of task since product descriptions always tend to follow the same structure:
- General characteristics of the product.
- Its benefits.
- Its specificities.
Thus, depending on the type of products the online retailer offers, the components of a textual product description can be essentially the same. For instance, a store that sells furniture and home decor will always include information about the dimensions of the products, which AI is fully capable of understanding through data analysis.
For example, Phrasee is a platform dedicated to product description generation for e-commerce players. It relies on generative AI to come up with original product descriptions.
3. AI Image Generators
One of the downsides of e-commerce is the inability to interact with the products physically. This means product images are crucial for triggering purchases. For online shop owners who need to process many items, taking pictures and editing images can be time-consuming and costly. Using pictures created by an AI image generator thus becomes a compelling alternative to help renew the presentation of products on a website.
Based on generative adversarial networks (GAN), product image generation uses a technology that employs pictures of existing products, which the algorithm analyzes repeatedly until it becomes capable of developing substantially similar content.
Among the tools that can be utilized to generate product images, DALL-E 2 – mentioned earlier – deserves the spotlight. This easy-to-use generative AI has already conquered the field of advertising and is now making progress in the e-commerce sector.
With that said, despite the performance of generative AI platforms dedicated to product images, this application isn’t yet suited to all types of retailers. For the sake of the brands’ credibility in the eyes of their customers, the authenticity of the images remains crucial.
4. Building close relationships with customers
Chatbots – or conversational agents – can provide real-time assistance for the users by answering generic questions. This does away with the last remaining barriers to purchase and is an effective way to improve the conversion rate of e-commerce websites.
5. Fine-tuning internal search engines
Users rely on marketplace search engines extensively. This means they expect clear, swift responses and a selection of products that match their original search intent.
Thanks to generative AI, search engines will continue to become increasingly powerful as time goes on. Retail giants such as Amazon are fully aware of the potential and seek to incorporate these improvements right into their applications. In the United States, 56% (1) of product searches begin on the American marketplace.
However, Generative AI raises many controversial issues
We can’t mention generative Artificial Intelligence without addressing a few areas of concern. As innovative as AI generators may be, it should be noted that they will not replace the cognitive abilities of human beings, at least not in the short term.
Instances of inaccurate information
Generative AIs such as ChatGPT sometimes offer erroneous information, and generative AI models are still in their learning phase. We believe generative AI can be a complementary tool to human intelligence, but it is still far from being able to replace it altogether (thankfully!). If you want high-quality content, be circumspect about the raw information these tools provide. We recommend you always double-check it thoroughly.
What about our personal data ?
When we converse with a chatbot online, we may be in a position to give out some of our personal information. This data is collected and stored by the conversational agent. That’s when it can get difficult to get it back if we no longer want it to be used or if we are worried about it being sold to third parties.
As you may have gathered, generative Artificial Intelligence is opening up a whole world of possibilities in various sectors as consumers continue to embrace it.
E-commerce is one of the areas where its hold is already tangible and where it will keep on increasing in the years to come.
These AIs can be tremendous business drivers and offer significant time savings. However, the limitations of AI systems – still in their learning phase – and their propensity to sometimes deliver inaccurate or incomplete information should not be ignored.
(1) “Every single” Amazon team is working on generative AI, The Verge, 2023