Technology plays a critical role in consumer spending. After the coronavirus reduced in-person shopping across the world, shoppers found satisfaction in the rapidly-developing world of ecommerce through online stores, in-app shopping, social commerce, delivery services, and more.

Much of ecommerce success in 2020 lies in the creation and refinement of various automation and artificial intelligence tools. Not only have the latest technologies transformed online shopping, they have actually revolutionized everything about what retail used to be. Read more to find out about the implementation of automation and artificial intelligence in ecommerce.

What’s the difference between automation and artificial intelligence?

Programming terms such as automation and artificial intelligence are not synonymous and thinking that they are can lead to poor software investments for ecommerce brands.

Ecommerce automation

Automation refers to any platform that performs certain functions independently of a human telling it to do so. Most automation tools require an individual to set rules, conditions, and parameters and then run in the background for as long as the administrator or team desires.

Automation in ecommerce helps brands address redundant or tedious tasks efficiently so that operators can focus on other issues within the business. These tasks can (and do) exist within any function of the ecommerce process:

Artificial intelligence in ecommerce

Artificial intelligence, or AI, fuels better automation by allowing engineers to program human-like decision-making processes. AI helps platforms scale with an ecommerce brand’s growth so that it can manage various baseline and outlier shopper behavior properly.

Additionally, AI also empowers machine learning, a higher level of tech development that makes a program or automation tool aware of new circumstances and able to apply unique adjustments to AI decision-making. In other words, ecommerce is constantly upgrading AI capabilities so that they are smarter and more intuitive as a platform gathers more user data.

How are automation and artificial intelligence helping ecommerce brands?

The impact of automation and AI in ecommerce has two fronts: vendors and shoppers. For vendors, better technology improves internal processes, marketing, and sales. From the shoppers’ point of view, automation and AI offer greater personalization and a better user experience.

While automation and AI are altering the ecommerce landscape in countless ways, we’ve narrowed them down to six game-changing categories.

Omnichannel marketing in ecommerce

The omnichannel retail approach used to only belong to big brand names with deep pockets, such as Nike and Sephora. But today – thanks in large part to the economic impact of COVID-19 – small, DTC brands are able to enjoy omnichannel capabilities on a modest budget.

When it comes to omnichannel marketing, the keyword is “seamless.” Consumers don’t have to update platforms or sales agents with their preferences, purchases, and issues, because every branded platform and location talks to each other. 

Omnichannel retail is the best automation and AI example of consumer-centric technology. But the benefits still go both ways, since brands using the omnichannel approach enjoy consistency and turnkey solutions (such as real-time inventory updates) whether a consumer purchased on an app, website, social media store, or brick-and-mortar storefront.

Product description pages and consumer search

Whether in creating product descriptions or broader SEO, the ongoing struggle is for marketers and engineers to understand what users mean when they input queries in search tools. 

In some cases, consumers know what they want or need but don’t know the name. Other times, shoppers can describe a problem they’re having but aren’t sure what products and solutions are available. 

Aside from making sure that an online store’s PDPs are accurate, the next step is to anticipate consumer search activity online. This project requires data collection and analysis to improve website schema, keyword strategies, product description copywriting, tags, and eCommerce search tools. Automation and AI are helping vendors simplify this process and better serve the needs of customers.

Conversational marketing

Conversational marketing is any attempt to provide direct, one-to-one assistance to online shoppers using on-demand conversational tools, such as live chat, instant messaging, or SMS marketing.

This approach to customer support and sales rose primarily out of UX issues with chatbot services. Brands with limited resources recognized the need for 24/7 customer and sales support but lacked the funds to hire live agents. Chatbots filled the void (at least in theory) at a fraction of the cost and provided ecommerce brands a front-lines conversational support tool to keep shoppers engaged.

But chatbot technology is not the same as conversations with human beings. As such, automation and AI have begun offering hybrid solutions, empowering the human touch at every possible opportunity while supporting financial and time constraints facing most small to medium ecommerce businesses today.

The results thus far are impressive. Chatbots are able to handle incrementally more complex issues, and live agents have more margin to assist customers with specialized problems and questions.

Recent developments in two-way text message marketing are allowing brands to continue the conversation with shoppers even after they’ve left an online store. Other examples of conversational marketing include brand-consumer interactions during social media live events (in the comments), as well as influencers showcasing their favorite products and answering questions about those products online.

Not only has conversational marketing increased revenue for these brands, but it has also significantly reduced returns and abandoned carts.

Loyalty currency management

The loyalty ecosystem within ecommerce allows shoppers to enjoy new privileges and discounts in return for their repeat purchases and referrals. 

Creating and managing a loyalty currency program requires brands to recognize their repeat customers, maintain critical margins, and sort enormous amounts of data. Without automation and AI, the process would be nearly impossible.

But as technology provides more and better streamlined functionality for loyalty programs, brands will be able to increase the value of loyalty tokens and rewards. These advances will help brands nurture more vibrant customer advocacy programs and increase retention.

Payments and fulfillment

The transaction and product fulfillment process is perhaps one of the most critical components to a competitive ecommerce strategy. Payment options allow shoppers to pay easier and faster, and brands must demonstrate basic consumer security measures.

Thanks in large part to Amazon Prime, consumers also expect faster shipping. To make that happen, brands must find reliable ways to verify payments, connect orders to distribution, update inventory, maintain sustainable price points, and ship purchases as soon as possible. ecommerce solutions are helping brands of all sizes automate and streamline their fulfillment process to remain competitive with Amazon, Walmart.com, Target, etc.

Community and relationship management

In the wake of all that automation and AI offer ecommerce, brand communities and customer advocates remain the most effective means of raising brand awareness and driving conversions online. ecommerce marketers are achieving higher ROI by managing their customer and influencer relationships directly, rather than outsourcing those tasks to agencies.

“Whether you’re creating an influencer program, or a committee, or an online community forum… purpose is the bedrock of everything else… I can say with relative certainty that there will never be a world in which we don’t have more hybrid approaches to gathering people.”

– Carrie Melissa Jones on GRIN Gets Real Podcast

Proper relationship management within the context of customer advocacy requires brands to be tuned in to social listening and relevant user-generated content. Marketers must also coordinate influencer campaigns and secure the right agreements to repurpose high-performing UGC from customers, ambassadors, and influencers.

Ecommerce automation: Pros and cons

Pro: Fewer labor hours and lower long-term costs

The most obvious benefit of intelligent systems in ecommerce is the reduction in labor hours and costs that results from digitally-transformed processes. Workforces become enormously simplified thanks to sound execution of automation and AI. 

This benefit trickles down to the customer, because managers and team members have more margin to improve sales support and customer service.

Pro: Increased personalization

Automation tools can gather and assess data instantaneously. What that means for ecommerce brands is that they can better understand their customers and tailor their online store and products to their most important customer segments.

Many ecommerce platforms now come equipped with product recommendation features that align with a shopper’s search or purchase history. Apparel companies are also including intuitive tools to make cuts and sizes more accurate (thereby reducing the number of returns).

These personalization benefits also extend to ecommerce content marketing. Marketers can create more relevant content, target niche audiences, and achieve more ROI with their paid media strategies.

Con: Possible reduction in authenticity

A poorly executed automation strategy can cause ecommerce brands to lose their personal touch with shoppers. For example, the main critique of chatbots is that they are limited in their ability to provide individualized support. 

Additionally, using the wrong tools can greatly impact the customer experience and create workflow conflicts for team members.

The key to using automation and AI effectively in ecommerce is timing and maximizing customer touch points. It’s an unwise notion to view automation as replacing human efforts. Rather, smart tools should allow existing team members to dedicate more time toward a true white glove experience for customers.

Con: Intimidating learning curve

Depending on the age and tech skills of a brand’s current staff, incorporating automation and AI can create friction and anxiety. Even user-friendly tools often require a different skill set than do legacy retail systems.

That said, brands that take the time to onboard new tools and team members will eventually become proficient with those tools. Any meaningful digital transformation strategy requires patience and perseverance.

Pro: Fulfillment quality assurance

One of the greatest benefits of automation is its accuracy and consistency. Once administrators set rules and parameters correctly, managers can track product fulfillment using immutable records and don’t have to worry about human error when it comes to payments, inventory management, and shipping.

Pro & con: More ecommerce competition

Advances in ecommerce technology is good news for smaller DTC brands. Armed with the right tech stack, they can compete with major retailers within their region and around the world.

Of course, a major influx in competition also puts pressure on veteran brands to remain agile and relevant to their target audience. Consumers have more choices than ever before, and automation tools lower the barrier to entry in a fast-growing industry.

Pro & con: Systems and platform integration

On the surface, integrating multiple platforms properly can feel frustrating to retail vendors. Depending on how large an ecommerce organization is, the systems integration process takes some time and may endure some trial-and-error difficulties before everything works as it should.

However, the growing demand for technology integration is forcing SaaS providers to anticipate those integrations that are most common to ecommerce brands. That means that the leading SaaS solutions come with reliable APIs “right out of the box.” 

And once the integration process is complete, ecommerce brands can upgrade their entire business model multiple levels beyond their current state. 

What is the future of automation and AI in ecommerce?

In conclusion, no discussion on automation and AI would be complete without predicting the future of ecommerce technology.

We see three main ways in which automation and AI will continue to transform ecommerce. 

First, blockchain technology is enhancing security and anonymity for online shoppers. As this technology becomes more prevalent, brands can harness more user data without violating security protocols or consumer privacy laws.

Second, customer advocacy is rendering many advertising and marketing techniques useless. Social media is one of the most vibrant places for word-of-mouth advertising, and the leading platforms are adding new social commerce features to empower brands that look to influencers, affiliates, brand ambassadors, and influential customers to drive growth.

Third and last, ecommerce technology has the potential to increase the value of customer loyalty. As an example, take Starbucks’ rewards program. Customers can add funds to their Starbucks app and get 2 points for every dollar they spend. They can spend 50 points to get a coffee that costs $2.90. In this example, a customer’s loyalty is generally worth about 12 cents for every dollar spent.

As technology continues to streamline costs, brands will likely grow to appreciate customer loyalty to the degree that they steadily increase the value of loyalty currency. If this happens, brands will have more opportunities to gather data and empower customer advocacy programs.

It will be exciting to see how automation and AI continue to improve ecommerce over the next 10, 20, and 50 years.

Updated: January 2023