The skill of predicting consumer behavior dates back thousands of years. Throughout history, traders and merchants have utilized consistent patterns of behavior to market their goods, from the ancient silks and spices to the contemporary online sales of toasters and seasonal items.
Marketers didn’t start utilizing the findings of customer buying habits from a psychological, sociological, and behavioral economics perspective until the 1940s.
When artificial intelligence (AI) is added to the mix in the present day, retailers can leverage powerful real-time applications that leverage current consumer behavior and potentially create new trends.
Marketing teams are able to examine large consumer data sets in a matter of seconds by utilizing sophisticated AI and machine learning (ML) techniques. The findings can be used to ascertain a specific customer’s purchasing patterns, foresee their requirements, and even strategically promote a customized good or service at the precise moment of sale.
However, there are a number of unexpected advantages for consumers, including features like 3D apps and augmented reality (AR), which enable more immersive product experiences prior to purchases.
Join us as we examine how artificial intelligence (AI) is positioned to further monetize consumer behavior and the Faustian bargain whereby consumers receive accurate “You might like…” recommendations in addition to time-saving shopping benefits in exchange for providing data to nearly every company in existence.
AI & Improved Experience And Customer Service
While detractors will draw attention to a company’s capacity to manipulate consumers’ and clients’ purchasing decisions for their own gain, we must first consider the ways in which the use of AI in commerce might help consumers.
First off, with its “try before you buy” apps, AI is already improving the buying experience.
According to Veronika Ballardini, Head of Marketing at Yord, a top AR, VR, and Metaverse company, “customers can see products in their own environment before making a purchase thanks to the integration of augmented reality into mobile apps and websites.”
“This has been especially significant in the furniture, home decor, and fashion industries, where purchasing decisions are heavily influenced by a product’s fit or appearance.”
The IKEA Kreativ app, which allows you to see products in your own home, and Dulux, which allows you to experiment with different paint hues on your walls, are two examples of this type of app.
Although they are not the only ones using mixed reality technologies to enhance prepurchase experiences, the e-commerce industry is nonetheless seeing a steady stream of “See it in your home and then buy it!” rollouts.
Our AI-powered chatbots and virtual assistants at the checkout offer real-time customer care, promptly handling any concerns, inquiries, or grievances. Even while AI chatbot skills are still developing, they have practically eliminated the need to wait in line to speak with in-person shopping assistants or to communicate with customer support representatives for hours at a time.
Not to be overlooked are the AI-inspired product recommendations, which are meticulously compiled from a thousand personal data points obtained from numerous advertising firms.
Customer Behavior Boosting Profitability And Efficiency
It should come as no surprise that, despite the promised advantages for consumers, the retail and service industries are ultimately responsible for the majority of the continued investment in AI adoption.
After all, artificial intelligence can optimize each and every stage of the process, from marketing and production to point of sale and after-purchase support, thanks to customer behavior analytics.
As of right now, astute marketers use artificial intelligence (AI) to do “social listening,” scanning social media sites to locate and interact with their ideal target audience, frequently on the basis of their aggregate purchasing habits.
Similar to this, features like AI’s ability to predict customer demands ahead of demand will improve supply chain optimization and retail inventory management, which will reduce delivery times and, naturally, prices.
AI is also used by e-commerce companies in very competitive areas, like supermarkets, to optimize prices. Here, artificial intelligence (AI) systems can forecast future customer needs and track rivals’ prices in real-time to seize the most market share. They can thereby increase revenue by being fiercely competitive without requiring labor-intensive manual interventions.
Lastly, we need to consider how virtual assistants and chatbots with natural language processing (NLP) are taking the place of a relatively costly human labor force.
For the time being, putting aside the moral conundrum of substituting the conventional human labor for duties and interactions involving customers, artificial intelligence (AI) makes sense in terms of improving customer anticipation and, once installation costs are covered, boosting a business’s profitability.
The Final Word
It’s difficult to see the trend of AI’s incorporation into business ever reversing.
On the surface, using ML algorithms can help merchants take advantage of prior customer behavior and predictable character features to enhance sales. On the other hand, it can help us speed the shopping process and free up time for other activities and interests.
Of course, there will always be debates about the ethics of replacing human store workers with computerized chatbots and depriving customers of that human contact. However, AI is just faster and more accurate than humans at studying consumer behavior and making judgments in real time, and time is a vital resource for both modern consumers and enterprises.
AI will probably cause sales revenues to increase in the future of e-commerce, but the need for in-person sales workers will surely decrease. And even while this might mean the demise of conventional high street retailers, the people who are naturally anti-shopping may stand to gain the most from it.