From the initial hype to widespread AI washing, some may think the dust is beginning to settle around AI’s role in ecommerce retail. But we believe AI’s impact on retail is only just starting to take off. With advancements in personalized shopping experiences and merchandising roles, the technology is poised to upend the way ecommerce operates — for the better.
We sat down with Constructor CEO and Co-founder Eli Finkelshteyn to discuss how the retail industry will continue to change with AI. He concludes with parting advice for ecommerce leaders trying to enact change in their organizations.
Q: What Will Be AI’s Impact on the Retail Industry?
A: AI’s impact on the retail industry is, and will continue to be, broad, but it can roughly be divided into two categories:
First, it will automate many manual and tedious tasks, like ensuring that the best and most attractive products are displayed in every context of a retailer’s digital channels, including the long tail: that is, responding well to rare queries, or finding the right places to surface rarely purchased items.
It used to be the case that humans had to do a lot of manual intervention with their search engines to ensure responses shown to shoppers looked reasonable — including correcting typos and adjusting for synonyms in product search, and removing poor or irrelevant results that might get displayed.
AI is making it so humans no longer need to do this and can instead focus on more strategic and artistic work, like ensuring that the look and feel of a retailer’s digital channels match the brand’s desired identity.
Second, AI will allow for new experiences for the shopper that were never possible before. Because doing them without today’s AI technology would have been economically prohibitive, not to mention too time-intensive to accomplish at scale.
An example of this is user-level personalization, which should feel like the digital equivalent of products on shelves being rearranged for each shopper based on what’s attractive to them.
Another example is an AI Shopping Assistant (which could be embedded in the retailer’s search bar or chat) that allows humans to tell it detailed, long-form requests like, “I’m going camping with my kids for the first time. What do I need to bring with me?” Before today’s more advanced AI, which is based on a technology called transformers (the “T” in ChatGPT), having a machine understand something like this — and provide contextual, personalized suggestions that also align to real-time inventory — was simply not consistently possible.
All of this will allow retailers to vastly improve the user experience they give their shoppers. It will bring in a new golden age of shopping where shoppers are catered to better, and they have more real options for where they can shop and what they can look forward to at every different retailer.
Q: How Can Retailers Prepare for AI's Impact?
A: To prepare for AI’s impact, retailers will need to think wisely about where AI can help their business and how. It won’t be about using AI for its own sake but instead about making smart bets on where AI can genuinely improve the user experience for their shoppers.
Retailers will need to tread carefully between two extremes: they will need to ensure they don’t use AI as a gimmick in places where it looks flashy but doesn’t actually help users, while also not being so afraid of getting AI wrong that they’re the last to use it.
Q: How Can Ecommerce Leaders Work with Colleagues to Prepare for the Transformation?
Preparing for and embracing change often requires education and training.
Ecommerce leaders can demonstrate to their colleagues how AI will streamline workflows (for example, saving retail merchandisers from menial, manual tasks and freeing them up to be more strategic and creative) and how/where it will create a better customer experience.
In many cases, AI development will even be a collaborative process with both employees and customers, as retailers survey them on preferred use cases and their comfort level.
Plus, as retailers look to drive greater AI adoption and engagement, it’s also incumbent on them to educate users — employees and shoppers alike — on the value of various AI tools.
This is not a if-you-build-it-they-will-come situation.
Ecommerce leaders need to make sure management colleagues understand that to make initiatives with AI successful, just building them won’t be enough. They really need to guide users on how to use the tools, where and when they’ll be valuable, and why they’re a better alternative than users’ current solutions.