JC Penny and Gymboree are the latest announcement of store closures in the United States. As e-Commerce booms and Amazon is reaping the rewards—in fact nearly 50% of all online sales last year and 5% of all retails sales—stores as falling victim to the retail apocalypse at an alarming rate. But, how are they selling so well compared to companies that have been around for eons and know their customers inside and out? Two words: Artificial intelligence.

The traditional sales process is one that everyone from baby boomers to millennials are familiar with. You walk into a retailer and within seconds a salesperson is there to greet you. You are then courted through the store and shown items based on assumptions that appeal to your age, demographic, what you’re wearing or even who you are with.

But, this customized experience is what most e-Commerce sites are failing at miserably, but Amazon is doing really well.

It’s happening under the hood

Today most websites—excluding advertisements—are static. You get to a homepage and whether you’re a trendy urban millennial or a retired grandparent living in the suburbs, you are presented products in the exact same way. If you shop online at the same retailer a month later, you have to start your shopping journey all over again. It might remember your purchase history in your account settings but that’s about it. Amazon and big global e-Commerce giants on the other hand are remembering this information through AI and using it to dominate the market.

A.I. as a salesperson

AI is playing the role of a salesperson and it is the future of online retail. Storing answers of questions that you ask, remembering sizes, favourite colours and brands are just a few of the endless ways that AI is delivering better and better experiences each time you shop. It never forgets, will learn infinitely and can deliver what you want, when you want much quicker than a human. On top of that, gen Y and gen Z shoppers prefer to talk to a smart device rather than a human. They also want to see things they care about and personalized experiences.

Using data effectively is also allowing Amazon to outprice other businesses and sometimes even manufacturers on their own products. It can sell products cheaper because it knows their shopper’s journey, can upsell effectively and are treating customers as lifelong clients—not single transactions. The problem is that Amazon is using data and AI so effectively that it is putting retailers out of business who aren’t keeping pace.

What are small and medium-size businesses to do?

For starters, some are building out their own customized software solutions that are tailored to their business. This involves hiring web developers who specialize in AI as well as data scientists who can make sense of the numbers. Even for a small site, this would be hundred-of-thousands of dollars at a minimum and very time consuming. Time and money is often not something a small company or start-up business has on their side.

But, most are turning to other software solutions that are helping businesses compete. Several software subscription solutions exist that are making it possible to harness the power of AI affordably. A data science degree is not required by the user and a web developer isn’t necessary. The software is easily installed like a browser extension and the user interface quickly walks website administrator through the process of getting set up.

The key is that these AI software solutions are enabling small and medium size businesses to sky rocket their e-Commerce sales without millions of dollars and without knowing how to make sense of big data. Store owners can give their shoppers personalized online experiences that are even better than a loyal sales person would provide.

Evolving past a “nice to have”…

We’re still early in e-commerce history and there is no sign of slowing down. According to Statista in 2019, e-commerce sales are expected to increase from $5.9 trillion industry to over $7.6 trillion. Leveraging data and utilizing AI is critical for businesses to compete in today’s online retail industry.

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