Optimizing conversion rates can be extremely challenging, especially when you’re manually analyzing and extracting insights from data. Fortunately, recent developments in machine learning and AI have brought a new era of possibilities.
AI can evaluate large amounts of data, identify patterns, and make informed predictions about customer preferences and experiences. It can also uncover incredible insights that ensure increased conversion.
How can AI recommendations help e-commerce businesses improve their conversion rates? Read on to learn more:
Conversion rate in e-commerce
Conversion rate is one of the most valuable metrics for measuring the return on investment of your e-commerce online store or site. It involves the percentage of website visitors who make online purchases from your website.
So, what is a good conversion rate for your e-commerce website? The average conversion rate across e-commerce sectors is 2 to 3 percent. However, one thing to note is that this rate can change between devices.
Research shows that desktops can convert twice as many users (3 percent) as mobile phones (1.6 percent), even though most traffic comes from smartphones. Thus, one can conclude that even though individuals use their smartphones to research and browse, a significant percentage use their desktops to make purchases.
Ultimately, the goal of any e-commerce business is to ensure increased conversion rates by targeting both desktop and mobile device users. But how can this business increase their conversations? One of the best ways to do this is by fully maximizing the potential of AI.
7 ways AI recommendations can improve e-commerce conversion rates
As stated above, leveraging AI recommendations can improve the conversion rates of your e-commerce store. But how can you do this? Below are some expert tips on how you can use AI to improve ecommerce conversion rates:
1. Leveraging AI for smart, personalized product recommendations
AI works by testing two or more variables. For instance, an AI algorithm analyzes which product types can interest two website visitors with the same profile. If the AI determines that individuals of specific profiles convert more for item B rather than A, it will start recommending the item B option—improving the conversion rate in the process.
Thus, AI can help your business to improve conversion by making product recommendations based on customer profiles. This personalized product recommendation can be incredibly beneficial to your business. A study by Barilliance shows that customized product recommendations can generate over 31 percent of an e-commerce store’s revenue.
2. Ensuring AI-powered site search
Your e-commerce’s capacity to convert relies on your customers’ ability to find what they need. Most customers expect that every online store should deliver an incredible user experience. Furthermore, in these modern times of impulsive purchases, consumers desire to find products with only a button click.
Thus, the more time they take to find a product, the less interested they will be in the product—this facilitates reduced conversion. So, if your goal is to increase conversion rates, boost your site’s search with AI-powered engines.
These AI-powered engines can showcase the most relevant results to your target audience in milliseconds. They work by ensuring seamless product discoverability and search experiences that encourage customers to boost their conversion rates by making faster purchases.
3. Using AI chatbots to facilitate efficient customer support
Efficient and responsive customer support is incredibly vital in driving conversions. One incredible way to get this efficient and responsive support is by using AI-powered chatbots. AI-powered chatbots have changed how customer support takes place by offering personalized and instant support to customers.
These smart virtual assistants can do the following:
- Handle a wide range of customer questions
- Offer product information
- Guide users through the buying process
- Solve common problems
As stated above, the AI chatbots ensure you enhance your customer support abilities, which is vital in delivering exceptional experiences. Furthermore, research shows that chatbots can increase sales by up to 67 percent. Thus, leveraging them can be incredibly beneficial to your conversion rate.
AI chatbots use natural language processing (NLP) to interpret or understand user questions in a human-like manner. They evaluate the sentiment, intent, and context behind customer messages and then provide relevant responses to this inquiry.
The use of NLP ensures natural and engaging conversations, which facilitate seamless customer support.
In addition, you can integrate the chatbots with frequently asked questions (FAQ) to ensure the customer can access a wealth of information instantly. This allows chatbots to offer up-to-date and accurate responses to your customers’ inquiries.
Automatically answering customer inquiries ensures you can answer common customer inquiries across multiple customer interactions. Thus, AI-powered chatbots allow e-commerce to enjoy significant benefits.
They instantly answer many customer inquiries, saving customers wait time. This accessibility brought on by an AI-powered chatbot will enhance your customer experience, build loyalty, and enhance the chances of conversions.
4. Creating product pages and headlines
Similar to how AI can personalize product recommendations and customer searches, it can determine which product page or headline design is best for your conversion rates. This can occur through continuous A/B testing with machine learning.
In A/B testing, an AI algorithm will analyze different headlines’ text sizes and variations to determine which will yield a higher return.
One essential thing to note is that website design is critical to the success of your e-commerce site. Thus, leveraging AI-powered customization should be one of the first steps you take to ensure an improved conversion rate.
Note that AI-powered customization of product pages and headlines can facilitate personalized experience. This can help your customer connect with the right products and services.
5. Leveraging predictive analytics and forecasting
Predictive analytics and forecasting can help e-commerce businesses streamline operations in several departments, including the following;’
- Marketing
- Finance
- Sales
- Logistics
- Warehousing
- Inventory
These streamlined operations often occur because AI evaluates patterns in business data to predict events or outcomes. In short, AI ensures businesses can access intelligent insights necessary for taking proactive actions and enabling improved conversion rates.
A few ways to boost your conversion rate through predictive analytics include the following;
- Stock inventory ahead of time. AI can help you manage your inventory better by determining which products sell incredibly well and which do not.
- Obtain deep insights into your customers’ preferences and habits. This benefit of predictive analytics will ensure you deliver personalized customer experiences.
- Optimize supply chain management. This optimization can help you avoid logistics bottlenecks, reduced buffer stock, product stockout, and many more.
And don’t forget to invest in a lead generation or lead management platform to identify, qualify and manage your bigger leads. This will allow you to find more opportunities and score bigger deals, by tracking their content engagement and buyer journeys.
6. Facilitating dynamic pricing
Did you know that your pricing strategies can impact your conversion rate? Well, using traditional fixed pricing models may not always maximize the value for each customer, or ensure you effectively gain your customer’s attention.
Thus, in the technological age, the best thing you can do is leverage AI algorithms and real-time data analysis to optimize your pricing strategies. These AI algorithms will allow you to adapt your pricing strategies to the present:
- Competitive landscape
- Consumer behavior
- Market conditions
Note that when you optimize your pricing strategies, you also increase the chances of boosting your conversion rates. But how can you do this? As stated above, you can use AI algorithms to optimize your pricing strategies.
The AI algorithm can predict the demand level of a particular service or product. This prediction can enable you to adjust your prices accordingly, ensuring you are competitive and have improved conversions.
For example, when you face high demand for your products, you can increase your price to capture the willingness of buyers to pay more. On the other hand, when the demand is low, you can reduce your prices to increase purchases.
7. Using AI for customer sentiment analysis
Understanding customer sentiment is incredibly vital for the success of your e-commerce. It can help you determine areas of your business that require improvement and tailor strategies to fill any gap.
An AI-powered sentiment analysis will allow you to obtain insights into customer attitudes, opinions, and emotions towards your brand, services, and products. Thus, by incorporating AI in sentiment analysis, you can easily respond to customer feedback, improve customer experience, and enhance your conversion rate.
But how does this sentiment analysis take place? Sentiment analysis occurs when businesses use AI algorithms to analyze social media posts, customer feedback, and customer reviews to classify sentiment as:
- Very positive
- Positive
- Neutral negative
- Very negative
This AI-powered sentiment analysis will ensure you can:
- Gain a comprehensive understanding of consumer emotions and perceptions
- Identify common trends
- Promptly address any issues and concerns
- Engage with customers proactively
- Build stronger relationships
All the above benefits of AI-powered sentiment analysis are essential in improving the conversion rates of your e-commerce business.
In conclusion
Artificial Intelligence is incredibly vital in improving an e-commerce’s conversion rates. In most cases, it ensures you can gain valuable insights that facilitate effective customer support, personalized product recommendation, pricing, site search, and conversion-centered product pages and headlines.
