How much value large language models in specific or even artificial intelligence in general can bring to any existing business process. In principle, one might see merit. In practice, the amount of incremental value generated will remain an open question for a while.
Online shopping already uses forms of machine learning, so the incremental addition of LLM is the issue: how much additional value is added, and at what cost?
Past studies of consumers suggest website functionality, product information, trust, convenience and personalization are top shopper concerns.
Factor | Description |
Website Usability: User-friendly interface, fast loading times, easy navigation, mobile-friendliness. | Simple checkout process, clear product information, intuitive search function. |
Product Information: Comprehensive details, high-quality images, customer reviews, size guides. | 360° product views, personalized recommendations, AR/VR try-on features. |
Trust and Security: Secure payment options, data privacy protection, clear return policies. | Two-factor authentication, verified seller badges, money-back guarantees. |
Competitive Prices: Transparency and fairness, promotions and discounts, personalized offers. | Price comparisons, dynamic pricing based on demand, loyalty programs. |
Fast & Convenient Delivery: Multiple options, accurate tracking, timely updates, hassle-free returns. | Same-day delivery, express shipping, click-and-collect points, self-service returns. |
Personalized Experience: Relevant product suggestions, targeted promotions, customer support. | AI-powered chatbots, wish list recommendations, purchase history analysis. |
And there is an argument that AI might improve each of these dimensions, as it is used to improve website experience, enhance product information, increase consumer trust, optimize prices, improve delivery times or further customize the user experience.
Factor | AI Capabilities |
Website Usability: A/B testing for optimal layouts, personalized search results, voice-activated navigation. | Increased efficiency, reduced frustration, improved conversion rates. |
Product Information: Automated content generation, personalized product recommendations, AI-powered chatbots for product inquiries. | Richer product descriptions, reduced information overload, enhanced customer engagement. |
Trust and Security: Fraud detection, anomaly analysis, risk assessment for secure transactions. | Increased customer confidence, reduced fraud, stronger brand reputation. |
Competitive Prices: Dynamic pricing based on market trends and customer behavior, personalized coupons and discounts. | More competitive offers, optimized pricing strategies, increased customer satisfaction. |
Fast & Convenient Delivery: Predictive logistics, route optimization, automated delivery notifications. | Faster deliveries, reduced shipping costs, enhanced transparency and control. |
Personalized Experience: Customer segmentation, behavioral analysis, real-time recommendations targeted marketing campaigns. | More relevant product suggestions, improved customer lifetime value, stronger brand loyalty. |
The issue is perhaps not so much whether AI can help: it should. The issue is more value versus cost; value versus other efforts to improve the business model; value versus time.
Study | Key Findings |
PWC Global Consumer Insights Survey 2023: 55% of consumers say personalized recommendations influence their purchase decisions. | Personalization is key: Customers value tailored experiences and relevant product suggestions. |
McKinsey & Company's State of Retail Banking 2023: 71% of customers expect retailers to anticipate their needs and offer relevant support. | Proactive assistance matters: Customers appreciate efficient solutions and timely interventions. |
Accenture's Why We Buy Report 2023: 75% of shoppers research products online before buying in-store. | Seamless integration is crucial: Online and offline experiences should be complementary and consistent. |
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