Andy Mulcahy
Strategy and Insight Director, IMRG
Discover how AI in ecommerce may lead to new growth by transforming personalisation, conversion and digital retail in today’s market.
Ecommerce is 30 years old. It is still young, but it has come a long way in that time. For the first 10 years, it was underwhelming — done via dial-up modems, making the whole checkout process unreliable. Now, we have broadband, WiFi and myriad devices for engaging with retailers online. The subsequent 20 years have seen activity once restricted to ecommerce sites extend across a range of digital channels, apps, social networks and marketplaces.
Ecommerce faces fragile recovery
Ecommerce has, frankly, gone a bit ‘everywhere.’ Yet, for an industry that is young, dynamic and tech-enabled, it has rather stumbled recently. It continued to secure revenue growth, often double-digit, throughout the austerity period while other sectors struggled. However, it has not found the challenging economic situation of the 2020s quite so straightforward. Between April 2021 and September 2024, the ecommerce market recorded negative growth every month. We have seen a return to growth since, though the recovery feels fragile.
The macro environment is a significant
factor, no question, but ecommerce thrives
alongside the evolution of technologies.
AI is reshaping ecommerce potential
The macro environment is a significant factor, no question, but ecommerce thrives alongside the evolution of technologies. The adoption of tablets and smartphones saw a big uplift in ecommerce growth as people were able to shop in new contexts; these had a huge impact. Other fabled ‘next big things’ like voice and the metaverse, however, have made no palpable dent.
Opportunity knocks, though. Applications such as ChatGPT clearly demonstrate that software has evolved somewhat; what end-users can do has transformed. The AI technology that underpins it has enormous potential in ecommerce as it could make the ability to personalise experiences far more efficient and effective, pushing up key metrics such as conversion, frequency of purchase and items per order.
Untapped AI ecommerce potential
This technology is not in the distant future, either. AI is widely available in technology platforms and solutions that retailers use; the issue holding it back is that many only actually utilise a fraction of the available functionality. Staff numbers have dwindled during the downturn, so having the focus to get the most out of them is tough, but could the solution to ecommerce malaise be broadly ready but currently latent? Quite possibly.
