insights! #79: How AI personalizes your online store with data analysis
Joubin RahimiManaging Partner · synaigy3 min read
We are all in IT, and I actually believe that you, especially when you're dealing with machines, tend to forget that human beings are actually at the forefront.
Artificial intelligence and data analysis are transforming the way we shop online. Gone are the days when online stores were static and impersonal. Today, it's about addressing each customer individually and offering them a tailored shopping experience. But how does it succeed? With intelligent algorithms that recognize the needs of users in real-time and respond to them.
Revolution through AI and data analysis
ODOSCOPE uses AI to personalize online shops in real-time. Unlike traditional approaches, which rely on manual rules, the AI learns independently from the existing data, providing a dynamic and individual user experience. This scalable personalization allows users to not be confronted with predefined rules, but for the AI to anticipate, based on data, which products are most relevant to them. This happens without manual intervention, ensuring that every user gets a shopping experience tailored to them.
Closely related to artificial intelligence is data analysis. According to Hünermann, 'the analysis must be at the center of the shop system'. Only in this way can it be ensured that all elements users encounter are data-driven. This not only increases the conversion rate but also enhances the perfection of the customer experience. Convenience plays a central role in this. Shops that act in a data-driven manner and anticipate the needs of their users create a comfortable and engaging shopping experience, which can lead to higher customer retention and an increased customer lifetime value.
From personalization to situationalization
ODOSCOPE expands the concept of personalization with so-called situationalization. Here, not only the person is considered, but also the specific situation in which they find themselves. Data, such as the device used or the access channel (e.g., Instagram or Google), influences which products are shown to the user. This allows for an even more precise adaptation of the offering to the individual needs and situations of the users. For example, users accessing the shop with an iPhone may have different preferences than users with a Windows computer. This information is used by the AI to optimize the shopping experience.
The correct sorting of product lists
One of the central challenges in e-commerce is the sorting of product lists. In times when users surf from small screens, it is crucial that the most relevant products are immediately visible. This is where ODOSCOPE's strength is evident: by utilizing AI and data analysis, products can be sorted so that each user immediately sees the products relevant to them. This increases the likelihood that users will stay in the shop and ultimately make a purchase. The correct sorting of product lists has a tremendous impact. Often, these lists are only sorted by top sellers or even alphabetically, which makes little sense and does not inspire users. Correct sorting, however, can significantly increase the duration of visits and the likelihood of purchases.
The most important thing: the use of tracking data
Companies that have a grip on their data can use this information to calculate the relevance of products. It's not just about what is purchased, but also about user behavior in the shop – which products they view, add to the cart, or remove again. All this information should be used in the analysis to help further improve the shopping experience. It is crucial to use this data from the beginning.
Central role of data analysis
For the expansion of a successful e-commerce shop, analysis must be at the center. All elements users interact with should be data-driven. This allows for a dynamic adaptation to the needs of the users, resulting in a better customer experience. A higher conversion rate and increased customer lifetime value are the logical consequences.
Would you like to listen to the full episode?
Here you will find the podcast of the interview:
Please accept the corresponding cookies to view this embedded content.
Would you rather watch the episode? No problem!
Here you will find a recording of the interview:
Please accept functional cookies to watch this video.
Do you prefer reading?
Sonja Fuhrmann:
How does augmented reality influence the online buying process? Joubin, is the hype about augmented reality in e-commerce justified?
Joubin Rahimi:
Totally. And from my perspective, it's just starting. Maybe for clarification: AR, VR. It's often mixed in our conversations with prospects and customers.
Sonja Fuhrmann:
What's the difference?
Joubin Rahimi:
Yes, augmented is, I basically have the physical world as I see it, and I overlay something on top of it. I digitally overlay something, and VR is primarily an entirely virtual reality. Often, it's also meant to include AR, but it's actually virtual reality. Today it's about AR. So I have the real image plus a digital one that I overlay, and this will increasingly make its way into certain industries.
Sonja Fuhrmann:
How can AI create added value for the customer in the shopping experience?
Joubin Rahimi:
Really whenever I have a product or when I'm imagining something, and then I have to imagine it in a space or in the digital world. So, every time you think about how the whole thing looks? That can be clothing, a topic, but it's very often found, especially in B2C, related to furniture and pictures and decorative elements. So, how would a moss picture look here? What would a particular type of moss picture look like? Or should we use neon signage instead? Those are the thoughts we're currently having. And that's where AR immediately helps you when you say, I have the moss picture in this size and how big does it have to be? And we're not calculating that. We're not the pros, but we have a sense of what works well. And we're at the beginning. Amazon does this with some products now. If you use the smartphone over the app or also IKEA for certain items they have, so you can furnish yourself quite well.
Sonja Fuhrmann:
That was the customer perspective, absolutely understandable. How can companies benefit long-term from the use of AR?
Joubin Rahimi:
First of all, it's a cost factor.
Sonja Fuhrmann:
I can imagine.
Joubin Rahimi:
And I want to address this right away: saying Eroid is six months, a year. Nada. And if you do it right, it's a significantly longer case, something that needs to be calculated. Let me compare it to building a branch instead of renting it, and writing it off, in that case, the timeline is simply longer. And here, I can't rent it, I have to build a lot myself. I need the data. So I have the raw material for the product data, so I can visualize it. That's the first case. And the second one is, even if the software already exists, I have to combine it. Once I've combined it, the next question is: How can I interact with it again? But why should companies do it? I believe it's a help for customers to make a decision. And where would I rather buy? There, where I exactly receive this help or where I don't? And yes, we're in Germany, and people might say: "Yes, then he consults with me here and buys elsewhere." Could be. But the good ones succeed in getting them to buy from you.
Sonja Fuhrmann:
Yes, sounds like a big investment. Who would benefit from it?
Joubin Rahimi:
For those who are in a niche and facing tough competition, it's worth it to be a true first mover, and of course, for those who can scale. Hence the examples of Ikea and Amazon. It's not entirely coincidental that these companies are investing in the market.
Sonja Fuhrmann:
Yes, back to the consumer perspective: Aren't we getting lost in a world of digital deceptions?
Joubin Rahimi:
Quite so. Initially, it's a visual deception we have there. But I believe it helps and saves time because how often do you say: "Do I want to buy it or not?" And you didn't know and then went to a store to form an opinion, only to realize: "I still don't know how this sofa will look in my home." And then you spent a lot of time on it. Yes, and it's another reason not to drive to a store, but it's about making customer experiences and their shopping process as great as possible.
Sonja Fuhrmann:
How important do you think it is for businesses to keep up with the trend? And what does it mean for companies that are currently hesitant?
Joubin Rahimi:
I think I'll give a general answer to that. We are very cautious in Germany. If I'm a business owner or a decision-maker and I'm only active in the German market without a strategy to grow externally, then it might not be that critical. But if I say I want to become a market leader, I want to increase my market share, and I want to create customer experiences, which is really opportunistic nowadays, then companies should look into it.
Sonja Fuhrmann:
Good closing words. Thank you, Joubin.
Joubin Rahimi:
Thank you, Sonja. Thank you for your interest. We are very curious about your opinions and input. Please write them down below, and it's a very strong call to action because the discussion and your experiences can enrich this contribution.
Do you have questions or feedback?
Then feel free to contact us directly.
- Joubin Rahimi
Managing Partnersynaigy
Show phone numberShow mobile numberShow email address
Subscribe to the blog now and don't miss any news
✔️free ✔️weekly news ✔️expert knowledge
Please accept the corresponding cookies to view this embedded content.