How to Improve E-commerce Sales Using AI Personalization

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When attempting to attract new customers to your e-commerce site, are you still making generalizations of your segmentation?If so, it’s time for personalization. Marketers currently improve customer experience, engagement, and sales by employing artificial intelligence (AI) personalization strategies. Keep reading to find out how they are accomplishing it.

We live in a world where people want what they want when they want it, and how they want it, so why not give it to them? Every young, single, white female doesn’t like the same music, read the same content or wear the same clothes. There is no reason for potential or current customers to receive emails, discounts or content based on what you think they want. Let AI figure it out for you.  

Background On How AI Personalization works

As customers view websites, make purchases, or click through emails, AI captures data about that activity. Machine-learning, a subset of AI, uses algorithms to learn more about each customer and those with similar habits. It then determines the right products or content to deliver the best customer experience in real-time. The customer sees personalized product recommendations, landing pages, or coupon offers, which increases the likelihood that your customers and prospects will make a purchase.

Data Collection 

Data is key to implementing artificial intelligence and personalization. Data can be collected and used dynamically, meaning as customers take action on your website, their behavior leads the algorithm to direct them towards future actions. Data can also come from the historical behaviors of your customers that is stored in your customer relationship management (CRM) system. Loyalty programs can also be a source of acquiring data. If you don’t possess enough data, you may need to supplement it with 2nd or 3rd party data. To do that, you must have enough of your customer data to know what 3rd party data best matches your target market.  

What type of data can be automatically collected?

  • Web pages viewed and how frequently
  • Price and product categories viewed and purchased
  • Day of the week, time, weather and, geolocation of web visitors
  • Browser, device, source of acquisition
  • Basic demographics (age, gender, income, etc.)

To accurately capture data about your web visitors, your web pages must contain the necessary tags or tracking. Speak with your web developer or choose website companies that assist with this. 

With increasing regulation around data collection and privacy, it is becoming more challenging to obtain and maintain customer data. You may be wondering if people will want to share their data. According to Accenture, research shows 83% of consumers are willing to share their data to create a more a personalized experience.  

How E-Commerce and Online Retail Companies Are Using AI Personalization 

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Dynamic Landing Pages– Some companies use AI to adapt their landing page based on geolocation and weather in various regions. Customers in cold weather environments will view a landing page with different merchandise than those in warm environments. Dynamic pages also adapt based on customer buying history. If a customer historically only purchased hats on an e-commerce site or recently used a search engine to look for hats, the e-commerce dynamic landing page promotes the latest hats instead of shirts.

Reorder Notification– Companies track usage and reorder patterns with AI and sends emails to customers to let them know it’s time to reorder. These actions increase the probability of repeat orders and thus more revenue. 

Responsive Search Ads– Companies use this method to tests multiple headlines or text simultaneously to determine which one has the best impact. The machine identifies patterns that enable it to know who else to show the advertisement to based on similar preferences. 

“Promotion Overload” – Machine learning algorithms determine how many times a customer has viewed a promotion without taking action. It analyzes data to predict the best time to send another promotion that will yield a response.

Ad Placement Optimization– AI determines the best platform to reach the best possible audience for a company’s brand.  

Product Recommendations – In real-time, algorithms make product recommendations on e-commerce sites based on customer history or based on what’s being clicked on while on the site. When assessing your ability to implement this type of personalization, you must consider the number of products you sell. Some vendors don’t require a minimum number of products, but other vendors say a good rule of thumb to use AI recommendations is to have at least 300 offerings.

Additional Benefit of AI

One of the many benefits of personalization with AI is its scalability. Even if you have unlimited marketing resources, imagine how long it would take to track each customer’s digital behavior and make connections between that behavior, and subsequently select the right offer at the right time. Artificial intelligence makes this feasible.

Financial Benefits Of Personalization

According to Accenture, 40% of customers purchased something more expensive than originally planned and 44% became repeat buyers after a personalized experience. Researchscape International found that around 54% of marketers have experienced a 10% increase in their sales, and 13% of them experienced a lift of more than 30%, just by implementing personalization in their process.  

How You Can Implement AI Personalization

As previously stated, machine learning algorithms create models to predict customer behavior based on historical actions and real-time activity. Marketing departments use the predictions to tailor their offerings to match customer preferences. Acquiring the data needed for the models can be time-consuming and costly. Larger companies may have the resources to obtain the data. You can usually hire data scientists to develop the models as well. 

If you are an entrepreneur or are working in a smaller company and don’t have the resources to build your personalization models, you can implement personalization strategies by using apps or software. The costs associated with these methods are typically dependent on the volume of traffic to your website and quantity of products you offer. Are you convinced that it’s time to use AI personalization methods? Researching and selecting the right app or vendor can be overwhelming. AI Business Partners is here to help.

To learn more about how you can leverage AI personalization to increase your revenue, improve customer experience and customer lifetime value, contact us at

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