Book a Demo

Please share your email and we will get back to you shortly.

What Is Retail 4.0 And How Is E-commerce Stores Driving it to Boost Conversion?

Gokul
By
Gokul
• 
3 min
Retail 4.0


With the emergence of Industry 4.0, we’re now in the midst of a retail revolution, Retail 4.0. Ecommerce AI plays a significant role in driving Retail 4.0, offering better customer experience, with personalization at scale, and smart AI solutions.

What is Retail/eCommerce 4.0?

The term “Retail 4.0” refers to the latest digital transformation or enhancements being implemented by the leaders in enterprise retail. Is it relevant for your business? Yes. The digital technologies being used in ecommerce have very well been utilized by large retail businesses. Along the same lines, in 2021, it has been made easier and far more convenient for retailers of any size to bring consumers a better shopping experience through AI personalization.

It is due to Retail 4.0 that all small-, medium-, and large-scale retail businesses can now cater to rising customer demands without breaking the bank or upending their processes, and we have artificial intelligence in ecommerce to thank for it.

E-Commerce AI

E-commerce accounts for only 20% of all retail spending, yet ecommerce AI is one of the leading technologies driving Retail 4.0. Enterprise retailers are now using artificial intelligence to make better product recommendations by mining purchase history and other user data, and using advanced machine learning to draw insights from historical data.

Ecommerce AI is the reason behind successful retailers being able to monitor the interactions between their store and the customers, and, in the process, understanding what constitutes their purchasing journey. This includes user preferences, previous purchases, abandoned carts and wishlists, among others. But what does it achieve with all that data? What do you get by adopting the Retail 4.0 paradigm? Let’s find out.

You are Where Your Customers are

Retail has long since evolved from brick-and-mortar stores, which means brands are no longer reliant on customers walking through their doors. Brands now transcend geographic boundaries.

And that brings them this enormous opportunity — powering omnichannel retail experiences with AI. Companies are now using AI to offer the best customer service across different channels viz. call centers, social media, email, web chat, and app support. Customers can now cut the metaphorical queue because in reality, there is none.

The very same concept ensures maximally efficient omnichannel order fulfilment — AI solves the challenges you can expect from orders coming from different channels. Everything takes place in real-time to meet the increased demand from customers.

customer experience

AI-Powered Data Analytics

Data analytics is one of the leading factors for the success of online retail. When powered by artificial intelligence, it can fetch you customer profiles, analyze online sales and provide business intelligence. By extension, you can use an AI personalization engine powered by a recommendation service API for implementation post data analytics.

Smarter Product Recommendations

Leveraging a recommendation API is key to achieving ecommerce personalization. Personalized product recommendations have increased conversion rates, and with big data, ecommerce AI has already started impacting (and some might say manipulating) customer decisions both online and in-store.

Automated Supply Chain

AI can make the supply chain self-sufficient through efficient management of supply chains, especially for online businesses. It can make decisions that would normally be left to the retailers, like making delivery schedules, weighing market needs, recommending vendors, among various other redundant yet key tasks.

Smarter Solutions in Ecommerce

Technologies powered by artificial intelligence have been slowly yet consistently introducing online shoppers to newer products — things they didn’t even know they needed. This works by analyzing user purchase patterns and personal data.

Say, for the fashion industry, AI can easily make size recommendations based on user reviews of whether the size of the particular brand runs loose or tight. AI in ecommerce is also one of the main reasons why users are returning far fewer items than before.

A Level Playing Field With the Right Tech

Until a few years ago, the technology that could lend insight to provide a better customer experience was limited to conglomerates. However, 2021 brings a more level playing field by leveraging conversion rate optimization (CRO), with which brands can optimize their website experience based on user behavior to increase the chances of the visitor taking desired actions or converting on that page. Subtle aspects like the colors used on the page, offering optimized and limited choice, using urgency to drive sales, testimonials, etc. also come into play.

Intelligent Email Marketing

As a retailer, you may find yourself regularly sending marketing emails to your customers to drive engagement. Imagine improving the expected result by sending emails that suit every individual customer, instead of the “one size fits all” approach. With AI-driven smart user analysis, employing powerful and adaptive machine learning techniques, creating personalized emails that suit individual customer needs is a breeze.

Intelligent Email Marketing

As a retailer, you may find yourself regularly sending marketing emails to your customers to drive engagement. Imagine improving the expected result by sending emails that suit every individual customer, instead of the “one size fits all” approach. With AI-driven smart user analysis, employing powerful and adaptive machine learning techniques, creating personalized emails that suit individual customer needs is a breeze.

Robust Inventory Design

As many as 91% of consumers conduct online research before making a purchase at a physical store. Indirectly, this hints at the sheer real-time demand customers make and what it means for your inventory design. While certain retailers are experiencing a dip in demand, others are facing spikes in orders as customers shift channels which often leads to significant out-of-stock situations on key products. AI enhances retail search capabilities in context and even makes optimal utilization of social media's growing influencer network. With Retail 4.0, you embrace the flexibility of your platform through AI tools and IoT to manage stock and build a more granular supply chain to compete against the ecommerce giants.

Omnichannel AI Solutions

Solutions driven by omnichannel AI are responsible for delivering seamless and consistent customer experience across the physical store and other touchpoints. Through AI, brands measure how a customer journey evolves with time and it helps in developing a strategy that further improves customer engagement and retention, at all touchpoints a customer goes through before purchase.

Parting Thoughts

AI in retail and ecommerce, has diverse possibilities to offer and these are being achieved every day by numerous companies across the globe. Whether it's dialogue-oriented online commerce through chatbots or tailored email marketing, hyper personalized recommendations or inventory management — all contribute to driving a better user experience. Although still taking baby steps, ecommerce AI is all set to change the way consumers and brands imagine retail.

FAQs

What is conversion rate?

Conversion rate is defined as the percentage of visitors to your website who comes to the site with a certain goal and unlike the rest of the visitors, their goals are completed. In the context of an eCommerce store, conversion rate is the percentage of customers who come to your website as first-time visitors and then get converted into paid customers.

Why boosting conversion is the priority for eCommerce stores?

Conversion rate is one of the most important KPIs for eCommerce stores. High conversion rate indicates that your customers are satisfied with the offerings on your eCommerce store and they want to purchase from your store.

How Retail 4.0 can help in conversion?

Retail 4.0 gives a lot of focus on personalization. By applying the AI-powered personalization strategies in practice, eCommerce stores can provide tailored product recommendations to the customers and accordingly boost conversion rate.

Join 1000+ others who enjoy reading our weekly newsletter