Businesses that leverage AI stand to gain a competitive advantage. Small business owners feel that they need to get in the game, but they may need some guidance on how they can use AI in their day-to-day operations.
You want to offer hyper-personalised experiences. You want to use AI to make data-driven decisions. You want to be able to predict customer behaviour. You’re just not sure how other businesses are using AI to do these things and whether it’s feasible for you.
Let’s look at how businesses are utilising AI.
AI-Powered Personalisation in Marketing
Brands are using AI to create highly personalised marketing experiences. This level of personalisation boosts customer engagement and conversion rates.
According to HubSpot’s 2024 marketing report, 94% of marketers surveyed say personalisation boosts their sales—an almost unanimous endorsement. Yet, personalisation is more than just using a customer’s name in emails. It’s about anticipating what each individual is looking for based on their behaviour and having the mechanisms in place to meet them where they’re at.
Take Netflix as an example. Its recommendation engine is driven by AI. It suggests content tailored specifically to each user based on their viewing habits. The same goes for Spotify, which creates playlists like “Discover Weekly” that feel personally curated for each user.
These personalised experiences keep customers coming back because they feel they are receiving a unique service tailored to them
For eCommerce businesses, AI can analyse purchase history and browsing behaviour to offer personalised product recommendations. The most well-known example of this is Amazon’s AI-powered recommendation system. You’ve seen this – the ‘You might also like” section. This feature uses AI to predict what users might want to purchase next. It’s a significant driver of sales through Amazon.
By integrating similar AI tools, other eCommerce stores can easily create personalised product suggestions. This predictive personalisation boosts your chances of getting a conversion since you are delivering the right message or product to the right person at the right time.
Predictive Analytics for Customer Behaviour
Predictive analytics lets brands anticipate customer behaviour and make better-informed decisions based on data patterns.
How? It’s not all that complicated. The AI factor just makes things more efficient, giving you useful insights at speed. Marketers have always looked to past data to try and make guesses about how a customer may behave. Now, predictive AI uses historical data (sometimes vast amounts) to forecast trends such as future purchasing behaviour, product demand, and customer churn. AI simply increases our capacity as marketers to process more data and thus make better predictions.
For example, Starbucks uses AI within its mobile app to collect and analyse customer data.
The app suggests new flavours or complementary items based on individual habits, enhancing the customer experience and driving loyalty. This tailored approach creates a personal connection. It makes customers feel as though they have a barista in their pocket who knows their preferences perfectly.
In this way, the app becomes a treasure trove of valuable consumer data, which Starbucks leverages to offer customers an even better product.
In eCommerce, this kind of predictive analytics can help optimise inventory management by forecasting demand. This can help ensure popular items are always in stock while reducing overstocking of more low-demand products.
The key point is that AI helps you do this with greater accuracy. Yes, you can guess you’ll need more Halloween items ready for the run-up to October, but how much? How do you avoid overbuying? AI insights can provide more confidence in these decisions based on an intelligent analysis of previous data.
Adopting AI-driven predictive analytics may sound expensive for small businesses, but cost-effective solutions like HubSpot’s predictive lead scoring allow you to prioritise leads based on their likelihood of converting.
Other AI-driven tools from companies like Salesforce and Shopify are reducing the barriers of entry for smaller eCommerce businesses.
Addressing Limitations and Ethical Concerns
One of AI’s key limitations is the potential for bias in algorithms. If AI systems are trained on biased data sets, they can reinforce those biases. This consequently leads to unfair targeting or misrepresentation.
Brands need to ensure they’re collecting diverse and accurate data to mitigate these risks.
Data privacy is another issue. Consumers are increasingly aware of the risks associated with how companies use their data. It’s crucial for businesses to be transparent and comply with regulations such as GDPR in Europe.
The balance for businesses is to use AI to offer a better product for customers without sacrificing trust. Unethical AI use will destroy consumer confidence – a death knell for your business. Misusing data or being overly invasive with personalised marketing can backfire, driving customers away instead of improving conversions.
Implementing AI for Small eCommerce Businesses Without Heavy Investment
As mentioned, affordable AI solutions are allowing small and mid-sized eCommerce businesses to take advantage of this technology.
- AI-powered chatbots (e.g., ChatGPT): You can easily integrate these into your online store. They assist customers and guide them through the buying process. This reduces the need for human intervention and collects data to refine offerings.
- Automated email marketing (e.g., Klaviyo): You can use AI to analyse customer behaviour and send personalised emails at optimal times.
- Predictive analytics tools (e.g., HubSpot): HubSpot helps small businesses forecast demand, segment audiences, and optimise marketing efforts with minimal upfront costs.
Smaller businesses can now utilise these tools within their budget. This affordability lets you offer more personalised experiences to customers without breaking the bank on a custom AI solution.
A Look to the Future for AI in Digital Marketing
In the near future, we can expect AI to drive hyper-personalised marketing experiences, with brands delivering content and products tailored to individual preferences on an even deeper level.
AI’s role in voice commerce is also set to expand. With the increasing use of voice assistants like Amazon Alexa and Google Assistant, businesses will need to optimise their content for voice search.
AI will enable more accurate and efficient voice commerce, allowing customers to search for products and make purchases using natural language.
AI will continue to enhance content creation. Many tools now let you generate blog posts, ad copy, or social media posts at the click of a few buttons. As these technologies improve, businesses will be able to scale their content marketing efforts without sacrificing quality.
We can also assume that predictive capabilities will only improve. This will allow brands to forecast not just what customers are likely to buy, but when and how they want to engage. This level of foresight will enable brands to craft more precise marketing strategies that anticipate customer needs and reduce wasted efforts on untargeted campaigns.
Utilising AI in Your Business
AI is empowering businesses to engage with customers more effectively and drive conversions. For eCommerce stores in particular, AI offers a wealth of opportunities to optimise the shopping experience and improve customer service.
And, of course, boost your sales.
If you’re looking to leverage the power of AI to enhance your digital marketing strategy, Donohue Consultancy can help. Contact us today to explore how AI can transform your eCommerce business.
