How To Prep Your Shopify Store For The Holidays With The Power Of AI

The upcoming holiday season is an important time for ecommerce businesses to not just boost immediate sales but get on track for long-term growth.

The COVID-19 pandemic changed consumer behavior with many people now preferring online shopping. A survey by SYKES shows that this behavior is expected to continue, with 53.93% of respondents saying that they prefer to do their holiday shopping online and have their products shipped to them. Only 18.67% of respondents preferred online shopping with same-day, curbside pickup options despite the speed and convenience.

Deloitte estimates that holiday ecommerce sales will increase between 7% and 9% in 2021 as compared to 2020. Ron Sides, vice chairman at Deloitte LLP, said, “Across channels, retailers should expect a strong holiday season as consumer spending levels are projected to remain high.”

Salesforce predicts that the holiday ecommerce spend will be US$259 B in the United States and US$1.2 T globally.

Insider Intelligence’s US Ecommerce Forecast 2021 expects the growth in online spending to continue beyond the pandemic, reaching 23.6% of total retail sales by 2025. 

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Now that’s encouraging news for Shopify stores and other ecommerce businesses looking for more sales!

Increase holiday ecommerce sales

But how do you differentiate yourself from the many, many businesses going about their ecommerce holiday planning?

You need to build an exceptional online sales experience so that customers decide to come back for more.

AI-enabled hyper-personalization builds a unique profile of customers that learns and adapts over time based on browsing and purchasing behavior. It uses contextual customer data like user profiles, locations, purchasing history, and browsing history to deliver an optimal customer experience in real-time.

In this way, it helps you boost sales and achieve greater brand loyalty.

Ways to leverage AI for the holiday shopping season

Let’s see how you can ensure that your Shopify store is ready for the holiday season by leveraging AI and machine learning capabilities.

Implement and test a personalization solution

The top priority for ecommerce businesses is to increase conversions, especially during holiday sales. Personalization drives conversions and increases customer retention by creating unique experiences tailored to individual customers.

Customers value a good experience just as much as competitive prices, if not more. A positive customer experience increases conversion rates by 10%-15% and customer satisfaction rates by 20%.

Retail giants like Walmart and Amazon offer a seamless, customized, and frictionless shopping experience, and consumers have become used to it to a point where they expect it from small and medium businesses as well.

You can implement an AI-based personalization solution to achieve similar customization levels and test different personalization strategies to see what works for you.

There are four places where AI can customize the experience for online shoppers:

• Home page: Display top-selling and recently-viewed products across your catalog first
• Category landing pages: Display products specific to a category or a landing page, or both
• Product detail page: Alter level of detail based on customer status (new customers, loyal customers, seasonal, all-year shopper)
• Checkout: Recommend complementary products, send reminders about abandoned carts 

Machine learning-based product recommendation systems look at ecommerce data points such as purchase history or products in the cart to suggest relevant products to potential customers in real-time. 

Websites driven by machine learning algorithms can dynamically change the content displayed on the screen depending on the visitor. The algorithm uses several ecommerce data points such as behavior on the site and past purchasing behavior to generate customized content.

For instance, new visitors are shown detailed product descriptions whereas existing customers are shown products based on past purchases and browsing behavior.

You can integrate personalization solutions like Dialogue into your Shopify store to create a tailored shopping experience at all customer touchpoints. Visitors get AI-powered personalized product recommendations and tailored marketing messages based on their interests and preferences.

Update your merchandising strategy with AI

AI-assisted merchandising helps ecommerce merchants deliver differentiated value propositions. Ecommerce platforms can make the best of holiday ecommerce sales by ensuring the right merchandise mix and aligning the supply chain to prevent overstocking or out-of-stock situations.

AI-based merchandising tools perform these tasks automatically, predictively, and in real-time. Highly predictable events like vendor inquiries, order management, and item setup, and repetitive processes that don’t need much human judgment can be automated to save time, reduce errors, and lower costs.

Some AI-assisted merchandising tactics include:

Catalog management

Product data is extracted using image recognition and NLP is used to attribute products in detail. Assortment data is combined with user behavior insights to generate forecasts and determine demand signals to plan your catalog strategy.

Visual merchandising

Visual merchandising is needed on the home page and all product pages to catch the customer’s attention as quickly as possible and keep them interested.

Apart from taking high-quality photos and using minimum text, ecommerce businesses often link websites to their social media accounts. This helps improve search rankings, showcase social proof, and enable customers to become aware of brand values.

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Pura Vida included several elements on this product page for effective visual merchandising:

• High-quality product photo
• Detailed product description
• User-generated content: customer Instagram photos
• An engaging mobile shopping experience due to the clean design

Social commerce can also help create a more personalized and targeted in-app shopping experience.

Merchants can use actionable ecommerce data insights from advanced analytics to automatically hyper-localize and hyper-personalize their merchandise selections.

Mobile experience optimization

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Mobile ecommerce is a fast-growing channel due to the increase in smartphone users and associated app ecosystems. By 2025, more than 10% of all retail sales in the United States are expected to be generated via mobile ecommerce.

Machine learning and AI have the following applications in mobile ecommerce:

Search and navigation

AI-powered mobile ecommerce search solutions provide relevant and detailed product result listings for users' search queries.

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Machine-learning-based solutions can enable natural language search that adapts and learns based on search queries, delivering accurate results for vague queries or queries with typos.

Conversational AI

AI-driven chatbots like BotCommerce that can integrate with Shopify and Magento help facilitate purchases on smartphones by interpreting the context of the discussion to provide action-driving answers.

Visual data processing 

Image processing AI can help with image recognition. For instance, when users upload the image of an outfit, machine learning algorithms match the image to similar products available at the online store.

Know the preferences of your holiday shoppers

Collecting ecommerce data about consumer shopping habits and analyzing them will help you determine buying patterns that reveal your customer base values.

AI can enhance consumer insight aggregation methods like social listening and focus groups.

Social listening

Social media platforms offer clues on the changing preferences of the target audience and upcoming trends. AI-based tools help understand shoppers’ preferences in real-time by sorting through data, pinpointing trends, and mining actionable insights.

These insights are used to create a personalized and targeted marketing strategy. Thus, online retailers can improve customer understanding and customer lifetime value.

Focus groups

Approaches like focus groups, in-product messaging, and surveys are used to create a deeper connection with customers and understand their needs.

AI platforms can conduct live online focus groups to collect customer data in real-time, which is then analyzed to understand the customer journey better.

Fine-tune the internal search engine to rank relevant products higher

Online stores attempt to promote the best-selling products to more customers. Having the right products to rank in the internal search is important as you want to promote products with better profit margins or better discounts to improve conversion rates. 

The various ranking signals may include user behavior score, popularity score, and freshness. These scores in combination with relevancy scores are used to rank products for a search query. The scores are based on signals like catalog data, seasonality, user demographic data, and clickstream data.

AI and machine learning automate the process of controlling and optimizing how the internal search engine ranks relevant products.

Automate re-engagement

Marketing efforts should target the holiday calendar. Many online retailers have extended the shopping holidays into a Cyber Week, which includes:

• Thanksgiving (Thursday)
• Black Friday
• Small Business Saturday
• Sunday
• Cyber Monday

You should plan ahead and send automated email campaigns to nurture your leads and improve online sales.

Example:

Doc Martens sent a Cyber Monday email with a countdown to create extra urgency. It pushes consumers to act quickly if they want to get the deal and consequently, boosts conversions. 

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Re-engagement is an important marketing strategy that prioritizes ad spending on customers who have been identified as more likely to convert based on previous interactions. Thus, using ad spend to re-engage customers can generate a greater ROI compared to other digital channels. 

Typically, re-engagement campaigns attempt to recover abandoned carts, promote ongoing sales or holiday sales, push related products, or launch new product ranges by offering special promotions. AI can create and deploy these campaigns, and these work best as part of a wider digital strategy that includes email, social media, in-app pop-ups, etc.

Customer re-engagement is much easier and more effective if you regularly collect contact information. 

You can collect customer information by:

• Creating a customer database
• Setting up a brand loyalty program
• Collecting contact information at checkout 

Customers who have bought from your Shopify store in the past are easier to re-engage and convert again. 

AI-based re-engagement tools can be used to deploy the following tactics:

• Sending targeted emails and text marketing campaigns based on the marketing calendar
• Digital retargeting wherein you tag and categorize people who visit your website and display ads using Google display and paid ads
• Run enticing holiday promotions wherein you offer a free gift, host a giveaway, etc.

Incorporate an AI-powered chatbot to reinforce customer support

Chatbots have moved on from being IT helpdesk assistants to being agents of “conversational commerce.” They operate round-the-clock to instantly resolve customer issues and deliver a personalized shopping experience.

Chatbots typically have the following functions:

• Offer product recommendations
• Complete online purchases
• Provide customer support
  
  

Chatbots use Natural Language Processing (NLP) and Natural Language Understanding (NLU) to interpret customer intent and provide real-time assistance.

Advanced chatbots are even capable of handling extensive troubleshooting and noisy conversations.

For instance, Sephora’s chatbot, which is available on Kik and Facebook Messenger, helps customers find products and offers recommendations, tutorials, and makeup tips. It even personalizes the user experience. It asks users to take a short quiz and offers product recommendations in top-rated categories based on the information provided.

When your Shopify store is hit by more traffic during the holiday rush, an AI-based chatbot can help you serve your customers efficiently and personally.

Wrapping up

Holiday ecommerce sales are the best opportunity for Shopify stores to recoup losses incurred during the past year. AI and ML help you automate forecasting, planning, and decision-making to give your customers the best possible experience and, in turn, boost your conversion rates.

Personalization, product recommendation, image search, price optimization, and virtual assistance are some of the ways in which you can leverage AI to make your Shopify store ready for the holiday season.

Ecommerce is a competitive space and is changing quickly due to the adoption of advanced technologies. Thus, it’s important to stay up-to-date to meet growing customer expectations and track how other merchants are reaching their customers.