Leading e-commerce players are utilizing the potential of Generative Artificial Intelligence (AI) to gain deep insights into consumer expectations and preferences, enhance the shopping experience of buyers and predict demands based on past sales.

Walmart-backed Flipkart, for instance, is set to introduce a range of advanced technology integrations to elevate the shopping experience of customers.

“This involves the implementation of virtual assistants and generation of product descriptions, high-quality images, creative materials, and augmented reality visualizations, all aimed at enriching the user experience,” Mayur Datar, Chief Data Scientist at Flipkart, tells e4m.

Datar explains, “With deeper integration of Generative AI, we are reimagining product recommendations based on customers' preferences and behaviours. Flipkart has also developed chat-driven interactions for both customers and sellers, enhanced search capabilities using semantic search technology, and created internal tools to boost productivity and efficiency.”

Ajio, an online fashion and lifestyle store from Reliance Group, has introduced a dreamlike sequence that transports influencers into an AI-Verse generated by artificial intelligence.

“Within this virtual realm, influencers seamlessly transition between various outfits sourced from Ajio, before returning to their normal selves. This innovative approach to brand promotion is unparalleled,” says Rashi Agarwal, Founder, Megalodon, an AI firm that is working with Ajio to develop its generative AI capabilities.

Ajio has also appointed influencer Aiyyo Shraddha as “Chief of Small Talk” to add humour into their branding proposition. Besides, the company’s prowess in the ‘moment marketing’ game would also be on display in the festive season.

Amazon too has rolled out a new set of generative AI capabilities early this month at their premier annual seller conference-Accelerate 2023.

“The generative AI tools will simplify how sellers create more thorough and captivating product descriptions, titles, and listing details. These new capabilities will make it faster and easier for sellers to list new products as well as enrich existing listings, helping customers more confidently make purchase decisions. The new tools can recognize, summarize, translate, predict, and generate text and other content, to build more comprehensive product descriptions,” the company announced at the conference.

Top D2C brands too are enthusiastic about presenting engaging content that instantly connects with their target audience, utilizing methods ranging from computer-generated videos to AI creativity, Agarwal says.

AI-Powered Designs

Traditionally, fashion designers have relied on their intuition and creativity to envision new collections. Now, they are increasingly collaborating with AI systems to generate unique patterns, colour combinations, and even entire garment designs.

AI is also revolutionizing the supply chain, enabling fashion brands to streamline their operations and minimize waste. This data-driven approach ensures that brands produce the right amount of inventory, reducing excess stock and the need for heavy markdowns.

Demand predictions

Brands typically focus on the festive season due to the significant surge in traffic, translating into increased sales. They often overlook some critical aspects of user experience.

Shashank Rathore, Vice President, E-commerce, Interactive Avenues (the digital arm of IPG Mediabrands India), explains, “As consumers, we've all encountered out-of-stock products during festive seasons, leaving us wondering why brands miss out on potential sales opportunities. However, this time around, brands are harnessing the power of generative AI to analyze historical data and accurately predict product demand.”

These initiatives extend far beyond the festive season as AI has evolved into a long-term sustainable strategy for growth in this digital marketplace, says Shubham Srivastava- AVP, D2CPro Powered by Team Pumpkin.

He noted, “AI tools may assist in streamlining tasks like data analysis, strategic planning, trend forecasting, and improving customer buying experiences. Amazon, Google, and Shopify are already at the forefront of Gen AI and are utilizing its capability to understand and help with customer needs.”

“E-comm sales to touch Rs 90,000 Cr during fests”

A Redseer report predicts that the Gross Merchandise Value for the entire festive month of India’s eTailing in 2023 will reach approximately INR 90,000 crores, marking an impressive 18-20% growth compared to the previous year’s festive month sales. This growth is expected to be fuelled by a significant user base of around 140 million shoppers who are projected to make online transactions during this festive month.

“We expect increasing GMV contributions from non-electronics categories like Fashion, BPC, Home & General Merchandise and more this festive period,” says Mrigank Gutgutia, Partner at Redseer Strategy Consultants.

Separate budget

Expecting a great festive season, Brands are not hesitant to allocate significant resources for AI.

Rathore says, “Brands with large budgets are investing in AI by creating in-house AI research and development teams. Mid-sized e-commerce players are choosing to invest in third-party AI tools and platforms that offer ready-made solutions for personalization, recommendation systems, chatbots, and more. However, most of the ecommerce related companies are motivating current teams to learn AI by investing in training programs and educational resources for their employees to build AI knowledge and skills.”

They also allocate separate budgets for hiring data scientists, machine learning engineers, and AI experts who can develop, implement, and maintain AI solutions in future, Rathore noted.

Will AI help lift consumption?

As per Gutgutia, generative AI will lead to better and novel consumer experiences and drive stronger growth momentum. Some experts are not very hopeful though.

Rathore opines, “While AI is poised to have a notable impact on driving consumption this year, it's still just a single component in a multifaceted environment, and its effects must be evaluated within the larger framework of consumer behaviour and market dynamics. Furthermore, consumer actions during festive seasons can be shaped by a variety of factors, encompassing economic circumstances, cultural customs, and external occurrences.”

Attributing a direct influence on consumption can be challenging for brands at present, but as we move into the next year, we can anticipate more precise measurements of its impact, he added.

Moreover, consistency remains a major hurdle in AI, with many AI video tools still in their beta stages yielding unprofessional results, experts point out.