Changing the Online Shopping Journey With AI: Is it the Future or Just a Passing Trend?

Recently, ASOS made a splash in the e-commerce world by utilizing Nibble during its annual sample sale. For those unfamiliar, Nibble is an artificial intelligence chatbot that allows customers to negotiate deals on their items. Some shoppers reported receiving deals as much as 40 percent off items that were already listed on sale.

The implementation of Nibble helped ASOS quickly sell out of most of its merchandise and received overall positive customer reviews. But is negotiating your purchase with an AI bot the future of e-commerce or just a gimmick?

Think of the idea of haggling as the next iteration of suggestive selling — and things get very interesting. Imagine a chatbot plugged into your website that not only negotiates with customers but also suggests similar products they might not have considered. The e-commerce world is different from traditional retail and, oftentimes, customers don’t have a sales rep to guide them through their shopping experience. Nobody in e-commerce is doing the suggestive selling common in brick-and-mortar stores. Since the customer is already engaged via the negotiation process, having the AI also be an active participant in suggestive selling could unlock further sales for companies.

If we think about e-commerce as a continuum — from customer acquisition to product description pages (PDP), and from merchandising to pre-abandonment and post-visit engagement — implementing this technology offers a unique, engaging, novel path from PDP to cart and checkout, with the potential to influence your customer acquisition positively via word-of-mouth. After all, if someone told me I can haggle for a discount on an already marked-down item from one of my favorite brands, at the very least I’d definitely check out the website to explore further. If the bot can help with cart abandonment by encouraging purchases and engaging potential buyers, then it’s a win-win for both the brand and consumers.

All that being said, implementing AI bots, particularly for pricing, may not be the next big thing in e-commerce. An article from The Atlantic earlier this year highlighted the potential downsides of this technology, claiming we're entering an “AI Price-Fixing Dystopia.” The piece details a scandal involving RealPage, a property management software that helps landlords set the most profitable price possible. As outlined in the article, lawsuits against RealPage allege that landlords using this software have essentially agreed to price fix rentals in their area, making sure they make the most profit possible and leaving renters paying a fixed premium beyond their control. The Atlantic also referenced a recent study of German gas stations, which found that when one major player adopted a pricing algorithm, its margins didn’t budge, but when two major players adopted different pricing algorithms, the margins for both increased by 38 percent.

This isn’t to say that all AI implementation leads to negative outcomes for consumers. In fact, Nibble’s use is a very creative way to drive engagement. The key for online merchants is finding the right use cases for AI that not only benefit them but also enhance the customer experience.

For ASOS, Nibble, and other brands considering AI integration in their storefronts, putting the customer first is key. The reason it worked out so well for ASOS is because the technology gamified the shopping experience and engaged the customer. You need to make sure that the tech doesn’t create any friction for customers; in this case, it didn’t. If you implement technology just to say you have the latest tools on your storefront without considering how it will impact the customer, you risk driving them away — exactly the opposite of what you're looking to do.

There's also a very practical B2B use case for this technology. It can help potential buyers stick to their budget, adjust terms of engagement to drive sales that might otherwise be lost, and engage them in new and exciting ways.

The key when implementing any of the latest AI technologies — AI-driven haggling included — into your website is to prioritize the customer’s wants and experience. These are exciting times for merchants and consumers alike. There will be more and more options to drive engagement in your storefront, provide unique experiences and, ultimately, drive more sales. However, it’s crucial to make these changes with the consumer experience at the forefront of your offering.

Ben Marks is director of global market development at Shopware, an e-commerce platform.