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How Artificial Intelligence solve the Paradox of Choice for Retail & e-Commerce?

With $1.55 trillion worldwide in 2015, the e-Commerce industry is growing fast,  and so is the presence of  Artificial Intelligence, with $5.05 billion forecasted by 2020. Both of them are really tied together. User Experience with Artificial Intelligence can solve a universal common challenge: the “Paradox of Choice”.

While shopping, consumers are confronted to a broad range of choice, which is amplified by e-shop and Marketplaces. As explained by Barry Schwartz in his book published in 2004, during the purchasing process, the abundance of product choice is translated into complexity and overload of information. There are too many options and irrelevant results to make a decision, which ends up altering the likelihood to buy.

Artificial Intelligence (AI) can be used to build a shopping assistant that will establish an initial curation, limiting the set of choices for the end users while still enabling to control the final decision. Virtual assistants will transform the nature of e-commerce, from a magnitude of diversity and long tail shopping to an effective and simple discovery process with personalized recommendations based on end user needs.

What are the benefits for both online merchants and end users?

–        It removes friction points which create impatience, overwhelming choice and a high exit rate from your home or category pages.

–        It brings long tail to life by taking advantage of filtering capabilities to recommend products that are exactly matching potential customer needs.

–        It improves efficiency, conversion rate and returning visitors rate.

It’s basically an extension of the current capabilities pioneered by Amazon, the leader in e-Commerce, who is reported to receives about 35% of its revenue through Product Recommendations. Such systems are required for the Omni channel retail space to innovate and facilitate the mobile shopping experience. Almost two thirds of people are going online before going shopping in a bricks-and-mortar store.

As an example, cosmetics industry can use the Shopping Assistant to advise e-shop users afar: it could act as an online sales associate and help users find the product that would perfectly match their needs, according to their skin type, skin condition, geolocation, weather, UV exposure, pollution and many more criterion. NextUser is currently developing a tool, using IBM Watson technology, that would revolutionize online cosmetic business. This is an amazing and exiting project that we are proud to be part, let’s keep in touch soon !

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