Magento 2E-CommerceHow To GuideJuly 8, 2024Simon Walker

How to Utilize AI to Increase Your Magento Sales?

How to Utilize AI to Increase Your Magento Sales?

Artificial intelligence (AI) is no longer a dream or a concept straight out of sci-fi movies. It is very much a reality and the sooner we realise it, the better it is for us. Many people claim that AI will eventually replace humans in almost every job role. However, it is not the case. We firmly believe that while AI will replace a few roles, it will create a lot more. On top of it, AI should not be seen as a job killer but a valuable team member that can streamline work.

If you search for the benefits of AI, you’ll quickly realise that AI can help humans complete their work faster and more efficiently. Of course, there are downsides to AI, but let us not focus on them for today. Speaking of AI, do you know that it can be extremely beneficial in terms of boosting your online store’s sales? Yes, AI and sales go hand in hand. The only requirement is you need to know how to utilise it properly. Otherwise, you’ll be using expensive technologies with little return on investment.

Let’s get started on AI helps increase Magento sales.

Increasing Magento Sales Using AI

1. Personalised Shopping Experiences

Suppose a website provides the same experience to every user regardless of their preferences and past purchases. Do you think this Magento store is set up for success? The answer is a big no. Today, online shoppers demand and expect highly personalised experiences.

Thus, if a person who prefers buying jeans goes online, they expect to have the website tailored around this preference. They are not concerned about t-shirts or cotton pants. AI is a great way to provide personalised recommendations to users based on search history, past purchases, and overall shopping behaviour.

2. Dynamic Pricing

The latest trend in pricing strategies is dynamic pricing. It refers to the practice of changing product prices based on market conditions in real-time. For example, if there is a sudden increase in demand for umbrellas due to continuous rain, the AI model will reflect this demand in the pricing. Of course, there are other factors to consider, including competition and other market factors. This can be a great way to enhance sales since prices are updated continuously.

3. Chatbots and Virtual Assistants

Customers expect prompt replies to their queries. A slight delay is a source of inconvenience and reason enough to go to a competitor store. With AI-powered chatbots, stores can provide human-like responses to user queries promptly. This can go a long way in enhancing the user experience.

Secondly, AI allows chatbots to interact with multiple data sources, allowing the bot to answer complex queries. For example, if a user wishes to know the expected date for a product restock, the AI can retrieve data from inventory management to ascertain when the next shipment is expected.

Similarly, virtual assistants are the next hottest thing in eCommerce. When you walk into a physical store, there are salespeople to answer queries, find items, and even help you finalise a product. Of course, in an online store, there is no salesperson. Tis is where the virtual assistant comes into play.

They help users navigate the website, including finding the relevant products and other important information. With advancements in AI, these assistants are just like a human resource if not better. If you are experiencing high levels of customer queries and cart abandonment, investing in an AI-powered virtual assistant is what you need.

4. Demand Forecasting

One of the biggest challenges facing any business is what product to order and in what quantity. Overstocking and understocking are both harmful for a business. For instance, understocking translates to lost sales. In case of overstocking, the business has tied too much capital which could have been better utilised elsewhere.

If you search ‘AI demand forecasting’, you’ll come to know how organisations are harnessing the power of AI to forecast demand. The AI models utilise historical data, current market information, and organisation-wide data to predict demand. Based on the analysis, the business can order products accordingly.

In eCommerce, where competition is ever-increasing, using AI can save store owners valuable resources. They can order the right product in the right amount, thereby ensuring maximum efficiency and sales. With high profitability, they can reinvest into the business to improve other areas.

5. Inventory Management

Another way AI can boost your Magento store’s sales is through inventor management. Suppose a business requires the shipment to come in by maximum 20th of this month. However, the procurement manager fails to order the products. Delayed shipment means lost sales and negative customer experience.

AI models can keep track of inventory models and place orders automatically. For example, if a frequently bought product is nearing out of stock, the AI will place the order itself. This automation ensures that products are always in stock and human workers can focus on areas which generate greater value.

6. Fraud Detection

Payment fraud is at an all time high. Criminals frequently steal payment information of others and engage in fraudulent purchases. For businesses, this is a serious concern as the bank or card issuers initiate a chargeback process. It means that the merchant must pay back the amount to the cardholder.

In most cases, they have already shipped the product, meaning they suffer a double loss. One option is to restrict payment methods, thereby blocking payment methods that have the highest risk of fraud. The other option is to use AI to monitor user payments and detect fraudulent activities.

The AI model analyses a customer’s past purchases and overall shopping habits to determine if the purchase is legit. If not, the AI will automatically require additional verification and put the transaction on hold. AI’s role in preventing payment fraud can be better understood through an example.

Suppose a customer based in city A shops once every two months for a few clothing items, usually under $100. However, just after a week from the previous purchase, the customer places an order of $500 and to a different city. AI will detect that the purchase is not in line with previous purchases and put the transaction on hold.

7. Customer Insights

Similarly, store owners can use AI to get customer insights. For example, all the comments on a store’s social media channels are of utmost importance, provided the store knows how to make use of them. AI can analyse the comments and other forms of user interactions on social media to understand customer sentiments.

The store can then use the insights to make informed decisions regarding their products and services. Likewise, AI can be extremely helpful in customer segmentation. It can analyse large amounts of data quickly and then provide recommendations on how to segment them for better marketing efforts.

8. Website Navigation

One of the top reasons behind a high bounce rate is poor website navigation. If users have trouble finding the relevant information or product, they have little reason to continue browsing your website. A poor user experience means bad reviews and negative word of mouth.

On top of it, high bounce rates impact a website’s search engine rankings. If your website goes down in the rankings, the organic traffic will drop. It will lead to a substantial decrease in sales and overall website engagement. Therefore, using AI for enhanced search and website navigation is a must.

AI can be used to understand natural language which most online shoppers use. This can help the website show them the most relevant and accurate results. Similarly, AI can be used to allow customers to search using images. The AI tool will analyse the image and look for similar products on the store.

Visual search is gaining considerable popularity, and it is high time that store owners focus on it. Moreover, AI can be used to set up dynamic navigational menus. In it, the menu buttons change on a user’s online behaviour and past purchases. This allows the website to show only relevant links to the user.

9. Marketing

Lastly, AI can boost your marketing efforts. For example, you can use AI tools like ChatGPT or Google’s Gemini to write blogs and marketing copies. Similarly, tools like Midjourney can be used for image creation. These tools reduce the time it takes to create content. At the same time, they ensure greater consistency.

Of course, we don’t recommend simply copy pasting AI-generated content. Remember, the content is for humans. Therefore, you should humanise the content prior to publication. This will require human effort. A key marketing strategy for any online store is search engine optimisation (SEO).

Within SEO, AI can offer a lot more than blog writing. Businesses are using AI for keyword research, competitor analysis, and more. Similarly, AI can help map the customer journey across the website. You can use the information to create hyper personalised content for each stage.

Best Practices to Integrate AI in your Magento Store

Since AI is very much a necessity nowadays, let’s focus on how to best integrate it within your Magento store.

Identify Key Areas

The first thing to identify is which areas you wish to implement AI. After all, not every area requires specialised AI tools. Based on our experience, the best areas to implement are the ones which are the most problematic for you or which you perceive can generate the greatest return on investment. For example, a store may have excellent customer service, but the marketing strategy is a big failure. For them, investing in AI marketing is a much better option. For others, sales may be an issue.

Selecting the Right Technologies

The next step is to identify the right technologies for your requirements. For example, there are countless Magento AI extensions across different niches. Of course, not all Magento AI extensions are the same. Therefore, you need to be careful when buying a Magento AI extension or getting a custom solution. We recommend sticking to reliable and trusted Magento AI solution providers.

Seamless Integration

Once you finalise the extension, the next step is to ensure its seamless integration. Since Magento is a highly customisable platform, most merchants have undertaken considerable custom development. Therefore, integration can prove challenging. The only way to ensure fool-proof integration is to thoroughly test the AI integration in staging environment in different conditions. Once it passes all the tests, deploy it to the live site.

Focus on Data Management

Once the Magento AI extension is integrated, your next focus is data management. It includes:

  • Prioritising Quality Over Quantity
  • Obtaining User Consent to Gather Data
  • Storing the Data Securely
  • Using Advanced Tools to Clean, Process, and Interpret the Data

User Training

Once the Magento AI extension is in place, you need to turn your attention to user training. They need to be aware of how to use and manage the AI solution effectively. What most businesses fail to understand is that AI is not something which is confined to a single team. Instead, the whole organisation needs to be involved.

Measure the Results

Implementing a Magento AI extension alone will not guarantee any results. What store owners need to do is measure the results and ensure that the key performance indicators are being met. If not, the solution needs to be revamped.

Keep an Eye on the Latest Trends

Lastly, store owners need to ensure continuous improvement. This can be achieved by bringing small improvements within the AI solution and by keeping an eye on the latest trends.

Final Thoughts on Using AI to Increase Magento Sales

As you can see from the above discussion, AI offers many benefits to online store owners. Specifically, AI can boost sales and enhance the customer experience. Therefore, instead of worrying about the pitfalls associated with AI, focus on the positives. It will transform your online store into a powerhouse and go-to choice for your target audience. Contact us if you require any help with Magento AI extensions development and integration.