AI and the Intersection of Content and Commerce

by Scott Henning, Product Manager

While applications of artificial intelligence continue to expand across different industries, they have been fully entrenched in digital content for years. Facebook uses AI to power its newsfeed content delivery to over half of the world’s internet enabled population, increasing relevancy of posts for individual users. YouTube uses deep learning and artificial neural networks to select optimal thumbnail images to lead viewers to the right videos. Spotify employs similar AI methods to recommend songs to its 100+ million listeners based on identifying ineffable song qualities. Which is to say: whether users are conscious of it or not, AI has permeated virtually all forms of consuming these media digitally.

In online retail, however, we have focused for years on applying to AI less to the content of the shopping experience and more to the commerce of it.

Let me explain:

AI-driven solutions work to optimize the ways that stores can move shoppers through the purchase funnel. These AIs bring more prospective customers into the top of the funnel, or they drive purchases toward products with higher margins, or they reduce the likelihood of returns, or they optimize shipping method options. Algorithms can identify discrete signals in customer behavior that correlate with probabilities, and make discrete decisions based on them. The majority of these applications affect the transactional aspects of shopping – the commerce – but ignore the experiential and conversational aspects of shopping – the content. But just as posts, videos, and music are the critical content for platforms like Facebook, Youtube, and Spotify, comparisons, reviews, and personal engagement are the critical content for retail.

In brick and mortar retail, the main benefits to a shopper are in the attention paid to content, whether or not they identify it that particular way. In other words, when a shopper gets unstructured advice from a salesperson about what shoes go with their socks, or what varnishes go well on their deck, this unstructured help is the content advantage of brick and mortar.

This is what a content advantage looks like
This is what a content advantage looks like

The “funnel” points of brick and mortar – entering the store, product display, the literal checkout process – can certainly be optimized as well, but the level of engagement in brick and mortar content has never been matched online. The physical freedom that allows a shopper to freely move through the store and interact with the catalog as they choose is often another content advantage.

Some of the best online retailers have recognized this for years. For example, the distinction between content and commerce on Amazon’s core site has been blurred across multiple dimensions. The traditional checkpoints of commerce – moving shoppers through an abstract funnel – become less important when a retailer has rich content and interactivity to provide to those shoppers. Amazon’s massive review sets and product information provide information that consumers crave, even when they have no initial intent to buy. In fact, Amazon takes a page from traditional content media and refers to retail stocking and merchandising of new products as “publishing” new SKUs. Interestingly, this the focus on content – information, recommendations, interactions, and personalized engagement – is philosophically closer to the inherent value of brick and mortar. In fact, report after report has underscored that Amazon’s advertising and content is responsible for much of Amazon’s retail business profit.

To a retail business, the value of their physical store is not its ability to collect the shopper’s money – the commerce. The majority of the value lies in everything else the store provides – the content. A shopper’s ability to carefully inspect details of a product doesn’t translate well to traditional online retail.

Similarly, the way in which a shopper can move through a physical store and navigate the merchandise – naturally, fluidly, based on inspiration – is not captured in the structured confines of funnel-based, online shopping. And most importantly, the interaction with a salesperson – allowing for personalized aid based on specific and unsupervised needs – has been a patently ignored piece of online retail.

And this is where AI like Sentient Aware can finally bridge the gap. Aware enables online retail by addressing the deficiencies in content, which translates into significant improvements in commerce. It has a deep understanding of shopper preferences, the appraisal of merchandise beyond simple metadata and attribute tagging, and the ability to engage with an AI-driven sales agent in interactive conversation. Aware understands both the content of a catalog (i.e. the products themselves) and in-the-moment user behavior. It can understand intent and style, the exact sort of content advantages brick-and-mortar retail traditionally have.

In other words, Aware gives online retailers some of the same content advantages physical stores without mortgaging the inherent benefits of ecommerce. And that means that while the 20-year-old traditional online store commerce paradigm has plateaued, the journey to bring artificially intelligence store content to the consumer is just getting started.