Why B2C business leaders rank AI personalization as a critical growth opportunity

As competition heats up in the online consumer and retail space, business leaders continue to feel pressure on delivering greater value and gaining more market share. While powerful search technology is considered absolutely crucial by many B2C leaders to meet these challenges, AI-enabled personalization is also shaping up to be a critical component. Given the seismic changes that AI is bringing to the B2C space, technology that lets you personalize the consumer experience and the online journey is starting to become front and center in the never-ending quest for growth and revenue maximization.

In our recent B2C Ecommerce Site Search Trends Report for 2024 we took a detailed look at the retail ecommerce landscape. Based on a survey of 1,100 B2C business leaders operating in key markets around the world, the report takes a deep dive into the pulse of the B2C space to find out how businesses are harnessing the power of search and AI to revolutionize the art and science of online retailing.

Personalization in the era of online merchandising

Most of us have already had a personalized online shopping experience, often without even being aware of it. Ecommerce giants like Amazon have been harnessing the power of their proprietary technology, tailoring the shopping experience for each customer by offering a curated selection of goods when they log on and browse.

These big players have set the bar high. So, while our study shows that more than two-thirds (68%) of businesses have dedicated merchandising teams and 54% have a dedicated solution in place for those teams, most are behind when it comes to having the kind of smart AI based tools and solutions that deliver a high level personalized shopping journey.

Respondents agree that customization is important because it lets them reach out to their customers effectively. Yet only 51% of those interviewed had merchandising solutions in place with the comprehensive capabilities and customizable features that they need to effectively reach their merchandising and customer journey goals.

No two retailers are alike. Each one is looking to deliver a unique and exceptional customer experience from the beginning to the end of the sales funnel. That is one reason why less than a third of the retailers we talked to use out-of-the-box solutions.

Shaping a positive online retail journey isn’t just about converting a visit into a sale. It is also about the pleasure of being offered a meaningful set of curated items to discover and consider. This generates the kind of customer delight that drives repeat visits, and it’s why every ecommerce business has to tailor functionality to suit the particular needs of its customers.

What AI does for personalization

The convergence of AI and ecommerce marks a new era in online retailing. Our research shows that B2C professionals see product recommendations (52%) and personalization (42%) as key factors shaping the online shopping experience moving forward.

An overwhelming number of respondents now understand that to remain competitive, businesses have to harmonize product promotion with the creation of personalized experiences for their online customers.

As AI assumes a pivotal role, merchandisers have better and more powerful tools like Algolia Search and Merchandising Studio at their disposal. These let them maximize the power of their companies’ online real estate and optimize their digital platform to its fullest potential.

Creating unique experiences is one positive outcome, but AI-powered search brings a host of other benefits that boost customer engagement and improve the user experience, maximize conversions, and improve ROI. These include:

• Better insights – At its core, AI is about using data to automate merchandising decisions, fully or partially. Algolia’s powerful toolset provides online retailers with the rich data that allows teams to better understand customer desires, preferences and pain points.
• Enhanced user experience – With better, data-based insights, it’s easier to tailor and curate solutions that meet the unique needs of individual customers. And as our report suggests, these are the types of interactions that customers now expect.
• Higher conversion rates – By delighting customers, online retailers have a much better chance of turning a site visit into a purchase and a buyer into a loyal return customer.

The key to improving customer engagement

The move to personalizing the ecommerce and omnichannel shopping experience is not a passing trend. It represents a profound change in how businesses connect with their customers. Algolia Search and Merchandising Studio give teams the AI-based tools they need to generate the targeted and personalized shopping journey that users expect. Research shows that if content is personalized, 51% of US consumers say they’re more likely to buy something and 49% are more likely to be loyal customers.

With rich data insights, businesses and their merchandising teams can crystalize an online strategy that generates positive impacts at every step of the sales journey. It allows them to focus their attention on improving the customer experience and as a result generate the conversions and ROI that translate to business success.

At the cusp of a new era of digital merchandising, online and omnichannel retailers need powerful tools to deliver the kinds of solutions their customers now expect. Applying the right technology solution is key to staying ahead of the curve in the competitive and quickly evolving online retail landscape.

To find out more about the state of search, AI and personalization in the B2C online retail space, download the B2C Ecommerce Site Search Trends Report 2024 .