The Future of Retail: Exploring the Transformative Power of AI

Delian Partners
Mar 17, 2023
2 min read

In recent years, the use of artificial intelligence in the retail industry has become increasingly popular, with many big tech companies implementing the technology to enhance customer experiences and streamline operations. According to Yahoo Finance, the global AI retail market size is expected to reach $25.83 billion by 2028 from $5.19 billion in 2022.

Customer service stands out as the most prominent retail application for AI technology, with Amazon being one of the major investors in this domain. Amazon's Alexa Chat Bot is powered by a combination of natural language processing (NLP), machine learning (ML), and automatic speech recognition (ASR) technologies. When a user types a request into the chatbot, the ASR technology converts the text into a digital format that can be analyzed by the NLP algorithms. The NLP algorithms then analyze the syntax, grammar, and context of the user's request to determine the most appropriate response. In the meantime, the ML component enables the system to learn and improve over time based on users’ interactions: The more users interact with the chatbot, the better it becomes at understanding their needs and providing accurate responses.

Also, Alexa's AI-powered shopping assistant uses a combination of algorithms and data analysis to provide customers with product recommendations. In addition to that, the chatbot can also handle other types of requests, such as answering questions, placing orders, and providing customer with 24/7 support, meaning that they can to shop whenever they want without needing human assistance.

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AI is also being used by e-commerce companies to improve search results and product categorization. Alibaba, one of the largest e-commerce platforms in the world, uses AI-powered image recognition technology to automatically categorize products based on their visual characteristics, and uses NLP to analyze product descriptions and categorize them based on the words and phrases used. This allows the platform to identify product attributes and features even if they are not explicitly listed. Additionally, Alibaba has launched a virtual assistant, AliGenie, which uses AI to help customers with their shopping experience providing them with more personalized recommendations which are tailored on user’s preferences.

According to Yahoo Finance, AI market size was valued at $95.60 billion in 2021 and is projected to reach $1,847.50 billion by 2030, growing at a CAGR of 32.9% during that period. The use of AI in retail is becoming increasingly popular, and many big tech companies are developing new features to enhance customer experiences and streamline operations. Chatbots, virtual assistants, product recommendations, search optimization, and categorization are just some of the ways that AI is being used in ecommerce. As AI technology continues to evolve, we can expect even more innovative use cases to emerge, leading to improved customer experiences and increased efficiency in the ecommerce industry.

The information in this article should not be regarded as a description of services provided by Delian Partners SA. The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. The views reflected in this article are subject to change at any time without notice.

Social Commerce: A growth opportunity for Shopping

Delian Partners
Aug 5, 2021
2 min read

Social commerce is a part of the broader e-commerce ecosystem resulting from the combination of a 16.4% growth in social media usage year-over-year and the need for companies to reach customers wherever they are. In short, social media platforms today help businesses turning customers’ dependence on images and video into shopping activity, providing them with an immediate purchase experience.

Instagram and Facebook are leading the social commerce trend worldwide. Recently, Shopify partnered with the two platforms to connect more than 1million merchants with a potential daily customer base of 500 million and 1.9 billion users, respectively. As reported by eMarketer, in the US, 58% of Millennials said social media are an important source of information when making shopping decisions. Shopify’s customers can discover products while navigating on their favorite social network and interact directly with brands via messaging and Livestream shopping. After that,, they can complete orders by paying on the social platform through Shop Pay.

Pinterest also offers a visual interface that is ideal for social commerce, but unlike other platforms, 97% of the top searches on Pinterest are for unbranded goods. This unique marketplace is a great advantage for small and medium-sized businesses because their content can gain visibility based on the quality of their product and not by brand awareness. In addition, Pinterest’s most distinguishing feature is the use of Augmented Reality on its platform: When users see something in the real world, they can take a picture using the Pinterest camera and run a visual search for similar products. Or again, through an AR feature called "Try On", users can try on different makeup, save for later shopping, or buy through the retailer’s site.

According to Statista, Social Commerce is currently worth $89.4B, but it is expected to skyrocket to $600B in the next seven-year, as more people grow accustomed to buying online. With evolving technologies and the increasing use of smartphones, social networks are a key distribution channel for companies to both find new customers and boosting sales.

Live Streaming is Replacing Traditional Media

Delian Partners
Jul 21, 2021
2 min read

Even if live streaming has been around for many years, it experienced a tremendous acceleration during the pandemic as people spent on average 30% more time engaging with their smartphones and media devices.

As technology and media consumption remains higher than pre-covid levels, the success of Live Streaming is growing on a global scale. One of the sectors in which it has been more successful is e-commerce: E-commerce consumption accelerated by three years during the pandemic, and the increased competition in the virtual space worked as a catalyst, pushing companies to improve their users’ online experience and catch their attention.

Chinese tech giant Alibaba was the pioneer of Live Streaming in e-commerce. Through the Live Streaming platform Taobao, Alibaba created a new personalized shopping experience, connecting companies with roughly 800 million monthly users who visit Alibaba’s e-commerce site. Taobao’s range of products available in live streaming has been growing massively and the platform is expanding its offer to those categories previously available only offline, such as cars and large appliances.

Live streaming has also become a key feature in the social media landscape. With 2.6 billion downloads, 1.6 billion worldwide users (including Duoyin), and 800 million monthly active users, TikTok is one of the fastest-growing social media platforms ever. What makes TikTok unique is its AI algorithm. Once a video is uploaded on the platform, the AI algorithm uses Natural Language Processing (NLP) to analyze and categorize the video – including audio, hashtag, and images, which allows TikTok to provide users with highly targeted content that they find most interesting. In this way, TikTok’ content can engage its new users for up to 10 minutes, which is three times the capability of Instagram.

Another example is the Amazon-owned platform Twitch, which hosts 91% of all video game streaming and provides the content of more than 4 million broadcasters, monthly. In a high-competitive video games landscape, Twitch differs for the “Just Chatting” category: Streamers can engage with the community and talk to viewers even when they are not playing any game. To understand the impressive growth of the platform, consider that Twitch peaked at around 1.7 billion hours watched in November 2020, versus Facebook’s all-time-high of 250 million in September.

The live streaming market can become the largest entertainment medium. As reported by TechJury, the global live streaming market is surpassing the traditional media ecosystem - such as TV or social media- and it is expected to be worth over $247B by 2027. The growth trajectory is supported by a secular shift in consumer habits, considering that 63% of people aged 18-34 watch live streaming content regularly.