Three Things to Know about AI for Cross Border E-Commerce Retailers

2019-06-19T01:24:00-03:00January 11th, 2019|Best Practices, News|

The International Consumer Electronics Show (CES) in Las Vegas this week is an extravaganza of what’s possible in consumer gadgets: jet packs, talking robots, flying cars, intelligent drones and more. For online retailers, CES may seem like more of a pie-in-the-sky trip into the future than a place to gather practical advice. But if we put aside flashy prototypes that may never see the light of day, and instead focus on the emerging technology behind them, there’s a great deal retailers can learn.

One prominent topic that is receiving a lot of attention this year is artificial intelligence (AI), known as intelligent behavior carried out by machines that have been programmed using high volumes of data to make autonomous decisions. AI has become such a big topic in consumer electronics that this year, it had its own track of sessions at CES.

Here are three trends in artificial intelligence coming out of CES this year for international retailers to consider. 

1) AI is advancing quickly

Most consumers are familiar with AI-enabled devices that feature a built-in virtual assistant, such as Apple’s Siri or Amazon’s Alexa. Some consumers, especially those whose native language is not English, have reported lackluster experiences with these devices. But CES exhibitors this year have highlighted advances in AI that make devices more inclusive and versatile. For example, Google Assistant has just added support for nearly 30 different languages in 80 countries. Alexa now boasts 60,000 skills and is compatible with more than 20,000 devices. And other device retailers, such as Sony, LG and Panasonic, are trying to give Google and Amazon some competition in this field, showcasing market-ready televisions, smartphones, speakers, and home appliances embedded with AI features.

Samsung, for example, has added more intelligence to its virtual assistant, Bixby. According to CNET, Bixby now has the capability to remind consumers to fill up their gas tanks, schedule a doctor’s appointment, or even pick up groceries or laundry detergent by connecting its interface with compatible smart refrigerators, washing machines, wearable fitness devices and even cars.

AI is even working its way into subcategories of consumer goods. Personal care giant Procter & Gamble introduced six new connected devices, including an AI-powered “skin advisor platform” based on its popular Olay beauty line, as well as a smart toothbrush that gives consumers real-time feedback on how to improve their dental hygiene.

2)  International consumers already like smart devices – and they want more

Retailers can build significant revenue streams by entering new international markets with AI-powered smart devices. IDC reports that the smart home market will reach nearly 1.3 billion devices worldwide by 2022 and will reach a five-year CAGR of 20.8%. Japan’s smart home market is expected to be $5 billion by 2024, growing its CAGR by double digits. And IHS Markit predicts that by 2021, the EMEA region will represent the largest portion of smart device revenue, with a 42 percent global share.

What kinds of smart devices do international consumers want most? IDC predicts that the fastest growing category of smart devices, with a projected five-year CAGR of 39.1%, will be smart speakers such as the Amazon Echo and Google Home. PWC reports that 10 percent of international consumers already own at least one AI device, such as a personal assistant or smart speakers, and another 32 percent said they plan to purchase one. In 2017, nearly 6.5 million units of smart speakers embedded with AI-powered assistants were sold in the U.K., Germany and France. Amazon’s Echo is currently edging out Google Home for market share globally.

3) AI can help all retailers, not just device makers

AI offers significant opportunities for electronic retailers, but even e-commerce companies that don’t sell smart devices can benefit from this technology. Online retailers are already aware of how machine learning and AI can support customer service during the shopping experience. Currently, AI is helping online retailers communicate more effectively with shoppers through chatbots. As Tech Advisory notes, “Automated systems like chatbots provide accurate and quick responses because they can be programmed to respond rapidly and accurately, handle large volumes of queries, and be available 24/7.” But chatbots are only the beginning. AI-powered voice is the next big disruptor in product discovery, checkout, and even up-selling.

Imagine an AI-powered voice assistant, similar to Siri or Alexa, that guides your customers through a personalized online experience, from browsing to checkout. Each time your customer visits your online shop, they receive a personalized voice message that alerts them to special offers and sales based on their last visit. Soon, customers will even be able to authorize payments via virtual assistants, such as Google Assistant. AI has the potential to take personalization to a new level with online shopping. Machine learning can analyze customer behavior data to create customer profiles that retailers can use to improve upon the last experience. With AI, it’s possible for online shops to create a highly customized experience that feels like it was built just for your customer – because it was.

Market entry considerations

Cross border retailers will need to consider the challenges of market entry with smart devices. As we outlined in our recent blog about the international electronics and appliance market, retailers must be aware of the potential for fraud and ensure compliance with energy efficiency standards in countries where your smart devices are sold. Data privacy is a consideration in markets with strict laws such as GDPR. This is due to the nature of smart devices, which are often powered by the data they collect about the consumer. These considerations are growing enough to warrant a dedicated session on this topic at CES.

For online retailers who are considering expanding into new markets with smart devices, it’s best to work with technology partners and market entry experts about what’s required in each country. For more information, contact a Flow expert, or download our International E-Commerce Kit today.

Written by
Juliana Pereira is Vice President, Marketing at Flow Commerce. With 15 years experience in marketing and ecommerce, Juliana joined the Flow team after serving as Vice President of Marketing at Smartling. Previously Juliana worked across a variety of verticals and industries, from non-profits and publishing to tech and fashion, including management positions and key contributing roles at Ralph Lauren, The Met Store online (at The Metropolitan Museum of Art), Ziff Davis, and eMusic.