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Businesses Ride Ecommerce Boom

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Chat Bots Help Serve Customers Better

Businesses Ride Ecommerce Boom

Businesses Ride Ecommerce Boom

The COVID-19 pandemic has changed the ecommerce landscape and increased competition as online shopping has become the norm for a large portion of the population. This escalation in competition in ecommerce is twofold; brick and mortar businesses have opened and/or improved online storefronts, while new entrants have joined the increasingly crowded online shopping space. High competition, paired with high customer expectations, has started a technological arms race, where retailers are looking to add intelligent tools to their arsenal to help convert customer visits to sales. 

Businesses Closed Due To COVID-19

A Shift In Demand

Between February and April of 2020, retail and food services sales in the United States were down almost 8% compared to the same period in 2019. Consumers did not simply stop spending money altogether. Instead, they moved their spending to online retailers, increasing sales by almost 15%. This shift was even more apparent in the European Union, where online shopping saw a 30% increase from April 2019 to April 2020. 

Share of Ecommerce In Retail Sales
Retail Turnover Year Over Year

Consumers are voting with their wallet this holiday shopping season, reporting that they plan on spending 62% of their dollars online this holiday season, as compared with 53% last year. Similarly, it is projected that online sales over the 2020 Thanksgiving 5-day weekend will grow by 35% as compared with last year’s sales. It is estimated that this translates into a $10 billion increase in online sales, reaching $38 billion in 2020, up from $28 billion in 2019. 

Small and Independent Businesses Embrace Ecommerce

While headlines about online retail giants are easy to come by, big business is not the only area seeing growth. Etsy, a website that helps individuals sell their goods online has reported that non-mask sales are up 80% in 2020, as compared with 2019. This is in addition to $133 million in mask sales as of May 2020 on Etsy: 

“When the CDC changed its guidelines … we all of a sudden saw overwhelming amounts of demand come on to our site. It’s as if we woke up and it was suddenly Cyber Monday, but everyone in the world wanted only one product and it was a product that basically didn’t exist 2 weeks before.” John Silverman, Etsy CEO

Small Businesses Embrace Etsy

This trend for individuals and small businesses to move their storefronts online is not limited to just Etsy. Ecommerce platforms such as BigCommerce and Shopify have also seen an increase in sales this year, with Shopify reporting a 47% increase in sales year over year, beating a 40% increase estimate. Given that point of sale volume was down 71% in April 2020, this increase in online sales is notable.

Shopify also shared that new Shopify-run sites saw a growth rate 62% higher between March and April than the previous period, meaning consumers are hungry for online shopping. This fast growth is not just seen in sales dollars, growth of new ecommerce sites is rising even faster:

“Our partners are getting stores up and running, significantly faster, with the number of stores created in three days or less increasing by 85% between March 13 and April 24 compared with six weeks earlier.” Harley Finkelstein, Shopify CEO

AI-Based Tools Help Small Ecommerce Businesses

With all these new entrants and the increased focus on ecommerce, the online shopping space is getting quite crowded. Businesses that want to excel need to find ways to stand out from the crowd. Many are turning towards AI to help improve conversion rates and boost revenue. From chatbots to automated background removal on images, the opportunities to improve sales with the help of AI are many. 

Chat Bots Help Serve Customers Better


AI-based chatbots are being actively deployed by a range of AIaaS companies onto client ecommerce websites. These chatbots are able to interact with customers and quickly answer basic questions, allowing customers to be served more quickly than if they were serviced by a real human. According to Comm100, chatbots are able to resolve almost 70% of all chats independently, freeing up human resources for more advanced customer support, and more importantly, reducing the overall cost of customer service. 

Automated Background Removal

The automated background removal of images is another area where AI is having a large impact in ecommerce. Before automation, the removal of the background from a photograph required a trained human to use expensive applications such as Adobe Photoshop to manually outline an object to remove the background. Not surprisingly, this was an expensive and time-consuming process that was out of the reach of most small businesses. 

Now, with the addition of artificial intelligence, image background removal requires no special skills, is nearly instantaneous, and is affordable, helping small businesses display professional quality images of their products that help boost conversion rates and thereby revenue. 

AI Brings A Better User Experience

Most customers these days skip the browsing part of the shopping experience and instead go straight for the search box. By adding AI into the mix, ecommerce sites can autocomplete user searches, helping guide customers to their intended product quickly and easily. 

AI can also be used to create personalized product recommendations. In the past, each product recommendation was hand-selected by a human and they were rarely personalized to the individual customer. By adding AI to the recommendation process, websites can now recommend products based on user behavior, improving the quality of the recommendations, increasing session time and often average order value.

Finally, AI is also being used to improve marketing. From the intelligent targeting and delivery of ads at optimal time to AI-created email subject lines, the real world data shows AI can positively impact marketing activities. 

Improve Your Business With AI

Lucid, the AI industry experts, is ready to help bring the benefits of artificial intelligence to your business. From one-click image background removal to automated video previews, Lucid has the expertise you need to reduce costs and streamline your workflow. Contact us today to discuss how Lucid can help your business.