The modern day shopping experience is flush with personalized options, concierge services, same day shipping and of course, endless options. While shopping online allows consumers to order products from virtually anywhere in the world, it can be challenging to sift through the unwanted items and find the desired ones.
As stated in a study by Forrester Research, U.S. consumers will spend $327 billion online by the end of 2016. With more opportunities than ever to capitalize on online spending, online retailers are realizing they must make an impression on consumers. How do they do that? According to AI expert Akash Bhatia, it’s all about personalization.
“Today, eRetail is failing to leverage the full potential of data to improve the shopping experience,” says Bhatia. “In the brick and mortar world, shopping experiences are tailored and meticulously thought through. But eCommerce tends to get very impersonal, catering to the millions, rather than one.”
I connected with Bhatia to learn more about how he built his company, Infinite Analytics, with the mission to leverage data and artificial intelligence to help retailers to personalize the shopping experience. Here is what he had to say:
Q: Can you describe how artificial intelligence plays a role in product personalization for the retail industry as a whole?
Bhatia: AI is grossly underutilized in retail. Personalization is a multi-dimensional problem instead of a one-dimensional one. There are many factors that influence what the user might want to shop for – a life-changing event, a birthday, a salary increase, and even changing color, style, and size preferences. A lot of this information is very subtle and requires a lot of data to be processed.
Traditional algorithms cannot handle large amounts of data and cannot recognize patterns and trends that could signal a consumer’s intent. This is where Artificial Intelligence comes in. Deep Learning, Big Data, and Natural Language Processing algorithms help read and understand texts and images, while continuously learning with every new signal that gets uncovered. This sort of creates a virtuous circle, where each data point now adds to new signals about the user’s intent to purchase, leading to newer signals being discovered, leading to more sales.
As depicted above from Infinite Analytics, it is a fundamental importance in eCommerce (or any commerce) to present the right product to the right buyer. Artificial Intelligence can give a retailer an edge by leveraging this core concept.
Q: What was the opportunity or void you saw that inspired Infinite Analytics?
Bhatia: Today, web platforms are personalized using rule-based systems, or systems that consider only one source of data. We call it, Personalization 2.0. Even on Amazon, which pioneered personalization, if you purchase a television set today, you will still see television sets being recommended to you weeks later – that is not personalization for a segment of one.
Web experiences can and should be more personal for every user. We work with web businesses to enable the personalization of their user-facing platforms. By using multiple data sources, both for the user and the product catalog, we detect every pattern and signal that will determine what the user would like to purchase, the spending potential of the user, the colors and patterns he or she gets attracted to, and many other attributes. It is the opportunity to pioneer Personalization 3.0 that excites us. It is the opportunity to break down data silos and create monetizable products.
Q: What are three ways you predict the eCommerce industry will change in the next 3-5 years?
Bhatia: In the next 3-5 years, to level the playing field with Amazon, retailers will leverage any and all kinds of data to better understand their users.
Pure eCommerce companies have traditionally been technology companies that also sold stuff. Their ability to leverage technology to gain greater efficiencies gave them a head start over brick & mortar retailers who had more complexities to deal with, and treated eCommerce as a separate channel tucked away in some corner. But they soon realized that unless eCommerce and mCommerce were tightly integrated with their brick and mortar business, they would flounder. Omni-channel thus became a buzzword.
Soon, personalization driven by AI and deep learning will become the new normal, with websites dynamically personalizing product search and discovery for every user.
This, combined with super efficient delivery (again driven by big data analytics), user behavioral data from IoT (Nest, Fitbit, etc), loyalty program data, and omni-channel capabilities will separate the winners from the losers.
Q: Can you explain a bit about your background and how your previous experiences helped you to accomplish what you have to date?
Bhatia: My cofounder Purushotham Botla and I met in a class at MIT that was taught by Sir Tim Berners-Lee, the inventor of the World Wide Web. As a class project, we built a platform that would consume and merge user-data from multiple sources very easily. After Sir Tim said it was one of the best projects he had seen, we were inspired to scale our idea. We converted the class project into a platform and realized the intrinsic value from multiple sources of data. That class project evolved into what is now the Infinite Analytics platform.
Q: What direct impact do you see Infinite Analytics having in these industry improvements?
Bhatia: Infinite Analytics is constantly looking for ways to democratize AI for retail. AI is moving at a very fast pace and Infinite Analytics is always incorporating the latest technology into our products, and to make our products simple enough for an 8th grader to implement. Retailers will not need to spend 6-8 months implementing newer technologies only to find out that a rival has just implemented some newer technology. They will do so just by turning on a switch.
By leaving the AI-driven personalization to us, retailers will be able to devote more time and energy to other functions of their organizations. The biggest impact will be when retailers find themselves a level higher than Amazon when it comes to personalization in this omni-channel world.