Generative AI: The Next Wave of Personalization Demands Greater Agility

We all know that today’s online shoppers are looking for e-commerce businesses to connect with them on a personal level. This approach is especially important for businesses to stand out from the competition. By delivering relevant, targeted content and experiences, e-commerce companies can increase conversion rates, order values and ultimately, customer loyalty.

This is known as personalization, and it’s all about getting inside a customer’s head and appealing to each person based on a knowledge of what content resonates with and interests that person the most. Up until a few years ago, e-commerce companies relied heavily on third-party cookies to accumulate data gathered between browsing sessions across various websites to create a clear picture of a user, but this is now set to change.

In 2020, Google announced its plans to make third-party cookies obsolete on the internet, in response to increasing consumer privacy demands and new regulations.

Just last month, Google unveiled its timeline to begin migrating Google users to the Privacy Sandbox by early 2024, with the official, complete deprecation of all third-party cookies on track for the second half of 2024.

Whether they want to or not, e-commerce marketers are going to have to adapt to an environment free of third-party cookies. Many are filling this void by leveraging first-party cookies and zero-party data coming from a variety of sources, including sales interactions, social media, web forms and more. Still, many e-commerce marketers are left wondering – what will fill the void in personalization after third-party cookies are no longer available?

Generative AI – A Saviour for Personalization in a Cookie-Less World

As cookies are being phased out, generative AI is being looked at as the next great personalization enabler. Generative AI is a subset of machine learning that uses algorithms to make new content, and allows marketers to automate content creation and produce impactful visuals, captivating videos, persuasive copy and unique and engaging advertisements, all at scale.

With generative AI, marketers can create dozens of different personalized campaigns extremely quickly, which can all be A/B tested in order to determine which direction works best with the widest number of people.  In this sense, this tactic is not really about individual personalization anymore – you don’t need one-to-one personalization so much as a clear connection for the majority of users.

In fact, generative AI is set to dramatically alter the e-commerce marketing landscape as we know it. Never before have e-commerce companies been able to iterate and test so quickly, and they can rapidly experiment to determine what content is the best at driving conversions at scale, without necessarily needing to collect data on consumers and infringe upon their privacy.  The key intuition here is that generative content creation is fast enough that you can test alternative experiences for users in minutes. Do that right, and you know what works for shoppers today, not last month.

If it sounds too good to be true, it may be – because there are several challenges ahead. The primary one regards the lack of personnel needed to handle these opportunities.

According to our recent survey, a large number of marketers are frustrated with the availability of developer resources and believe it takes far too long for code changes to be made. To be successful, real-time personalization must be dynamic; fast and accessible; and highly agile. This can’t happen if an e-commerce business takes days or weeks to change content or experiment by conducting A/B tests.

This need for agility is especially critical when e-commerce marketers are investing in paid social media (and paying for each click to their landing page). Demand on social networks is highly fickle and fleeting in nature, changing rapidly from one moment to the next. Generative AI can help e-commerce companies capitalize on sudden demand spikes.

For example, it can be highly advantageous to create a corresponding campaign on the main website if a product suddenly goes viral on social media – but storefronts need to be able to keep up, changing content on the fly.

Think Like a Marketer, Act Like a Developer

In this context, e-commerce marketers have to ‘think like marketers and act like developers.’ This means – being able to change site content on the fly and continuously experiment in order to determine what content drives the most conversions at scale, and being able to make adjustments in near real-time. Development dependencies must be eliminated in order to get conversion-driving storefronts to market faster, which means e-commerce marketers need tools enabling them to make quick changes and adjustments on their own.

Generative AI looks to be the next big wave in personalization as third-party cookies become obsolete. But the power of generative AI will be severely hampered if our ability to move quickly and make rapid website changes remains hamstrung by a lack of personnel or other technical limitations. Empowering e-commerce marketers will be the key to unlocking the new personalization landscape where generative AI is king.