Generative AI in E-commerce: Innovation and Large-scale Personalization

The e-commerce sector experienced solid annual growth in 2023, with a remarkable increase of 10.5%. The revolution of generative AI is already underway. This is evident from the latest KPMG and Fevad study, which highlights the transformative impact of generative AI on the industry. French cyber buyers averaged 60 orders in the past year, spending a total of €4,055, resulting in nearly €160 billion in revenue for the sector in 2023.

The Impact of Generative AI on E-commerce Growth

E-commerce Growth Statistics for 2023

Product Sales: Internet sales of products totaled €62.9 billion, reflecting a slight decline of 0.7%. A 1.2% decrease in transactions was partially offset by a modest 0.5% increase in the average basket size.
Service Sales: In contrast, the services sector saw a robust 19% growth compared to 2022, with transactions rising by 11% and the average basket size increasing by 7%. In total, 2.35 billion transactions were completed in 2023, representing a 5% increase from 2022, with the average basket size also growing by 5.4%.

Generative AI: A Revolution Underway in French E-commerce

As French e-commerce reaches a new maturity level with its €160 billion revenue, generative AI has the potential to further reshape the landscape. A significant 71% of companies plan to implement their first generative AI solution within the next two years. According to a survey conducted by OpinionWay for Fevad, 81% and 74% of e-commerce leaders believe that marketing and customer relations are the two areas with the greatest potential for leveraging generative AI. Notably, 97% of the 118 surveyed executives view generative AI as the most promising innovation.

Adoption Rates of Generative AI in the Industry

73% of executives are optimistic about the productivity gains that generative AI can bring.
72% agree that generative AI does not undermine trust in their business.

Promising Uses of Generative AI in E-commerce

Generative AI is poised to transform e-commerce by enhancing both customer experience and back-office performance.

Today’s consumers are more informed and demand a fast, transparent, and intelligent shopping experience. Conversational chatbots powered by generative AI offer a more effective solution to meet these evolving demands.

Generative AI analyzes conversations linked to e-commerce pages to identify trends and customer sentiments, enabling brands to improve their understanding of customer needs.

By leveraging customer preferences, browsing histories, and search queries, generative AI enhances the shopping experience with more relevant personalized recommendations. Also it can improve the quality and speed of customer interactions, helping e-commerce companies to be more proactive in managing customer service.

Major e-commerce players like Amazon, Rakuten, Alibaba, and Walmart have integrated generative AI tools, even developing their own language models, to enhance their competitiveness in inventory management, demand forecasting, and delivery optimization.

A Strategic Transformation for Businesses

François-Xavier Leroux, Digital & Customer Partner at KPMG in France, states, “E-commerce teams, at the forefront of innovation, play a key role in adopting generative AI within businesses. This profound transformation requires not only an evolution of organizational processes but also modernization of technological infrastructures and ongoing investment in employee training. These efforts are essential to fully exploit the potential of generative AI and ensure seamless integration into daily operations while meeting new customer experience expectations.”

Marc Lolivier, General Delegate of Fevad, comments, “In a highly competitive e-commerce market, forgoing the productivity gains generated by generative AI means forfeiting the future. The question is no longer whether to use these new tools, but how to integrate them to maximize their benefits.”

Generative AI is reshaping the e-commerce landscape, offering significant opportunities for innovation and personalization. Businesses that embrace this technology can enhance customer experience and operational efficiency, positioning themselves for success in an increasingly competitive market.

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