While applying AI to business operations is undoubtedly beneficial, it does beg the question of how this know-how will influence the future of conversion optimization and how it will affect brand experience.

The application of AI has been precious in helping companies adapt to crises. AI-enabled solutions have been assisting companies in creating on-demand labor forces and stimulate better work environments, promote a business much more straightforward with little added cost, and help companies deliver “hyper-personalized” products and services to online customers with machine learning and real-time data analytics.

Artificial intelligence can be a brands’ and retailers’ new best friend - from primary contact to closing the deal. With AI-powered mobile applications that function on machine learning and comprise an artificial network, they will soon be a salesperson’s right hand.

More companies have already begun the AI journey in the post-COVID world. According to the Boston Consulting Group, 14% of companies increased both sales figures and profit margins during the pandemic. However, most companies are at the very early stages of AI — or have yet to begin. (Exhibit 1)

Source: BCG Henderson Institute

The Artificial Intelligence Revolution

At present, 80% of companies already have extensive online experience with digital implications such as automation and data analytics. On the contrary, AI enables machines to solve problems and take actions beyond that. AI tools analyze immense volumes of data to allow computer systems to comprehend the data, make complex decisions, examine human behavior, and recognize human response and speech, among many other things. AI-enabled systems also continuously learn and adapt. These capabilities will be enormously valuable as companies confront and adjust to the current crisis's new reality and the aftermath.

For instance, Amazon heavily invests in digital initiatives, while online grocery marketplaces and restaurants report huge increases in food deliveries. Cinema theatres have switched to digital streaming without even being released in theatres, and fitness companies such as Peloton, are launching online home-fitness services. Besides, forced isolation, combined with anxiety about an economic downturn, could cause consumers to cut back on luxury items in favor of essentials.


AI has the potential to discover upcoming trends and identify changes in consumer behavior. Even in an industry like fashion, some companies augment their business intelligence to improve conversion and detect trends early on. The fascinating thing is that AI also enables companies to personalize products to enhance customer engagement and sales. Starbucks' platform, for instance, makes coffee suggestions based on a customer's previous purchases, the weather forecasts, the time of day, and taste preferences.

With Artificial Intelligence, pharmaceuticals and medical institutions can enhance the process of creating new product offerings and accelerate R&D, which has traditionally relied on a lengthy trial-and-error process to develop new drugs. Moreover, makers of fast-moving consumer goods are using AI tools to analyze the consumer data on Alibaba's consumer platform to create new products tailored to Chinese consumers.

While applying AI to all the stated business operations is undoubtedly beneficial, it begs the question of how exactly this know-how will influence the future of conversion optimization and how it will affect customer experience.
AI shows promising results in conversion rates, improving the customer experience (CX) and results of A/B testing, enhancing personalization, and speeding up customer service excellence.

Redefining Customer Experience

The customer experience (CX) concept is a big challenge for many companies. A recently published report from Salesforce found that consistency is a critical element of successful customer experience. 70% of customers believe that processes based on earlier communications and contextualized engagement are essential for doing business with a company.

In other words, brands have to adjust every element of the customer experience creating a coherent message to improve the CX for customers. Reporters have agreed that customers are willing to pay more for a better experience or refer to the product or company to friends if it strongly affects their repurchase.

How AI is Shifting Customer Experience to the Next Level

Machine learning and AI technology can create a more optimized experience for every customer. Let’s take an example, FlyPolar. When this fashion brand experienced a four hundred percent decrease in sales in just four months, the business executives changed their approach to AI. Since most of their customers purchased online, FlyPolar adapted AI software to optimize its website landing pages. After several weeks of testing, the AI system identified the heart of the conversion problems and provided valuable insights for solutions. The company created a conversion funnel on the website with an optimized CTA button. As a result, FlyPolar increased its checkout page traffic by 16% and its order value by 13% in just three weeks.

This example shows how AI technology can quickly and easily identify the root of the problem, arguably one of the most challenging parts of optimizing the CX. The AI-powered capabilities can also simplify the process for customers by enabling them to find what they are looking for, which, in turn, improves their experience with the website. AI software can track past view and click rates, ratings, and even inventory levels to provide customers with relevant and tangible results.

For example, Amazon’s recommendation engine provides search results based on multiple data points, taking customer’s past searches, purchases, and product views into consideration, popularity, and ratings. By ‘grounding’ search results on multiple criteria, the company can push specific categories of products while providing customers with the results that fit their needs, creating a better customer experience with each query.

The Rise of Hyperpersonalisation

 Consumers are increasingly frustrated with companies that do not tailor their needs. According to Accenture's "Personalization Check" report, four out of five customers state they would purchase from a brand that offers personalization and recognition than businesses that do not. Another recent research published by Epsilon indicates that 80% of consumers are more likely to purchase brands that deliver personalized experiences to support this argument. 

Personalization is also directly related to higher profits. Researchers have noticed that businesses utilizing extensive data systems to create personalized experiences for their customers report up to 10% higher revenues.

One of the best examples of personalized strategy in action is Starbucks that reported a 300% increase in customer spending. Starbucks' customers receive customized offers and incentives to earn more points for a free drink regularly. Every customer's proposal is based on past behavior, including each customer's purchases and the types of items the customer tends to buy.

Starbucks' AI-powered personalization system sends out around 500,000 variations of emails - almost unique for each recipient. Due to the hyper-personalization that Starbucks proposes, many customers find it easy to fulfill the requirements for stated rewards, which in return increase consumer participation, purchase frequency, and customer loyalty.

Mastering A/B Testing with AI

Most marketing teams and web designers would agree about the benefits A/B testing delivers in grabbing customers’ attention. However, there are limits to the “old-fashioned” testing approach.

“In traditional A/B testing formats, you have your control vs. an experiment. You run that experiment against your traffic, and whichever design performs better is the one you deploy. Still, people have found that six out of seven experiments don’t result in a positive outcome, so you have to put a lot of energy and resources to try to determine how you can increase conversions using A/B testing,” says Jeremy Miller, marketing director at Sentient.

Artificial Intelligence can help solve A/B testing's three most significant glitches of A/B testing: time matters, insight, and limited variables. Rather than taking a linear approach to testing, AI can analyze dozens of variables simultaneously and instantly compare the results to determine the best combination.

For instance, when online Italian lingerie company Cosabella was redesigning its website, they used an AI-driven testing approach that enabled the company to simultaneously carry out an A/B testing experiment with more than 150 different design elements. With that number of variables, it would have taken up to a year of traditional A/B investigation to gather results; but the process took only seven weeks with AI. As a result, with the help of this testing approach, Cosabella increased its conversions by 38% and a 1,000% lift in newsletter signups.

Delivering Time-Sensitive Customer Service Fast

No doubt the efficient and fast customer service is the core of any business. The quicker is a response from a company to its customer, the better. For this reason, the demand for live chat grew by 8,5% last year. However, most businesses do not have the means to keep their customer service departments running 24/7, resulting in lengthy response wait times for disgruntled customers.

By automating customer service with AI-powered chatbots, businesses can solve wait time and the quality of the assistance that customers receive. A couple of years ago, Amtrak, the national rail operator, had a customer service department that serviced 30 million passengers each day. With such high numbers, it was problematic to handle all the inquiries promptly, so Amtrak decided to switch to the chatbot train with its AI-powered customer service agent, "Julie."

With the help of "Julie', most of the issues were resolved by pre-filling forms, scheduling tools, and online bookings. Hence, the number of calls and emails decreased dramatically. Julie had answered over 6 million inquiries and increased booking rates by 20% by the end of the year.
In terms of conversions, live chatbots can resolve the stated issues and increase a customer's chances to buy. When customers receive a speedy response, they are more likely to repurchase from that company.

AI-based chatbots can adjust their messaging based on FAQs and the customer's phrasing and responses. This process leads to better and more natural replies from bots that delight customers and give them the timely information they need.

One of the most evident benefits of AI is the direct impact it has on conversions. It improves the CX of web pages and delivers timely and accurate testing results needed to increase the likeliness of conversions. Machine learning and AI make hyper-personalization possible to customize the experience for each visitor. Finally, chatbots can increase customer engagements, resolve issues immediately, and close sales instantly.

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