A virtual online shop assistant with AI
A virtual online shop assistant with AI
A good idea for your startup
Trend: The e-commerce technology market share is expected to reach $10B by 2025 with a CAGR of 19.07%. Simultaneously, there are several key trends within the digital and e-commerce world such as seamless shopping experiences across multiple channels (online, mobile, in-store), integration of Conversational AI and a megatrend – personalisation of customer experience.
Investors' Bets: One of the most prominent e-commerce challenges is to convert visitors into paying customers. An e-commerce website may experience a lot of traffic, a lot of clicks and impressions, but they aren’t making the sales they anticipated. Additionally, customer experience significantly impacts abandoned carts and basket size. Shoppers expect a similar if not identical experience as the one they would receive in a brick and mortar store. Frontnow (Germany), which promises increasing conversion rates by up to 74%, raising the average basket size by 57%, and reducing abandoned carts by 25%, has raised €3.8M (extended Seed). According to the founder, last year, they managed to develop from zero to over 1 million ARR in just 9 months. Frontnow offers a virtual shopping assistant (Advisor) that is easily integrated into online stores. It offers personalised recommendations and engaging interactions with an aim to provide optimal customer advice. It takes advantage of generative AI in order to improve communications and ensure long-term competitiveness. As Frontnow claims, the Advisor utilises over 40 algorithms, including various Large Language Models (LLM), all trained on proprietary corporate data.
More bets: Chatbots are still far away from replicating the experience of interacting with a live person. This is claimed by the startup Humankind (the US) – a platform for shopping curators (raised $6M in Pre-Seed and Seed in 2022). It integrates with an online store and allows for a live "concierge service" for potential buyers. A dedicated coach will pick out the most suitable product using a widget on the website or messenger.
To-Do: A mixture of AI and personalisation comes in everywhere. This trend will be maintained over the next few years. Not so long ago, I covered immersive video stories and AI for trying on clothes. It may be a good idea to develop a similar service but with a laser focus on one sole niche. Additionally, the combination of services mentioned above (AI, Immersive videos, live shopping curators) might be another source for something new.
If you're unsure where to start, visit an incubator's page. If you already have a project and need funding for your startup, click here for more details.
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