Online Retailer Survey 2024 : applications, benefits, and challenges of artificial intelligence in e-commerce
Creators: name: Zumstein, Darius
name: Oehninger, Fabian
Publisher: name: ZHAW Zurich University of Applied Sciences
Year: 2024
Subjects: subject: Online retail
subject: E-commerce
subject: Online store
subject: AI application
subject: Marketing
subject: FOS: Economics and business
subject: Service
subject: E-payment
subject: 658.8: Marketingmanagement
subject: 006: Spezielle Computerverfahren

description: The online retailer survey/questionnaire was conducted for the seventh time in a row this year, and 624 online stores in the business-to-consumer (83%), business-to-business (46%), and manufacturer stores (14%) participated. In addition to 516 Swiss online retailers, 85 Austrian and 23 online retailers from other countries took part in the online survey. Half of the study participants are omnichannel retailers with retail stores, and a quarter are purely online retailers who only sell via digital channels.
Every year, traders are asked about current sales, service, and marketing trends. First, it became apparent that the sales growth of online stores and digital marketplaces is continuing while physical stores are losing ground. Second, numerous retailers mentioned that social commerce – especially TikTok stores – is still rising in marketing and sales. Third, the proportion of traffic and sales generated by smartphones continues to grow for most retailers. Fourth, competition from Asian platforms – above all, Temu and Shein – has increased massively over the past year. Four out of ten retailers are directly affected: Temu and similar players are pushing down prices, sales, and margins, increasing cost pressures, and pushing up advertising costs at Google and Instagram. Local online retailers try to differentiate themselves from Asian platforms with high-quality, sustainable, exclusive products, branding, and superior customer service.
Artificial intelligence (AI) applications are now a megatrend in e-commerce. More than half of all the retailers surveyed already use AI tools such as ChatGPT to create texts and translate them into other languages, e.g., using DeepL. This not only saves a lot of time but also reduces costs. Already, 42% of online store operators create product texts with generative AI, which leads to higher information and product quality, in many cases to a higher reach on Google and thus to more conversions and sales. AI is also used for product searches in the online store, digital sales advisors, and service chatbots. With 9% of mentions, AI is used remarkably little in personalizing content/offers or analytics (e.g., in data evaluations, pricing, or forecasting). One in five retailers is also planning various AI applications, reflecting how much momentum there is in this technology and the market. This study not only explores 60 potential uses and opportunities of AI in e-commerce practice, but also the many challenges. The biggest challenge is the lack of know-how and expertise for implementing AI in company business processes and identifying use cases with business impact. Some respondents struggle to maintain an overview of the complex issues and rapid developments. Despite the growing technological, market, and operational challenges, just under a third do not have their employees trained or upskilled because they believe there is no need – or have no budget or time. Half of their employees are trained internally, and a quarter of them are trained externally, mainly at university CAS courses.
In e-payment, the growth of TWINT and debit cards is continuing, and they are taking sales and market share away from credit card and invoice purchases. The four market leaders among PSPs (payment service providers) in Switzerland are PayPal, Saferpay from Worldline, PostFinance Payment, and Payrexx. Among the buy-now-pay-later providers, CembraPay and Klarna have established themselves at the top ahead of TWINT ("pay later") and the MF Group. Regarding "logistics and shipping," the study confirmed that Swiss Post and Austrian Post have a very dominant market position in parcel shipping, with 82% and 75% of retailers, respectively. As a result of price increases, the profit margins of many retailers have fallen, with higher shipping costs being passed on to customers or optimized in logistics processes. One in four retailers “dropships” at least part of their product range, and over 70% of them are satisfied with the success of this side of the business.