How AI Is Transforming Ecommerce With Personalization | #265 Luca Borreani

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Claus Lauter: [00:00:00] This is episode 265 of the e commerce coffee break podcast. Today I'm joined by Luca Boreani, co founder of zipchat. ai, and we talk about how AI is transforming e commerce with personalization. So let's dive right into it. But before we get started, a big thank you to our sponsors for supporting today's episode.

Have you heard about PartnerHero? They're experts in support on the e commerce industry, known for their outstanding team building skills. Their main pillars, quality, people, and culture makes them a great fit for your company. Learn more on partnerhero. com or click the link in the show notes. Are you feeling overwhelmed by marketing stress?

Say goodbye to pressure and meet your new secret weapon, a remote marketing assistant. Easily scale up your business, boost productivity, and reclaim your time. The game changer. Get your own marketing visit at half the cost. Visit Smart minus e-commerce minus marketing.com and discover the magic. Check out the link in the show notes now.

This is the E-Commerce Coffee Break, a top rated Shopify [00:01:00] Growth podcast dedicated to Shopify merchants and business owners looking to grow their online stores. Learn how to survive in the fast changing e-commerce world. With your host, Klaus Lauter, and get marketing advice you can't find on Google.

Welcome. Welcome to 

the show. Hello and welcome to another episode of the e-Commerce Coffee Break podcast. Today we want to talk on how you can transform your business, your e-commerce with personalization, with the help of ai. Now, a lot of merchants out there. I'm looking into 8i right now, and obviously they want to increase conversions.

They want to increase average order value, and there's ways to do that. With me on the show today, I have Luca Boreani. He's the co founder of zipchat. ai. He's a growth hacker and entrepreneur in the tech world with a varied resume. He has generated over 12 million. in online sales directly and also acquired more than 120, 000 customers at uDropy.

With skills ranging from viral loops to full stack marketing, from copywriting to sales, he [00:02:00] has also raised funds from venture capital giants like Sequola and Lunch. As I said, he's co founder of ZipChat, an AI chatbot for e commerce, and that's what we want to talk about today. Let's welcome him to the show.

Hi Luka, how are 

Luca Borreani: you today? Hi Klaus, I'm great. Thank you very much for having me and hi to everybody listening to us. Look at 

Claus Lauter: conversion rates. Most stores are somewhere in the 1, 2, 3 percent range, very, very low, and obviously it's very expensive to acquire new customers. And once you have them on the site, obviously you want to convert them.

AI can help with that. Give me a bit of an overview where versions without using AI right now struggle the most and what kind of AI or what AI can make a difference in the process of getting higher conversion rates. 

Luca Borreani: I've always thought that one of the reasons because people don't convert on website is because they don't feel the page they're on is basically personalized to them.

This is something I was thinking already in the past. I started with affiliate marketing back in 2013, 14. I already at the time [00:03:00] I was trying to create pages that were really personalized to the kind of audience and I was kind of creating like tens of different variations of the same basically landing page with the same message.

You're back. Slightly changing like the headline, this kind of stuff, but that kind of process was 100 percent manual at the time. But with the advent AI is basically possible to create, and it's going to be even more possible in the future because the great thing about the eye is that we are just in the super early days.

It's going to be possible to 100 percent customize the experience for each different customer. Something that for me was really incredible to read a few months ago was an article from Kit Leggett from Forrester. Basically it was a research saying that more than 50 percent of people don't finish a purchase, an online purchase because they cannot get an answer to a late moment doubt.

You know, maybe I'm buying some clothes. So I'm thinking about the sizing or. I'm buying some technology product and I'm not sure it's compatible with my products, my [00:04:00] stack. So at the end, I just decided not to buy because I cannot get the information, the answer to my question fast enough. Okay. Of course, website and stores, FAQ, they often provide like a number to call or like a support email to email or the ability to open a support ticket.

But unless I'm buying something really expensive. Again, this is all friction points. I mean, of course, if I'm buying something fast, maybe I'm on my phone for, I don't know, 60 bucks, 80 bucks, something like that. I don't want to waste time calling a toll free number or opening a ticket, waiting for an answer in a lot of time.

So the problem is in most cases, I'm not able to get that answer. Then I drop and then the conversion rate goes so low, but with AI. The first thing is that the entire page could be like kind of optimized for me in a faster and easier way. The second thing, for example, with our product, ZipChat AI, we developed a way for customers to answer questions and get instant replies from the AI.

Basically perfect, [00:05:00] because all the AI information, the knowledge base is based on the content of the store and whatever else the merchant decides to feed the AI with. And at the same time, the answer is 100 percent personalized. So let's say you have an English store and then you have a customer for France.

And of course, he can understand some things about English and maybe buy anyway. But at the same time, he can ask something in the chat in French. Because it's mother tongue, it's easier for him to communicate and explain his doubt. Like, until, let's say, yesterday. Unless the merchant had a customer service representative, a French speaker one, he couldn't really answer.

I mean, okay, could use a Google Translate, but it's not the same kind of conversation with AI. The answer is perfectly crafted in the person language and Google Translate. The tone of voice is using, or the merchant decided to set this kinda stuff. The answer feels really human-like and really empath empathetic and drives to higher conversion rates.

Claus Lauter: I think that's a very interesting finding that at most people drop off at 95% of their customer [00:06:00] journey. And then on the last thread she lose and. I'm just thinking about myself. That happens a lot to me. If I can't find the right information, I rather do not buy than buying something where I'm unsure if it's the right product for me.

Also with the languages, I mean, that plays right into that. If you have somebody, first of all, instantly replying to your question and then in your language, big advantage there. Now, obviously with AI, it's all about the training. We by now have heard that AI can hallucinate and come back with answers that are not right.

Now, Obviously, it's important to have the right data sources, the right information sources to train the AI. Tell me a little bit on how you do this. 

Luca Borreani: That's the most critical part, you know, because as you said, if the information are not correct, the answer can be wrong because of course, AI is not a good like technology.

It's something that works really good, but it's just as good as the information you provided in order to be. The closer to human like answers and perfect answers. So how our software works is pretty simple. [00:07:00] You install, for example, the Shopify app on your store and all the pages are crawled immediately.

So in a couple of minutes, basically the knowledge base is created. On top of that, you can add as many external sources as you wish. So you're able to add PDF, for example, with more detailed information about the products, like details, especially if you have, I don't know, some product that has lots of spec specs or like food supplements, you know, with ingredients, stuff like that, that kind of things you might not want to include in your landing page or a product page still can increase.

the likelihood of a person if he or she wants to ask specific question to answer properly. At the same time, you can add external sources. For example, we have some merchants that they are really specific industries where people might come and also ask some more generalistic questions. So not just related to the product, but more like industry related to better understand some terms or some words.

So what they do, they usually add some external sources, even from other website. [00:08:00] In order to have the eye knowing the topic is talking to so they create the context on top of that. We also have the ability to check every single chat going on with your visitors and your customers. What you can do is basically go to every single answer the AI is providing and correct the answer.

So as soon as you correct the answer, the new answer for that specific topic becomes a new knowledge based content. So the AI learns from the chat and is able to replicate a similar chat, because again, AI is not a chatbot, it's not something reconfigured. It's free to answer how it thinks is the best for the person interacting, engaging with it.

So it will take your answer, understand the context, understand what you change in the topic, and then provide a similar like answers to people. So for example, We have this customer that is merchant is a really big merchant from Australia is selling like some car tuning related products. I'm not a car guy, so I don't really know what, what those [00:09:00] tools are for, to be honest, but this guy, of course, selling products that are really specific to car models and car years.

So for example, a BMW from whatever year. Needs maybe a product piece that is completely different from the same BMW from another year. So as you can understand, it's really, really specific. So for example, he started in the first month, he provided, I don't know, hundreds of different correction to the eye in order to have the eye become perfect about that.

Still a lot of correction, but of course less until like last month, it was like two corrections. So on top, for example, in four months using us, he provided, I don't know, 700 replies correction, but all of them were basically the first month and a half, two months. Just because once the AI was trained, now he's replying like perfectly.

Just from ZipChat, he generated more than 600k USD just because the answers now are just perfect for his niche and for his kind of visitor. So this is great. 

Claus Lauter: And now a quick [00:10:00] break to thank the sponsors of today's episode. As a prominent player in the e commerce support arena, Partner Hero specializes in delivering personalized customer experience solutions.

With a clear focus on helping you not just meet but exceed your goals and requirements, they have become experts in e commerce support. Their commitment to tailoring solutions to your unique needs ensures that your support experience is nothing short of exceptional. Partner Hero is more than a CX company.

They are your partner in success. Visit their website and learn more on partnerhero. com Are you feeling overwhelmed by marketing stress? Say goodbye to pressure and meet your new secret weapon, a remote marketing assistant. Easily scale up your business, boost productivity, and reclaim your time. The game changer?

Get your own marketing wizard at half the cost. Visit smart ecommerce marketing. com and discover the magic. Check out the link in the show notes now. Yeah, that sounds great. Obviously now you end up with having a very skilled and trained salesperson in your store who is there 24 seven. And on that, I want to dive a little bit more.

You mentioned that the training and also the [00:11:00] numbers, um, what kind of reporting do I get out of your system to find not only the conversions, but also what's happening in the background? Because with AI, a lot of people might have the feeling that's out of their control and I don't really know what's doing.

How does that work? 

Luca Borreani: So all kinds of conversations going on in your store, you're able to open and track them so you can see exactly what the AI is saying, when it's saying, and to whom it's saying that. So that's really important for us to let our merchants know, because of course, as I said, it's important to provide correction to still improve the AI, and at the same time, we don't want them to think, okay, it's all automated, I don't have any kind of control.

So on top of that, we have an analytic section where we provide information like the number of orders that come from the chat or after interacting with the chat. Which gives merchants a sense of the kind of ROI they're getting on the subscription they pay to us, which for us, it's really important. We, we want to be a sales chat.

So our goal is to help merchants make more sales. Of course, the side effect is that it also handles the customer support because the knowledge base is [00:12:00] there. So the information are there, all the information are integrated through Shopify. So of course, if a customer is coming with questions about. In order for tracking or understanding where the product is, whatever related to that, the AI will be able to answer that kind of question and does the customer service part.

But still, our main goal is to help merchants generate more sales. So we have a charter to sale conversion rate tracking, which incredibly stands at 12. 3%, if I'm not wrong. Across all our merchants, which is super high, especially if compared to the traditional normal conversion rate you were mentioning at the beginning of the call, our top merchants, which is a food supplement store in Australia called Optimus, they have 32 percent conversion rate chart to sale, which is something incredible.

If you think about it, it means every three chat, one becomes a paying customers buying a product. So it's something mind blowing. Even yesterday, I was speaking at an event like last weekend, one of my [00:13:00] friend, I hadn't talked to him about ZipChat. I didn't even know he was in e commerce. It was just starting actually.

He had a new store and I told him, okay, just install ZipChat. You will see the results. You will see the benefits of it. And he was actually struggling generating sales. And yesterday he sent me a screenshot that yesterday made, I mean, it just getting started. So it's a small store. Like you mean like four or five orders out of these before, which were standing at zero or one.

And it was like super enthusiastic, like, Oh my God, that's crazy. I just installed ZipChat and this is the results. I mean, you have an amazing product. So this is the things we are working so hard to make it happen to increase the number of sales, because with rising costs for ads and the span of attention of people are lowering down every year.

That's just what merchants in our opinion yet. 

Claus Lauter: Yeah, funny that you mentioned Optimus as one of your clients. I went before I call. I went to that website and I really challenged your chatbots and to find out how good it is. And I was impressed. So it was really, really good. So there I can vouch for the capabilities of AI working as a personalized [00:14:00] salesperson there.

Now you're on the forefront of AI. Give me a bit of an outlook what you think will happen in 2024. What other features will come in? Where do we head towards to? 

Luca Borreani: What we are doing again, we are developing more features to increase sales. So things like. The lead generation inside the chat. So the ability to create a lead inside Shopify and then using Klaviyo, for example, to create marketing automation for that lead, this will be especially useful for people doing like festivities to create coupons, offer coupons in exchange of leads, this kind of stuff.

Something we are working also is the ability to create upsells. directly from the chat and the ability for the chat to create promotion, depending on the conversation. So feeling free to, depending on the person in front, maybe create bundles and special stuff. Of course, following main guidelines given by the merchants.

It's important that the AI is free to work and convert, but at the same time, not free to, you know, made up prices out of nowhere, because of course it cannot know at the end of the day, unless the merchant [00:15:00] provides this kind of information, what's the cost to the merchant or the shipping or this kind of information.

Something that would be great is, for example, the merchant is buying something and then on the thank you page, the AI from the chat pop ups saying, Oh, you know, customers buying these also buy this, you know, the classic Amazon upseller, cross seller strategy. So, but instead of having it in a passive way on the landing page, having it through like a pop up from the chat that actually goes and engages the customer again.

Which is something we are sure is going to be like a game changer for most merchants because it's something they also requested us. So we try to be really customer feature led. So they tell us what to build. And if we have enough people, enough merchants of a certain size requesting or agreeing that should be our next feature, that's where we focus our development attention.

When it comes to outside ZChat and the iWord, I'm pretty sure like, uh, page builders that completely automate or create the same page through AI, [00:16:00] depending on who is on the page, depending on where he's coming from, he's already interacted with the brand, stuff like that, are going to be like a huge thing in 2024 and 2025.

Mm. 

Claus Lauter: Totally agree. Who's your perfect customer? Are there any specific industries, verticals on these that you work more with than with others? 

Luca Borreani: No, actually, we are pretty spread. We have from like small merchants with one product. I mean, for small merchants, I still mean Merchants and stores that have at least 15 to 20, 000 visitors per month.

I would say that's the minimum where it makes sense to have a tool hour like ours, but it can be like a monoproduct. So it's just using the AI to convert more sales, ask questions or provide the right information about the product or like a huge marketplace. For example, we have a French online pharmacy.

They have, I think, two to 3 million visitors per month. So it's pretty big. They have. I don't know, tens of thousands of SKUs, because of course, in my pharmacy, lots of different products for them just worked wonders because people come, they say the problem they have, and then [00:17:00] they receive a customer recommendation.

Of course, that's kind of products are the ones that you don't need. Uh, I think it's called the receipt from the doctor to buy, you know, you can buy freely, of course, but still it's working wonders. But again, we have like fashion, we have pharmacies, food supplements, technology, car tuning, again, like really spread.

Okay. 

Claus Lauter: Tell me a little bit about your pricing structure. How does that work? So, 

Luca Borreani: we believe every merchant should have access to basically all the features. So, it doesn't really matter how big the merchant is or what kind of subscription is paying to us. We provide them the ability to use all the features and we are usage based.

So, basically, the more you use us, the more you pay. But just because, of AI, it increases as its usage. So, we cannot pay. Afford to, you know, I just make a fixed price, but the idea is to allow everybody to get the most out of ZipChat and to pay as they go with their, depending 

Claus Lauter: on their size. Okay. So as you grow, the pricing [00:18:00] grows, but obviously you get the whole feature set right from the start.

Before we come to the end of the coffee break today, is there anything that you want to share with our listeners that you haven't covered yet? 

Luca Borreani: I've been in e commerce for a while now. What I've always noticed is that the brands and the merchants that actually grow the fastest over time are the ones that are always.

understanding the new trend that can help them convert more. So my, if I can give it as an advice, not just for the chip, but for basically all the AI apps out there, I really believe merchants should definitely take a deep look into AI. Because I will be a game changer for their brands in the next couple of years.

It doesn't matter if it's going to be deep chat or chart related or can be like a page builder or other tools. Again, the eye is going to be a huge breakthrough e commerce in the next few years. 

Claus Lauter: Yeah, I agree. I'm pretty much one year in since stretching PT came out a little bit more than that. And some all the other chat tools that are coming out.

I think they will [00:19:00] rule, whatever you do in your work in your business. If you're not on it right now, you're losing definitely out. Luca, where can people find out more about you 

Luca Borreani: guys? Yeah, just go on zipchat. ai or search for zipchat inside a Shopify app store. They will find us easily. And if they want to connect with me, just go on LinkedIn and Luca Boreani, it's gonna be, I think the first one popping out.

Okay, 

Claus Lauter: I will put the links in the show notes and you're just one click away. Luca, thanks so much to give us an overview about your solution. I think it's a really good tool and I hope that a lot of listeners will check it out. Thanks so much for your time today. Thank 

Luca Borreani: you very much, Klaus. Bye bye. 

Claus Lauter: Hey, Klaus here.

Thanks for joining me on another episode of the eCommerce Coffee Break Podcast. Before you go, I'd like to ask two things from you. First, please help me with the algorithm so I can bring more impactful guests on the show. It will make it also easier for others to discover the podcast. Simply like, comment and subscribe in the app you're using to podcast and even better if you could leave a rating.

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Say goodbye to pressure and meet your new secret weapon, a remote marketing assistant. Easily scale up your business, boost productivity, and reclaim your time. The game changer? Get your own marketing wizard at half the cost. Visit smart ecommerce marketing. com and discover the magic. Check out the link in the show notes now.

Have you heard about PartnerHero? They're experts in support on the e commerce industry, known for their outstanding team building skills. Their main pillars, quality, people, and culture makes them a great fit for your company. Learn more on partnerhero. com or click the link in the show notes.

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