Move Now or Fall Behind: How Generative AI Will Redefine bol’s Competitive Edge
As e-commerce giants such as Amazon and Zalando are capturing more and more market share in the Netherlands, both also recently integrated GenAI into their shopping assistants. Although Amazon has not yet deployed its shopping assistant, Rufus, in the Benelux, it will only be a matter of time. Then there is bol, the market leader in the e-commerce market in the Benelux. It has been seemingly untouchable in this position, but if bol does not keep up with these trends, things could change. Where its sister company, Albert Heijn, uses GenAI already in its app through things such as creating recipes based on what you have in your refrigerator. Bol’s GenAI usage is quite limited at the moment. Its chatbot for customer services is the closest thing to innovation in this regard, but it is still quite static and not a real conversational shopping assistant as its competitors. That is where the proposal to integrate a GenAI- powered shopping assistant into bol’s platforms comes into play.
The GenAI-powered shopping assistant improves the customer experience by offering extensive support to buying decisions, by offering four separate interfaces for targeted AI support. Data driven and contextual guidance on product evaluations enhances product discovery, eases stress and decision fatigue, and limits the need for customer support. Advertising the AI assistant on the first page of the website, makes visitors aware of the tool at first glance. For first timers, it can help in navigating the abundant product offerings.
Due to network effects an increased number of shoppers and higher retention makes bol a more attractive platform for sellers, given the sales opportunities reached through bol. This platform effect describes the added value to buyers and sellers and, effectively, bol (Eisenmann et al. 2006).
Besides these benefits, the business case is attractive as well. Based on industry research by Bain & Company and McKinsey & Company, revenue can be increased significantly by 5 to 10 percent (Vu et al., 2024; Sukharevsky et al., 2024). In addition, conversation rates can be increased by 7% or more as well as basket uplift of 2 to 4 percent (Vu et al., 2024; Sukharevsky et al., 2024). With regard to ROI, the extra revenue generated can be 24 times the investment required (Vu et al., 2024). Especially as the costs of LLM API usage is expected to decrease considerably, with estimates mentioning an 80% drop in the coming years (Sukharevsky et al., 2024).
All in all, the proposal to integrate a GenAI-powered shopping assistant into bol’s platform will result in great benefits to both the customer and company. The integration will enhance personalization, improve operational efficiency and reinforce the ecosystem effects between customers and sellers. If done well, bol can turn this integration into a scalable model for further innovation across the organization and expand its competitive advantage in the Benelux market.
Authors are the members of Information Strategy Team 33
References:
Vu, M., & Keely, L. (2024). Retail and Gen AI: Now scale those terrific early returns. Bain & Company. https://www.bain.com/insights/retail-and-gen-ai-now-scale-those-terrific-early-returns/
Sukharevsky, A., Agrawal, N., Bhatia, A., & Tandon, A. (2024, July 17). LLM to ROI: How to scale GenAI in retail. McKinsey & Company. https://www.mckinsey.com/industries/retail/our-insights/llm-to-roi-how-to-scale-gen-ai-in-retail
Eisenmann, T., Parker, G., and Van Alstyne, M.W. (2006). Strategies for two-sided markets. Harvard Business Review 84(10) 92-101.
