Amazon has debuted Rufus, a new generative AI-powered conversational shopping experience, at the same time that it reported strong earnings for Q4 2023 and the full year. Both announcements highlighted the transformative potential of gen AI, with Amazon planning to lean heavily into the technology in the coming year.
Tapping into Gen AI to Improve Online Shopping
Trained on Amazon’s product catalog as well as information from across the web, Rufus can answer customer questions on a variety of shopping needs and products, provide comparisons and make recommendations, all within a conversational context.
Rufus is currently in beta, so the tool is only available to a small subset of U.S. customers in the Amazon mobile app. However, Rajiv Mehta, VP of Search and Conversational Shopping, and Trishul Chilimbi, VP of Stores Foundational AI at Amazon, said in a blog post that it will begin to roll out progressively to more U.S. customers over the coming weeks.
To use Rufus, customers start typing or speaking their questions into the regular search bar in Amazon’s mobile app. A Rufus chat box will appear at the bottom of their screen. Customers can expand the chat box to see answers to their questions, tap on suggested questions and ask follow-ups.
From broad research at the start of a shopping journey, such as “what to consider when buying running shoes” to comparisons such as “what are the differences between trail and road running shoes?” to more specific questions such as “are these durable?,” the goal of the tool is to meaningfully improve customers’ product searches. Customers can dismiss Rufus at any time and return to their traditional search results by swiping down to send the chat dialog box back to the bottom of their screen.
With Rufus, customers will be able to conduct more general product searches, more easily shop by occasion or purpose, get help comparing products and sifting through reviews for the best recommendations, and ask questions about products that aren’t answered on the product detail page, according to Mehta and Chilimbi. The executives were careful to note, however, that “it’s still early days for generative AI, and the technology won’t always get it exactly right. We will keep improving our AI models and fine-tuning responses to continuously make Rufus more helpful over time.”
Rufus isn’t Amazon’s first application of gen AI technology, and as Mehta and Chilimbi pointed out, more general AI technology has been used expansively by the company for over 25 years to power product recommendations, hone the path of products in fulfillment centers, enable cashierless technology and develop the Alexa assistant. Among the generative AI capabilities that Amazon has recently rolled out include:
“We believe generative AI is going to change virtually all customer experiences that we know,” said Mehta and Chilimbi. “We are excited about the potential of generative AI and will continue testing new features to make it even easier to find and discover, research and buy products in Amazon’s store. We look forward to progressively rolling Rufus out to additional U.S. customers in the coming weeks.”
Looking to Gen AI for Continued Growth
AI also took center stage as Amazon reported its Q4 and full-year 2023 earnings Thursday. Propelled by robust holiday spending, the company reported strong growth in both sales and profits. In Q4 2023 profits reached their highest levels in two years, at $10.6 billion, a huge increase from the $278 million in profit Amazon saw in Q4 2022. Revenue in Q4 rose 14% to $170 billion.
The company saw similarly positive results across 2023, with revenue for the year up 12% from 2022, to $574.8 billion, and profits of $30.4 billion, compared to a loss of $2.7 billion in 2022. The company’s cloud unit, Amazon Web Services (AWS), as well as its advertising business were both strong profit drivers throughout the year, and that can be expected to continue in 2024 as the company rolls out advertising across Prime Video for the first time and expects increased investment in AI to drive more business to AWS.
“Gen AI is and will continue to be an area of pervasive focus and investment across Amazon, primarily because there are few initiatives, if any, that give us the chance to reinvent so many of our customer experiences and processes,” said Jassy on the earnings presentation. “We believe it will ultimately drive tens of billions of dollars of revenue for Amazon over the next several years.”
