Wayfair and Google Cloud recently announced an expanded partnership to significantly enhance the online retailer’s product catalog with Google’s advanced Gemini models on Vertex AI and to improve employee collaboration by deploying Google Workspace to its thousands of employees worldwide. By using Google’s AI technologies, Wayfair has already seen improvements in workforce efficiency and operational cost savings.
“At Wayfair, we believe gen AI is the key to unlocking the next generation of retail experiences,” said Fiona Tan, Chief Technology Officer at Wayfair. “With Google Cloud, we’ve been able to efficiently scale and enrich our product catalogs, enabling us to support a more seamless and engaging shopping experience for our customers.”
In the fast-paced world of e-commerce, surfacing the right products at the right time is crucial. Wayfair is already seeing results from its use of Gemini on Google Cloud, which currently serves customers in more than 200 countries, including:
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- Faster Time-to-Market: Instead of manually tagging each new product across its 30 million product portfolio, Wayfair is using Gemini on Google Cloud to automatically categorize products, reducing the time needed to curate new and update existing product listings by 67%.
- Significant Cost Savings: By removing the tedious process of manually tagging attributes like color and style, Wayfair estimates it will drive hundreds of thousands in cost savings per year.
- Better Listing Quality: Gemini’s ability to analyze images opened up new possibilities for Wayfair, such as automatically catching errors in product dimensions listed in the catalog, leading to better customer satisfaction.
- Improved Customer Experience: Increasing the accuracy of product attributes like color and subject, and improving the coverage of these attribute tags in the catalog, improved conversion rates when customers use these filters by ~2%.
- More Responsible Content Management: With Gemini, Wayfair now has a scalable, AI-augmented process for identifying and flagging inappropriate materials.
In addition to catalog enrichment, Wayfair is also leveraging Gemini for Google Workspace, which boasts more than 3 billion users and over 10 million paying customers, to improve the productivity of employees and create better experiences for them. Wayfair has had success using Gemini in Gmail, Google Docs, and more to help employees streamline and collaborate on tasks like drafting and responding to emails, summarizing and proofreading documents, building presentation templates, and more. Wayfair is also finding success using Gems, which are customized versions of Gemini to help with tasks or get deep expertise in new areas. With Gemini for Workspace and Gems, Wayfair has seen a boost to employee productivity, enhanced collaboration, and improvements in creativity across the organization.
“Wayfair is redefining what’s possible in retail with Google Cloud’s generative AI,” said Matt Renner, President, Global Revenue at Google Cloud. “By harnessing the power of Gemini and Google Workspace, Wayfair is not only automating complex tasks and boosting employee collaboration, but also creating more personalized and engaging experiences for every shopper. This is a prime example of how AI can transform businesses and deliver tangible benefits to customers and employees.”
What this means for ERP Insiders
GenAI to become e-commerce standard by 2027. GenAI in online retail is accelerating, with projections indicating that by the end of this year, 2025, 84% of e-commerce businesses will have integrated AI into their operations. Retailers are utilizing GenAI to offer tailored product recommendations, virtual try-ons, and AI-informed suggestions, significantly improving customer engagement and satisfaction. AI tools are also automating the creation of product descriptions, marketing materials, and social media content, ensuring consistency and reducing manual workload. AI-powered chatbots and virtual assistants are providing instant responses to customer inquiries, enhancing service efficiency and availability. Given the rapid advancements and the competitive advantages offered by GenAI, it is anticipated that by 2027, GenAI functionalities will become standard in e-commerce platforms worldwide. That said, some challenges loom, such as ensuring customer data is handled securely and in compliance with regulations is paramount. Building trust in AI-driven interactions requires transparency and consistent positive experiences. While AI implementation can be resource-intensive, the long-term benefits often justify the investment.
Integrate AI-enabled e-commerce platforms with ERP. Integrating AI-enabled e-commerce platforms with ERP systems is critical for online retailers to enhance automation, personalization, and operational efficiency. If available, use pre-built ERP connectors offered by platforms like Shopify, Magento, or BigCommerce. Use RESTful or GraphQL APIs to facilitate seamless communication between AI-enabled e-commerce platforms and ERP systems. And leverage integration platforms like MuleSoft, Zapier, Dell Boomi, or Celigo to simplify connectivity. Enable bidirectional data flow between ERP and e-commerce systems for inventory levels (avoid overselling and stockouts); product catalog updates (pricing, descriptions, AI-generated product recommendations); and customer orders (seamless order fulfillment and tracking). And implement webhooks or event-driven architecture to keep data up-to-date in real-time. Integrate AI chatbots (e.g., ChatGPT, Amazon Bedrock AI) with the ERP system to provide real-time order status, return processing, and support. Also, enable AI-powered product recommendations based on ERP-driven purchase history and real-time browsing behavior. And use AI to generate dynamic pricing by analyzing ERP-driven inventory levels and demand fluctuations.
Online retailers should prioritize deployment of GenAI functionalities based on ROI potential. Retailers like Wayfair would be well served to focus first on high priority, immediate ROI capabilities like AI-Powered Product Recommendations, AI Chatbots and Virtual Assistants, and AI-Generated Content and SEO Optimization. Next should be medium priority features that drive profit and cost efficiency like AI-Driven Dynamic Pricing, AI Fraud Detection, and AI Inventory and Supply Chain Optimization. Finally, retailers should look at lower priority features with longer-term payoffs, like AI-Powered Visual Search and Virtual Try-On. As an example, AI-powered product recommendations have an ROI potential of 10-30% increase in conversion rates, with a revenue impact of $3-$5 return per $1 invested. Amazon, the world’s second-largest retailer, currently attributes 35% of sales to AI-driven recommendations. AI-Driven Chatbots and Virtual Assistants have a potential ROI of 30-50% reduction in customer service costs and efficiency gains in the form of 24/7 automation of 60-80% of inquiries. And AI-Generated Product Descriptions and Content Creation have a potential ROI of 20-40% reduction in content creation costs and a 5-15% increase in organic online traffic.
