The integration of artificial intelligence (AI) and increasingly sophisticated video technologies that deliver content to a broad array of devices is rapidly transforming the e-commerce landscape. As e-commerce continues its transition from static, desktop-based applications to dynamic, mobile and video-based platforms, AI's ability to analyze and understand content and how people interact with it is becoming increasingly valuable.

The shift to video-based e-commerce, driven by social media platforms like Meta, X/Twitter, TikTok, Pinterest and Instagram, today allows consumers to engage with products in more interactive and immersive ways. This includes demonstrating product features, usage and experiences in increasingly immersive formats to help shoppers make better-informed purchasing decisions.

We sat down with Serhad Doken, Chief Technology Officer at Adeia, whose patented innovations enhance billions of devices and shape the way the world explores and experiences entertainment, to learn more about the technologies that will shape how we shop online. Here is what he had to say:

Q: How has the e-commerce ecosystem evolved over the past few years?

Serhad Doken: One of the most significant factors in the evolution of e-commerce in recent years has been the rise of new intelligent, immersive video technologies that deliver compelling content experiences to viewers, opening the door to commercial activity. 

Indeed, there is a growing body of evidence that highlights the power of video in e-commerce. According to Wyzowl's research, 51% of people are more likely to share a video with their friends or followers than any other type of content. Adding online videos to your social media posts can help increase their reach. 

Video in social media posts generates higher engagement rates than text and image content combined, again according to Wyzowl. This is why online content heavily features videos, including user-generated influencer content and brand websites.

Q: Who are the key players in the e-commerce ecosystem?

Doken: The landscape has changed tremendously. We have come a long way since companies like QVC dominated the "video-commerce" market. 

The gradual decline of linear TV, triggered by the rise of over-the-top, or OTT, streaming services and the rapid emergence of social media, has shifted the focus from getting views, likes and comments (engagement) to pushing consumers directly into the sales funnel. In other words, video plays a big, if not the biggest, role in converting engagement into sales.

To convert engagement into sales requires the removal of as much friction from the customer journey as possible. Not only must it be easy and seamless to view and engage with images of the product, but technologies must be in place to enable the actual sale. These include systems that can securely process payments, manage customer and product data, protect data, enforce privacy controls, manage inventory, fulfill warehouse orders, and promote and advertise products.

Another aspect of successful e-commerce revolves around access to first-party data. The more information a company "owns" about its customers, the better it can serve them. This is especially important with the looming "cookie apocalypse", the phase-out of third-party cookies by major web browsers due to privacy concerns and regulations. 

This shift forces the advertising industry to pursue first-party data strategies, contextual advertising and new technologies, including intelligent video. A robust, personalized customer data strategy that effectively and ethically prepares customers for purchases is rapidly evolving from a competitive differentiator to a competitive requirement.

Collecting, mining and harnessing very complex and personalized data will define the winners and losers of e-commerce platforms. Since you cannot collect information from people who do not engage, video emerges as a strategic imperative for e-commerce. 

Q: What should the industry do to manage privacy and security in an increasingly connected e-commerce environment?

Doken: Security and privacy are critical considerations. Anonymization is one way to solve that problem while still being able to include profiling data. Understanding when to enable it and how to collect data without missing out on specific personalization and recommendations is crucial. Ultimately, it boils down to proactively providing consumers with additional security and privacy tools to measure, manage and control their information. 

Proactive disclaimers or notices will also be helpful. Sales enablement can be implemented automatically when customers opt in, but for people who haven't opted in, a simple pop-up when they click on an item that offers recommendations can jump-start the sales funnel management process. 

It is important to remember not to treat everybody the same way. Consumer awareness and concerns differ significantly for many reasons. Attitudes also shift generationally. Studies have shown that some older consumers can be extremely concerned about privacy, whereas younger generations seem less concerned. 

Either way, security and privacy should be viewed as one more layer of information to personalize the customer journey and increase sales. 

Q: What role will AI play in data collection and customer experiences?

Doken: It is impossible to overstate the impact of AI on e-commerce. Besides fundamentally changing how people interact with the technologies they use for entertainment and commercial activity, AI transforms back-office operations, breaking down media content into smaller pieces. AI classification algorithms can also very quickly and efficiently identify product themes and opportunities as well as tie-in opportunities. 

By adding further classifications, AI demonstrates a remarkable ability to engage in accurate predictive analytics, which marketers can harness to further optimize e-commerce channels.

Most of these AI processes today take place in the cloud, where they can be scaled. Amazon, for instance, serves and supports millions of consumers all over the world on its cloud platforms. They can engage in very surgical classification, prediction and recommendations and tailor offerings that meet the specific needs of each person. 

That said, speed in all its forms is an increasingly important variable. Consumers are impatient. Many marketers have concluded that waiting for data to be computed and modeled in the cloud can take too much time and add too much latency to be a sustainable option. 

For those who need transactions to occur in real time, the best option may be to process as much of the experience as possible at the edge, where customers physically engage with their devices. The move to the edge is the next frontier to further leverage, integrate and optimize video, AI and e-commerce. 

While operating effectively at the edge is computationally intensive, it has become increasingly clear that it is the most effective "place" to preserve and enhance the intimate connection between product or service providers and consumers. 

Q: How will the industry address the "computational intensity" that you describe?

Doken: The adoption of video-based e-commerce at the edge will place a much greater burden on existing semiconductor infrastructure. As the volume of e-commerce transactions increases and video platforms expand to include connected TVs, mobile phones, tablets and computers, we'll need faster processing and more advanced semiconductor technology. 

There are also implications for deploying advanced chipsets to support dramatic surges in network traffic and cloud-based repositories. It will be essential for service providers, for instance, to intelligently manage video through the network. As the industry recognizes this trend, the critical role of next-generation semiconductors in handling the exponential increase in traffic and network capacity will become clear. On top of all this are the growing computational resource requirements for AI applications.  

Q: How is Adeia supporting the emerging AI-based video e-commerce trend?

Doken: The state of the art has evolved tremendously. Today, a growing number of e-commerce services leverage Adeia's intellectual property to embed metadata and trigger access to sophisticated e-commerce infrastructures that integrate the entire supply chain to platforms, mobile apps and websites that carry intelligent video content.

In addition, there will be a surge in demand for semiconductor technologies that leverage Adeia innovations like hybrid bonding in data centers, network infrastructures, end-user devices and beyond. 

Adeia specializes in video technologies that align perfectly with the trajectory of current e-commerce trends. We are uniquely positioned to drive this change forward.

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