How AI Is Changing the E-commerce Space: Lessons from Nick Shackleford

Artificial intelligence is advancing really quickly and it's being used in almost every industry. One area that's having a big impact is e-commerce. AI is making things better in marketing, operations, customer service, and more. One of the entrepreneurs who is leading the way in using new and creative AI tools in e-commerce is Nick Shackelford, the founder of Structured Marketing Agency and the Brez beverage brand.

Nick has been doing profitable Facebook ad campaigns for more than ten years, and now he runs a successful business that sells directly to customers. Because of his experience, he has a special perspective on how AI is changing things. In a recent interview, he talked about how to use AI in e-commerce, the different ways AI is making processes more efficient, helping businesses work better, and giving early adopters a big advantage over their competition.

From humble beginnings to e-commerce empire

Nick's journey didn't follow the usual path. He used to be a professional soccer player in America, but an injury made him rethink his career. He started a partnership selling goalkeeper gloves and set up a basic online store using Shopify. He also took the time to learn about digital marketing, which turned out to be really valuable later on. He was the e-commerce entrepreneur behind the hover board and fidget spinner wave that were popular in the late 2010s.  Now, he runs one of the top Facebook marketing agencies called Structured.

"When I started, I had a feeling that this was going to be something big, but I didn't realize just how big it would become," Nick said.

We have covered an article on Nick in the past, but since then, Structured has grown a lot and now has more than 100 employees working in areas like paid media, creative design, and analytics. Also, Nick's hands-on experience running his own brand, a CBD beverage company called Brez, has given him a unique perspective on using AI to grow a business.

Since its launch a little over a year ago, Brez has made almost $900,000 in revenue. Dealing with the challenges of working in a regulated industry and managing inventory shortages has taught Nick the importance of being efficient, making decisions based on data, and keeping a close eye on finances. These are all areas where AI can be really helpful.

Building an AI strategy for e-commerce operations

When it comes to developing an AI strategy, Nick emphasized the importance of starting with process automation whenever possible. He advised looking at AI as a way to increase revenue rather than just saving costs. By combining human capabilities with AI, businesses can scale their operations while focusing on high-value activities.

At Structured, there are four key areas where AI plays a central role: research, copywriting, creative output, and analytics/insights. Each of these areas can greatly benefit from intelligent data processing and automation.

In terms of research, AI is excellent at analyzing customer feedback, surveys, reviews, and other data to uncover opportunities and pain points. Nick explained that in the past, businesses had to hire data scientists for consulting purposes, but now they can have conversations with the data and build their own stories. Whether it's mining customer conversations, sales figures, or social listening, conversational AI makes scoping projects much more streamlined.

AI is also poised to revolutionize the copywriting game. By feeding large amounts of customer comments, sentiment analysis, and purchase patterns into AI writing assistants, businesses can generate high-converting ad copy at a massive scale.

Gone are the days when brands were limited by team sizes or human resources. With the right AI tools, brands gain unmatched creative power. As Nick put it, "Copy used to be our number one area of concern with large staffs, now one or two people understand how to prompt AI correctly."

On the creative side, AI enables rapid iteration that was previously unimaginable. Platforms like Canva, Midjourney, and Runway allow for quick design tweaks, complex animations, and videos without requiring top-tier design skills.

While some training is still necessary to refine outputs and ensure they align with the brand, AI significantly reduces the time needed to create high-quality creatives for testing, especially when combined with insightful customer and market research.

Lastly, AI brings exceptional analytic capabilities to optimize business decisions. By analyzing real-time customer, sales, and operational data, AI applications offer detailed visibility into metrics such as unit economics, forecasting, and inventory management.

In a challenging economic environment, this predictive power is incredibly valuable. According to Nick, understanding your numbers is crucial and can make or break your business in the coming years.

Putting AI to work across the e-commerce value chain

After establishing the basics, Nick went into detail about how AI can be practically applied to different e-commerce functions. One recurring theme was using AI to automate mundane tasks, which frees up time for more impactful work.

In the crucial area of paid media, AI has transformed Facebook ads from a complex science into easy-to-use campaigns. With features like advantage targeting, automatic placement, and AI-generated creatives, even beginners can run ads that feel simple to manage. However, behind the scenes, machine learning algorithms constantly fine-tune the results based on vast amounts of data. This level of intelligence is impossible for any individual human to achieve.

According to Nick, taking an AI-first approach gives a significant advantage over competitors who are still manually strategizing every aspect of their campaigns. "If you're just starting out, you can achieve a lot more with fewer people."

For customer support, AI virtual agents have the potential to be transformative. Nick mentioned Anthropic's Sienna as an example of a customer experience solution that can autonomously handle common issues. This frees up human agents to handle more complex situations.

AI is also highly applicable when it comes to improving products based on real-time customer feedback.

Tools like ChatGPT serve as valuable creative sounding boards, helping businesses align their messaging with customer sentiments. For Brez, the beverage developer testing dozens of flavors, AI drastically reduces the time needed for formulation.

When designs are ready, generative AI tools like DALL-E, Midjourney, and Runway excel at fulfilling creative briefs on demand. Whether it's basic image editing, complex animations, or even entire website mockups, the quality of AI-generated output has reached a point where human post-processing becomes the main bottleneck, according to Nick.

Integrating with platforms like Canva expands the reach of AI, automating repetitive production tasks such as creating banners and email campaigns. This levels the playing field for individuals or small businesses that may lack design capabilities compared to larger agencies.

Lastly, by analyzing real-time sales figures, customer profiles, and forecasts through AI assistants, previously complex enterprise systems become transparent and predictive. Uncovering nuanced relationships between factors like region and product mix reveals data-driven opportunities.

Finding the right balance between AI and personalization

While talking about the benefits of AI, Nick also warned about its potential drawbacks if not used alongside human judgment. He mentioned that one of the biggest challenges is when agencies or teams don't focus on improving the efficiency of AI decision-making.

From the customer's perspective, relying solely on AI interactions without any human touch can make the experience feel impersonal in the long run. Nick pointed out that in recent years, as people have become more physically and digitally separated, there is a greater need for emotional connections. He mentioned that while some people may prefer AI interactions, there are many who still value human interaction.

To get the best of both worlds, it's important to combine AI automation with human oversight. By implementing AI-first approaches carefully, businesses can benefit from efficiency gains while maintaining the personal touches that make premium experiences stand out. Nick emphasized that even with AI, core aspects of building a brand like creative quality, messaging, and customer focus continue to be crucial. AI can speed up processes and create opportunities for generalists, but human elements still hold significant value.

The future of AI-powered e-commerce

Looking ahead, Nick sees AI driving new growth opportunities in retail channels, personalized experiences, and expanding product portfolios.

Whether businesses partner with direct-to-consumer online platforms or traditional brick-and-mortar stores, AI offers advanced retail capabilities. By analyzing customer behavior and data, AI can go beyond manual workflows to improve forecasting, demand planning, and promotion coordination.

For personalized experiences at a large scale, emerging AI tools can create millions of customized customer journeys. By understanding customers' preferences and shopping patterns, AI can dynamically adapt creatives, offers, and recommendations to resonate with individual customers.

AI can also help businesses test new product lines by analyzing related products and finding their connections across different niches. With AI automating complex research and development processes, brands have more freedom to expand into new formulations, formulas, or categories with less effort.

Nick also predicted the rise of new AI hardware that will enable voice-driven interactions, unlocking even more convenience and scalability. Devices like smart home speakers and mobile interfaces with on-device AI can put control back into the hands of users, offering a new level of utility.

Final thoughts

In wrapping up his ideas, Nick emphasized the importance of maintaining a balanced approach and being open to experimenting with AI. He advised starting with small automation tasks to streamline tedious work before making larger strategic changes. It's crucial to closely monitor the impact of AI and not lose sight of human judgment in the process.

Nick highlighted that even though AI can be powerful, there is still a need for manual testing to refine its output. The last 20-30% of fine-tuning often requires human intervention. By viewing AI as a partner rather than a threat, brands can scale their operations while still delivering the human touch that customers strongly prefer.

For ambitious entrepreneurs, using AI intelligently as one tool among many can provide a competitive advantage in the rapidly evolving world of commerce. Whether it's leveraging AI for marketing or optimizing operations, being an early adopter of AI technology can lead to significant progress. It's important to learn from visionaries like Nick Shackelford and apply their insights to drive success.