How AI is transforming the eCommerce sector? how this fast-growing technology will change the online store
When someone says "artificial intelligence", the first thing that comes to mind is a vision from films like Steven Spielberg's 2001 film AI artificial intelligence, the science fiction thriller Ex Machina or the cult classic Blade Runner from 1982.
But when it comes to the e-commerce sector, it is not about human robotics, but about the learning technologies and algorithms that underlie it.
Artificial intelligence can help today's internet marketers provide optimized customer service on e-commerce websites by using collected business and customer data to make better business decisions and more accurately predict the future.
Let's look at some of the ways in which artificial intelligence and related technologies are driving the e-commerce industry, from improving customer loyalty to optimizing business processes.
Advances in technology and e-commerce
From digital transformation and software as a service to virtual reality and artificial intelligence, technology is pushing the boundaries of what e-commerce can do.
With the development of technology, there is something new every day that competes for the attention of online retailers. You will never find yourself in a lost position to try something new and different-a real challenge-the best eCommerce opportunities for your business.
How AI is changing the e-commerce industry
Artificial intelligence is not just a new technology that is implemented due to the "cool factor"."The adoption of AI can affect a number of business functions in an organization.
To understand how this can affect your business, it helps to understand the components of AI.
The definition of AI is broad and includes data mining, natural language processing and machine learning.
Data mining refers to the collection of current and historical data to inform forecasts.
Natural language processing focuses on Human-Computer Interaction and how computers interpret natural human language.
Machine learning is the use of a set of algorithms to apply past experience or provide examples to solve a problem. Deep learning " is the fusion of algorithms for a better understanding of data.”
In recent years, AI technology has matured and become a powerful tool for increasing sales and optimizing business. Even many small e-commerce companies use technology with some artificial intelligence features.
Benefits of using artificial intelligence in e-commerce businesses
Amazon has long seen the benefits of artificial intelligence and related technologies. Behemoth ecommerce uses machine learning to improve product selection, user experience and optimize logistics.
In a recent publication by McKinsey & Company and the Retail Leaders Association, we listed seven requirements to rethink retail in 2021, and each could be supported in some way by a technology based on artificial intelligence.
1. More targeted marketing and advertising.
Personalization is a priority, but only 15% say they have implemented personalization across channels, according to the surveyed retailers. Stand out from the crowd with a more personalized message and talk to customers individually.
Advances in artificial intelligence and machine learning have enabled deep personalization techniques to customize user content. By analyzing large amounts of data from purchase history and other interactions with customers, you can focus on what your customers really want and deliver the message that resonates the most.
2. Increase customer loyalty.
Providing targeted marketing and advertising messages tailored to your customers can increase profits. McKinsey Omnichannel Personalization studies have shown that omnichannel personalization strategies have the potential to increase sales and retain them by 10 to 15%.
The report says: "a key component of personalization is creating better data and understanding customers, assets that add value throughout the value chain. ... Our research shows that ROI for personalization quickly outweighs ROI for traditional mass marketing.”
3. Hassle-free automation.
The goal of automation is to accomplish the task with minimal human intervention. That could mean anything from scheduling emails in a CRM or marketing tool, using Zapier, automating tasks, or using advanced technology to help with hiring.
In the context of the future trends of e-commerce, some of the most discussed today are robotics and machine learning.
Artificial intelligence can play a huge role in automating repetitive tasks that support the operation of an online store. With artificial intelligence, you can automate things like product recommendations, loyalty discounts, low-level support, and much more.
4. Efficient sales process.
The use of AI can help create a more efficient sales process by collecting customer data, automating additional requests for an abandoned cart, and much more. They can help customers navigate through the funnel and take them to chatbots for easy questions.
Chart Statista Ai
The chart above shows the percentage of consumers engaged in chatbots by industry,and retail already has significant adoption.
Examples of the use of artificial intelligence in e-commerce
There are a lot of use cases for AI in e-commerce, and you're probably familiar with a lot of them-you may not know that the technology they're based on is actually related to AI. Here are the six most common:
• Personalized product recommendations.
• Optimization of prices.
• Improved customer service.
• Customer segmentation.
• Intelligent Logistics.
• Forecast of sales and demand.
1. Personalized product recommendations.
Collecting and processing customer data through online purchases is easier than ever. Artificial intelligence is used to provide personalized product recommendations based on past behavior of customers and similar customers.
Sites that recommend products you might like based on previous purchases use machine learning to analyze your shopping history. Retailers rely on machine learning to collect, analyze, and use data to deliver personalized experiences, execute marketing campaigns, optimize prices, and generate customer information.
Over time, machine learning will require less and less involvement from data analysts in everyday applications in e-commerce businesses.
2. Optimization of prices.
Dynamic pricing based on artificial intelligence is a strategy for changing the price of a product based on supply and demand. With access to relevant data, today's tools can predict when and what you need to loot by dynamically calculating the minimum discount required for the sale.
3. Improved customer service.
Virtual assistants and chatbots allow you to ensure the appearance of a higher level of customer service. While these bots are not fully autonomous, they can simplify simple transactions and keep support agents alive who can focus on more complex issues.
Virtual agents also have the advantage of being available 24/7, so that low-level questions and problems can be resolved at any time of the day without waiting for a client.
4. Customer segmentation.
Having access to more business and customer data and computing power enables e-commerce operators to understand their customers better than ever before and identify new trends.
At insight from Accenture, they wrote: "AI systems can very quickly explore very complex and diverse ways of interacting with customers and continuously optimize their performance when exchanging large amounts of data. This means that marketers can set parameters and allow artificial intelligence to optimize accuracy and learn.”
5. Intelligent Logistics.
According to the report by Emerging Tech Brew, " the predictive capabilities of machine learning in logistics stand out, which helps predict transit times, demand values and delivery delays.”
Intelligent Logistics or intelligent Logistics is the use of real-time information via sensors, RFID tags, etc.to manage inventory and better predict demand. Machine learning systems are getting smarter over time to create better forecasts for your supply chain and logistics capabilities.
6. Forecast of sales and demand.
Especially in the world during and after COVID-19, you want to plan your stocks both in real time and on the basis of historical data. Artificial intelligence can help you with this. A recent McKinsey report suggests that investments in real-time customer analytics will continue to be important in monitoring and responding to changes in consumer demand, which can be used for price optimization or targeted marketing.
How to implement artificial intelligence in e-commerce
It is always tempting to switch to new, exciting technology. But before you start distributing a new program, you need an action plan to make sure that you do not spend a lot of time and money on fake starts.
1. Create a strategy.
You need to start with something-and your strategy will outline the path you need to make to achieve the AI goal. Do not pass this on to a newly hired AI specialist or your CIO or technical manager.
Think about what you want to achieve with artificial intelligence. Take a practical approach and remember to start with something small. You can always build on your successes along the way.
2. Find narrow use cases that are relevant to your company's overall strategy.
The most successful use cases of AI lie in the interface between business goals, data differentiation and easily accessible AI models. To say all this-you should focus on the income opportunity, where you have the advantage of data and in a context suitable for the proven AI technology.
3. Use the knowledge of other companies.
Even if you are an AI seat lover, you need professional help in this regard. Invite the Tiger team to work together on a project or part-time to help you build a strategic AI action plan. These third parties may be helpful in implementing MVP (Minimal viable product).
4. Create a comprehensive solution.
Once you're sure what your team has produced, it's time to create a comprehensive solution. Don't be surprised if it still takes several iterations before it works as you'd expect. As the comfort of work in artificial intelligence increases, you will begin to see a huge benefit from the realized projects.
Finish
Tomorrow'S AI sounds like it's straight from the video, but there are currently many AI technologies that can look less glamorous, improve the customer experience, increase conversion rates, and simplify business management.
If you want to provide the best possible shopping experience on your e-commerce website, take a look at the various benefits of artificial intelligence and machine learning. This can help you make better use of customer and company data to create a future plan that will work.
Artificial intelligence in e-commerce FAQ
What are the components of artificial intelligence?
AI includes data mining, natural language processing and machine learning. Data mining refers to the collection of current and historical data to inform forecasts. Natural language processing focuses on Human-Computer Interaction and how computers interpret natural human language. Machine learning is the use of a set of algorithms to apply past experience or the examples given to solve a problem.
What is Deep Learning?
Deep learning " is the fusion of algorithms for a better understanding of data."It's a branch of machine learning.
What are the benefits of using AI in e-commerce?
The use of AI features can help more accurately target marketing and advertising to ideal customers, increase customer loyalty, introduce seamless backend automation, and find efficiency in sales processes.
SEE MORE
What automation can AI handle in my e-commerce business?
Artificial intelligence can play a huge role in automating repetitive tasks that support the operation of an online store. With artificial intelligence, you can automate things like product recommendations, loyalty discounts, low-level support, and much more.
How does AI generate personalized product recommendations?
Artificial intelligence is used to provide personalized product recommendations based on past behavior of customers and similar customers.
What is a chatbot?
A chatbot is an AI solution for customer service or other applications. By using data and algorithms provided and collected, chatbots provide real-time conversation support without real human intervention.
How does AI support customer segmentation?
Having access to more business and customer data and computing power enables e-commerce operators to understand their customers better than ever before and identify new trends.
How does AI support better logistics processes?
Smart Logistics is the use of real-time information via sensors, RFID tags itp.do inventory management and better demand forecasting. Machine learning systems are getting smarter over time to create better forecasts for your supply chain and logistics capabilities.
How does AI help to better predict demand?
Plan an inventory in real time and based on historical data using artificial intelligence. Real-time customer analytics helps you monitor and respond to changes in customer demand.
How do you know if your AI efforts will succeed?
The most successful use cases of AI lie in the interface between business goals, data differentiation and easily accessible AI models. To say all this-you should focus on the income opportunity, where you have the advantage of data and in a context suitable for the proven AI technology.
Can I implement the AI technology on my e-commerce website myself?
It depends! But with such a complex technique, it is always good to have an expert on the team. Even if you are a lover of artificial intelligence, you should hire a Tiger team on a project or part-time to help you build a strategic artificial intelligence map.
