Artificial intelligence (AI) is a software that performs actions with minimal human intervention, or none at all. When translated into business ventures, AI typically means businesses can do more in less time. AI also helps businesses meet the increasingly demanding demands of consumers of the digital age.
Chatbots, for example, can help eCommerce companies provide services 24/7/365, and this is just one application of AI. There are many more that can help drive more sales.
How Does AI Fit into the Ecommerce World?
Today’s eCommerce landscape is becoming increasingly competitive and demanding. Every day more businesses digitize their services and products, more entrepreneurs join the eCommerce arena, and the competition for customers spikes to high degrees.
On the other hand, consumers are becoming more demanding in their requirements. From quick load speeds to instant service, through 1-day and even 3 hours delivery—the consumers of the digital age are search-savvy and want instant gratification.
AI applications in eCommerce used to be too costly for the average eCommerce business. At first, only giants like Amazon had the resources and foresight to integrate AI into their products and services. Today, many AI products are offered at affordable pricing.
AI can be integrated into your system to impact eCommerce sales directly and indirectly. Marketing AI, for example, can be applied directly into your sales channel to introduce hyper-personalization, which ensures consumers see the products they are most likely to purchase.
Alternatively, you can use AI to improve your content marketing processes and indirectly affect sales.
Another major application of AI technology can be seen in the field of robotics in general, and in specific applications in delivery drones.
While delivery drones are used mainly by companies like Amazon, this type of AI application still affects the general eCommerce industry. It creates a ripple effect because every time Amazon introduces service consumers like, they often expect to get the same level of service from other eCommerce companies.
There are many benefits to incorporating AI in eCommerce. Notable benefits include the automation of workflows, which significantly saves time and costs.
You can also use AI to collect consumer feedback and use it to improve your products. AI can also be used to identify ways to increase profits and identify new markets.
When used for analysis purposes, AI can help businesses make better decisions, and continuously optimize their services, improve productivity and reduce costs.
How is AI Improving the Traditional Shopping Experience and eCommerce?
There are various ways to leverage AI to improve the shopping experience. Here are some key techniques:
- Visual Search Engine—enable users to perform single-click searches in eCommerce sites. The results are shown as visual representations of products, which have been proven to be more appealing to consumers. Visual search engines let consumers see details of products, including the dimensions, size, color, and design.
- Provides Personalized Recommendations—AI leverages text, emails, and pop-ups to provide consumers with product recommendations. The software monitors searches performed by users and analyze behaviors to understand consumer preferences. Some algorithms can apply this data to serve consumers hyper-personalized content.
- Voice and Virtual Assistance—AI powers real-time voice assistance, which ensures users can easily interact with brands. eCommerce platforms can integrate popular virtual assistants, like Sire, Google Assistant, and Alexa, into their ecosystem. These technologies can process native languages, interpret customer requests, and understand what consumers want.
- Use of AI in Lead Generation and Sales—AI can extract consumer data, detect purchasing patterns, and then improve lead generation and sales. These processes are often fast, ensuring businesses can act on leads while they are “hot” and relevant.
- Fight Fake Reviews—according to research, 37% of consumers heavily rely on reviews when making a purchasing decision. Reviews are often considered a factor that creates trust in one brand or the other, through what can be seen as a textual “word of mouth” effect. AI can help businesses ensure reviews are made by verified users, reducing the amount of fake reviews.
- Leveraging Predictive Analytics to Improve the Product Offerings—predictive analytics software leverage statistical analysis techniques. These often involve a combination of machine learning (ML) and data mining operations that study data and use it to predict future trends. When applied to eCommerce, predictive analytics can help businesses adapt content offerings according to consumer behaviour. This can significantly reduce overstock of products that are less likely to be purchased.
- Assortment Intelligence—this tool can facilitate 24/7 visibility and provide insights into your competitors’ products and services. This includes details about variables like sizes, versions of products, sizes, and more, providing intelligence into product-mixes and pricing. Armed with this information, eCommerce businesses can better plan their strategies and track the impact of their actions.
Examples of AI in eCommerce
Below are several real life examples showing how AI can be transformational for eCommerce businesses.
Sephora
Sephora is a beauty retailer, which offers its customers an exceptional omnichannel experience. While visiting the physical store, shoppers can access their beauty kit account using a tablet. Using augmented reality technology powered by computer vision algorithms, customers can view a simulation of how different beauty products will look, and add products they like to a virtual wish list.
Burberry
Burberry is one of the UK's oldest designers. It uses new technology to attract audiences and provide excellent customer service online. Burberry created a chatbot that helps customers answer questions, locate products and request items from the latest collections. The chatbot provides insightful, personalized fashion advice, like a real sales representative at a Burberry store.
Read More: 18 Best Chatbot Builders (Ranked and Compared) 2022
Nike
Nike realized that many customers are still searching and exploring when viewing a product page. They used AI algorithms to offer optional, related items, to enable both up-sale and cross-sale. Items are suggested based on automated analysis of the likes and preferences of other, similar customers, and the purchase history of the current customer.
North Face
North Face is also using AI to make personal recommendations. It leveraged IBM Watson's machine learning services to help customers find the right jacket for their next outdoor trip. Buyers are asked questions about the jacket's future use (for example, hiking, biking or skiing) and their planned travel location. It then offers recommended jackets that match their requirements, sorted by best match.
ASOS
ASOS is a fashion eCommerce website, which uses AI to recommend sizes of clothing for customers, by analyzing clothes they bought in the past and did not return.
Returns are inconvenient for retailers and consumers alike. To reduce returns, ASOS analyzes the products and sizes selected by its customers, and uses machine learning algorithms to provide size recommendations. This improves the customer experience, improves customer retention and reduces the cost of processing returns.
eBay
EBay uses AI to help sellers sell more products. It provides inventory and pricing AI solutions, which alert vendors about an inventory gap for specific products, encouraging them to stock up. It also recommends optimal pricing so that vendors can improve the price competitiveness of their products.
The solution is intuitive and fully integrated with the vendor's eBay environment, allowing them to automatically receive recommendations when specific product trends and make changes to their product portfolio as needed.
Conclusion
In the past, only very few companies could leverage the power of AI. In today’s increasingly codeless market, there are many AI products that come ready-made, with no need for coding anything. eCommerce businesses often get to use a user-friendly frontend, while the AI runs in the background, performing various tasks that boost sales and often also reduce work hours.
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