Gone are the days when the mere transition from brick and mortar into an ecommerce store was regarded as a major change in the business model. The influx of new technologies has completely transformed the traditional shopping experience.
The latest of these game-changing technologies is Artificial Intelligence (AI) – the flavour of the year.
The technology has been rightly praised by everyone from store owners to customers. In the context of integrating AI with ecommerce, the applications range from the ability of analyzing data sets, identifying patterns and creating personalized experience way more efficiently than any human being. A number of companies are already using the various implementation of the AI concepts with the ultimate aim to growing business. AI is gradually penetrating the everyday business processes of ecommerce stores with high prediction for increase in store revenues.
“Artificial intelligence would be the ultimate version of Google. The ultimate search engine that would understand everything on the web,” Larry Page, CEO of Alphabet.
The Partnership of Artificial Intelligence and Ecommerce
Despite all the hype, a paradox arises. Is AI even worth venturing into, and irrespective of its feasibility, does it really have to be implemented at your ecommerce store right now?
Well, if you are, by any means, associated with the ecommerce business, you are advised to pay close attention.
The combination of AI and ecommerce presents endless possibilities. However, if you’re confused (and I’m sure you are) about the prospects of AI, the extent to which it could help your brand resonate with the customers and its adoption, don’t worry. These are genuine concerns and I aim to address them in this article.
According to a research by Accenture, AI could potentially boost profitability rates by an average of 38% across 16 industries by 2035.
AI will particularly benefit the retail sector because of it’s immediate impact on two fundamental areas that have serious impact in retail ecommerce : creating a very personalized shopping experience and making smart business decisions.
Personalization: It’s More Than Just Knowing the Name of Your Customer
No matter how good your marketing tactics and outreach are, there is always room for improvement. The more you get personal with your customer, the better. And with vast data you collect in the bargain, you can get off on the right foot.
AI-Assisted Product Recommendation
Retailers are able to use Big Data (the collection and compilation of data from different channels, previous transactions and other activities) to determine the trends in the shopping habits. This analysis could be used for personalized product recommendation.
AI not only showcases highly personalized products better, it also assesses customer behavior and provides sophisticated predictions about what a customer really wants. This is actively used to better the predictions for future purchases and design customized sales strategy based on customer behavior trends.
How Can You Make This Possible?
Though this aspect of ecommerce marketing isn’t completely unknown, . Collaborative Filtering that uses previous history and general patterns is used by many ecommerce stores. AI enhances this approach by analyzing a huge volume of information, and coupled with deep learning allows for robust personalization.
Using AIs like IBM’s Watson, you have a platform that provides insights by analysing customer behaviour. Amazon is already using several AI technologies to curate recommendations for customers. This recommendations engine is driven by machine learning (ML).
Advanced Semantic-Based Search
When we talk about personalization in the context of ecommerce and customer support, right now there is nothing better than intelligent customer engagement at every point of contact.
One of the most important aspect of personalization is the Search Result. With advanced semantic-based site search, customers are able to easily navigate the store and find the relevant product without wading through a lot of unnecessary results . AI is now able to understand natural language and clearly (and correctly) interprets the human semantic, generating the most relevant results.
How Can You Improve Your Search Results?
Using AI, you can use machine-learning algorithm that has the ability to learn to decipher a customer’s request. This in turn reveals the true intention of a query and delivers search results that are based on relevance.
eBay claims to be on the forefront of practical machine learning research and is working closely to improve user experience and product search. Innovations like Microsoft Cortana also make it easier for people to conduct searches and discover products that best fit the intention of the query rather than just the words.
Chatbots & Virtual Assistants
Chatbots might just be the ultimate solution for the customer support woes. The good news is that modern chatbots (powered by AI) are able to interface with customer databases and extract the details of a customer and responds in the most appropriate and personalized way in real-time.
To compliment this implementation of AI, we also have Virtual Shopping Assistants, creating a more efficient sales process. These assistants can communicate with customers using different languages and help in curating the customer’s preferences. Customers can now use natural conversation creating a new interactive and intuitive online shopping experience. The North Face has built a digital personal shopper that helps customers find particular articles of clothing by asking IBM’s Watson platform questions.
How Can You Get a Hold of These Technologies?
Implementing a chatbot is not really that expensive. Whether you’re a store owner or a developer for an ecommerce store, you can easily build, deploy and optimize chatbots for your ecommerce store using readily available frameworks. IBM’s Watson, Microsoft Bot Framework, Chatfuel and Octane AI help you achieve this goal without breaking the bank.
Efficient Company-Wide Decision Making
AI is not science fiction anymore. It is now developed enough to integrate directly within different aspects of ecommerce operations from pricing to assortment management. Using Big Data, retailers can make informed decisions based on valuable insights provided by AI tools.
Pricing and Inventory Management
Pricing products is no more a guess work. AI can use complex learning algorithms that assess market dynamics and all the other relevant factors of market competition. Optimal pricing of the merchandise helps a business stay relevant and ultimately succeed in a competitive environment. Similarly, AI takes the bull by its horns and allows for an efficient inventory and assortment management. This is only achieved when a huge volume of data is effectively and rapidly analysed to generate actionable insights that could be put to action immediately.
Putting all the data to use, you can also determine the kinds of products and business actions that have decreased efficiency, increased conversions, and if anything needs readjustments. These comparisons pertain to market share, pricing patterns and overall progress of a business.
All these informed decisions come on the back of an efficient analysis that is only made possible by big data.
How Can You Use AI to Make Smart Business Decisions?
With advanced algorithms, you can use AI to forecast demand, velocity of orders and plan inventory management using various factors including past performances of products. At the same time, all the gathered data can be used to compare and contrast the aspects of your business with the peers in the market. Even Coca Cola is venturing into Artificial Intelligence for inventory management and venturing into big data to drive success.
What Does the Future Have in Store for Ecommerce?
So is it too early to even think about it?
Well, it’s time for the already digitized ecommerce business to get smarter and predict trends. And the technologies behind AI might just be the way forward. AI could help the ecommerce industry in identifying the gaps and what needs be done in order to enhance the customer experience.
According to report by Narrative Science, it is predicted that 62% of the enterprises will use AI technologies by 2018.
Some might say that hype around AI might have created a bandwagon effect in the digital space, but ignoring it completely can do no good. There might be some hesitation over the economic sustainability of AI applications right now. But once the use of AI becomes a common practice, it will no longer be an option, but a necessity.
The game is definitely worth the candle.