In recent years, the expansion of the eCommerce industry has been stimulated with technological advancements that are paving the way to companies across the globe. More than ever before, platforms are starting to implement advanced tech, especially artificial intelligence, into their operational and strategic initiatives and this doesn’t come as a surprise since eCommerce is an industry that will account for 17.5% of the total global retail sales. Moreover, the industry is projected to record growth at a CAGR of 14.17% between 2020 and 2028.
That said, it’s not unusual to see even more AI applications that can manage, collect, transform, and balance the plethora of data and change the way ecommerce breathes and works. In this article, we will go through the most prominent AI benefits and applications within the industry:
1. Recommending products to customers
Predicting customer behaviour by analyzing petabytes of data and offering relevant product recommendations is another AI application that e-commerce is thriving. For example, Starbucks has launched My Starbucks barista, an app that allows customers to place orders through voice command or messaging. The algorithm analyzes multiple touchpoints, including purchase history, preferences, and contextual information.
Amazon and Netflix also lead the AI pack by recommending products and movies based on user interaction with their website and past experiences (purchases or watched movies). Numerous tools, platforms, and apps on the market utilize AI in order to create better client relations and create more “intelligent” businesses, especially in data-driven businesses such as eCommerce, and that’s a fact that companies need to adopt as soon as possible if they want to gain a competitive advantage.
2. Creating effective sales processes
While cold calling is still part of sales strategies for both small businesses and large enterprises, AI has enabled new opportunities for sales professionals such as enhanced price optimization, forecasting, lead scoring, and automating countless reporting processes. Integrating AI into the CRM has become an indispensable tool for sales reps, managers, and VPs that need to make important decisions on a daily basis, especially in the ecommerce sector, where massive volumes of data are collected each minute. Optimizing sales mechanisms by tracking purchasing patterns and extracting consumer data is possible thanks to modern AI-boosted ecommerce software and solutions.
3. Implementing conversational commerce
Consumer needs are becoming more demanding, and ecommerce companies need to keep up. Instant digital messaging through various channels such as Facebook Messenger, WhatsApp, or Viber, for example, has cleared the path for sophisticated AI solutions such as chatbots. In fact, chatbots can cut operational costs by 30% while some media predict that 85% of customer interaction will be handled without humans by 2021. If brands want to survive, companies need to implement conversational commerce as one of the pillars of modern business strategies, and chatbots are leading the way.
4. Enhancing inventory management
Maintaining the optimal amount of stocks has been challenging for industries across the globe, and ecommerce is not an exception. By monitoring and analyzing data from sales trends, anticipating changes in product demands, and preventing supply-related issues, AI-enabled inventory management has developed an environment for more efficient processes by spotting gaps within the inventory and ensuring all products are delivered on time.
Moreover, automation levels that AI offers to inventory processes will ensure that all sales records, progress through the supply chain and customer updates on the location of the parcel are fully optimized and deliver value both for customers that anticipate products and companies that send them out.
5. Dealing with fake reviews
Fake reviews are becoming an increasingly bigger problem for eCommerce companies, and you’ve probably heard of at least one horror story of a business owner trying to deal with such reviews. Businesses with negative reviews and feedback risk losing a sizable portion of potential customers and fake reviews can have a significant impact. This practice is called astroturfing, and companies such as Amazon use their AI system to fight against it.
The system puts emphasis on verified and helpful reviews and ensures they are boosted in comparison to suspicious activities that they detect. That way, they’re trying to build trust in their brand as well as combat fake grassroots campaigns. Other big brands such as TripAdvisor are also trying to do the same but we all know how difficult that can be, especially in our digital economy where one fake review can cost a business countless of dollars. Google offers means of reporting such practices but companies can be clearly affected even before the review is taken down.
AI applications are growing exponentially. Ecommerce is another industry heavily affected by the opportunities that artificial intelligence brings with each new feature and benefit. Personalized experiences, analysis of millions of interactions, and targeting a specific offer at a specific time would be a tedious and almost impossible task for manual human work. AI technologies are likely to develop even more, and ecommerce is at the forefront of these changes.
Author’s Bio: Sandra Durcevic is a content manager at datapine. Her expertise is focused on business intelligence, data, analytics, and technology while striving to deliver the most knowledgeable and useful information to readers. You can contact the author via email or LinkedIn.