E-commerce has been advancing in leaps in the past decade, bringing the seamless shopping experience closer to Internet users. E-commerce powered by AI solutions are redefining how businesses interact with customers and manage their operations. They are available 24/7; you can always study the entire product range without leaving your home; online payment and convenient delivery are available for most users. Due to this added flexibility and convenience, the number of digital buyers has exceeded 2 billion in 2020, with around 25% of the global population shopping online.
The advent and commonplace introduction of artificial intelligence (AI) solutions in e-commerce have also contributed to further expansion of the industry's outreach, mainly due to the improved customer experiences, a greater degree of customization, and improved products and services AI enables. This article explores the major use cases e-commerce businesses can explore in 2020 to advance their operations to a new level.
Benefits of Artificial Intelligence (AI) in E-commerce
The key benefit of AI for e-commerce businesses is its ability to process large volumes of data and learn based on the data input to give better output. Personalized shopping experiences, powered by AI-driven recommendations, are enhancing customer satisfaction and engagement. AI is optimizing inventory management, ensuring products are in stock when customers want them. Smart chatbots, employing AI, provide instant customer support, answering queries promptly and efficiently.
The key areas in which AI promises sizeable improvements for e-commerce operations are:
Product and service offering improvement
E-commerce platform improvement
Customer service advancement through a customer-centric approach
Improved marketing and sales outcomes
Better supply chain management
Service personalization with the help of AI works the best in terms of website personalization and the introduction of advanced recommendation systems. Once clients are offered personalized search solutions, smart product grouping, voice and visual search options, and smart autocomplete features, their search becomes more productive and hassle-free. For a deeper understanding of how AI can power product recommendation engines, read our detailed article on Product Recommendations Engine for E-commerce.
Improvements in product and service offerings are achieved with AI-enhanced pricing optimization technologies, image tagging and recognition, auto-generated product description, and self-checkout systems. Businesses also benefit from introducing conversion rate raise and optimization software and retail analytics, advancing their business-related decision-making. Explore our comprehensive guide on Demand Forecasting and Planning in Retail for more insights.
Website performance can also be transformed with the help of AI, mainly through the introduction of review and forum moderation software, marketplace moderation, AI systems of customer behavior tracking, and better communication channels with chatbots. Effectiveinventory management is vital for reducing costs and improving customer satisfaction.
At the level of customer service advancements, AI can aid with chatbots and voice assistants, visual search options, and customer demand anticipation systems based on smart customer preference tracking and analysis. Discover 5 Reasons Retailers Should Implement AI in Their Business for a broader perspective.
Marketing and sales may reach new heights with the help of AI if the businesses apply AI solutions for lead generation, lead scoring, automated report creation, campaign analytics, and prospective customer identification. AI solutions can help you generate new leads. For instance, the AI solution for Getty.
Mintigo provided an AI solution that helped Getty find more leads via website content analysis and identify cases when companies used images of Getty's competitors.
In terms of security, AI is now a leading source of adaptive, forward-looking cybersecurity solutions keeping sensitive business and customer data intact. AI systems based on machine learning employ smart adaptive algorithms to analyze unstructured data and ensure more precise cyber threat identification. AI is crucial for anomaly detection in large datasets to prevent fraud.
Examples & Use Cases of Artificial Intelligence (AI) in E-Commerce
After considering the general areas of improvement in which e-commerce businesses may apply AI, we proceed to a more in-depth review of concrete use cases. This review can suggest a range of paths for you to enhance business operations by taking them to a new level with AI software and technologies.
AI-powered Product Recommendations for Personalized Shopping Experiences
AI-powered recommendation engines analyze user behavior and preferences to suggest products tailored to individual tastes. These personalized recommendations increase engagement, drive conversions, and create a more enjoyable shopping journey.
By analyzing a customer's browsing and purchase history, AI algorithms curate a selection of products tailored to their preferences. This not only streamlines the shopping process but also introduces customers to items they're likely to love. What sets this technology apart is its adaptability.
As customers explore different product categories, the recommendations adjust in real-time, ensuring relevance at every step. Retail giants like Amazon have harnessed the power of personalized recommendations to drive higher engagement and conversion rates. Studies show that these tailored suggestions can significantly increase sales and customer loyalty.AI-powered recommendation engines continue to evolve, offering more sophisticated features like cross-selling and predicting future purchases. As technology advances, personalized product recommendations are set to become an indispensable tool for e-commerce businesses, enhancing customer satisfaction and boosting revenue.
AI-optimised Logistics for Efficient Supply Chain Management
AI optimizes logistics operations by analyzing data from inventory levels to shipping routes. This streamlines supply chains, reduces delays, and enhances order fulfillment, leading to a happier customer experience and operational efficiency.
Individualized Customer Service
The ease of search is one example of good customer service that clients are looking for today. A good case is that of the voice search offered by Sephora. The overall potential of smart, AI-enhanced voice search for e-commerce companies is immense, with over one-fourth of all mobile users currently using voice search as their primary search option. Moreover, the demand for voice assistants is growing, signaling about greater reliance of customers on voice search.
Visual search is also an innovative feature most forward-looking e-commerce platforms are gradually introducing to attract more clients. The technology found an application in both offline and online retail points. Virtual fitting rooms and visual product search form the cornerstone of the modern customer-centric approach. An excellent example of using this AI technology is the Chinese Moda Polso. Another one, Mi-Ality, is a virtual fitting kiosk installed in many flagship brands' shops in Canada, e.g., Gap, Old Navy, American Eagle, and Levi's, among others. Among e-commerce businesses, SpecSavers was one of the first to offer the virtual try-on feature.
Thus, implementing a handy voice and visual search on your website can boost sales and increase customer satisfaction.
The quality of customer support is another aspect of high-quality, modern customer service. Contemporary e-commerce platforms solve this issue with extensive use of chatbots for automated yet responsive and smart customer support. Today's AI-enhanced chatbots can resemble the human style of conversation and consult customers on a wide variety of issues. Besides, the application of machine learning (ML) in chatbot systems lets them learn from interactions with people, sounding more human-like, and processing more inquiry types with time. Illustrative examples of advanced use of chatbots in their e-commerce operations are Amazon and eBay.
Not all people like talking with chatbots; the latter also do not possess competency and intelligence equal to humans. Thus, at times, customer support can't end with the chatbot's provision of relevant information. To keep track of your clients' needs and see when the chatbot doesn't cope with the task, you can even employ an AI mood tracking technology. One of the first companies to use it was Shop Direct. The technology keeps track of the customer's tone in messages or voice to detect a moment of frustration or irritation. In case such a mood change is detected, the client is immediately redirected to a human customer support representative.
Smart autocomplete is also an illustration of how the e-commerce platform can anticipate the client's needs and queries, thus serving them quicker and better. The global champion of smart, AI-powered autocomplete is Google; its system accumulates the big data from global searches and produces complex analytics on what a user may need based on their (and other people's previous searches). Amazon went one step further and introduced AI-powered product re-ranking based on the users' search. Thus, its product display resulting from an autocomplete search is sorted out to enhance the related items' mutual attractivity. You can read more about the world's most complex ranking AI algorithm, BlueBoard, here.
Product and Service Improvement
AI has made it possible for businesses to improve their product offerings and services in many ways, most of which aim to make the client's experiences better. There are many ways of helping one's customers to choose the right items with the help of AI. For instance, the smart gender targeting and product grouping at ASOS reduce the time an average buyer spends on the website several times. These technologies let the clients see only the products fitting them and allow them to buy ready-made combinations of clothing to use outfits already created for them by ASOS stylists.
Another dimension of client segmentation and AI analytics of customer behavior is the technology of dynamic pricing. Currently available AI solutions for implementing it on e-commerce platforms include SellerActive and FeedVisor, among others. These systems analyze customer behavior on the platform and provide suggestions for flexible price changes throughout the day, week, or even year to capture the seasonal or daily customer activity fluctuations. As a result of such a technology application, retailers can increase both revenues and sales volumes by offering the right things to clients at the right time.
Business Function Improvement
Apart from making customers happier, businesses can utilize AI technology to make their back-end office operations simpler and more affordable. One of the ways in which AL serves the e-commerce business owners' needs is the ability to produce human-like product descriptions. Obviously, such descriptions are still far from those written by human copywriters in terms of cohesion and flow, but imagine a marketplace with thousands, if not millions, of items. Completing descriptions for all of them manually would take years and thousands of dollars, while ML algorithms can do it in days at an affordable price. Some of the best-known AI solutions for content writing include the Adzis content engine and the Ginnie.ai product description generator. A well-known e-commerce company using AI product descriptions is the Chinese Alibaba.
Surprisingly, AI can also help companies address the problem of fake reviews. The review war has become a popular tactic for drowning competitors on Amazon, so the retailer currently exploits this AI feature to delete reviews written by fake customers or chatbots.
Marketing and Sales
AI has proven quite effective in driving the companies' marketing efforts and sales up. Besides the dynamic pricing approach discussed above, companies use AI in many more ways. For instance, AI's predictive analytics leverage historical data, market trends, and external factors to forecast demand accurately. This empowers businesses to optimize inventory, allocate resources efficiently, and proactively respond to changing market dynamics. One of the illustrative examples is the Personali platform applied by JD Sports and resulting in a 332% conversion in one of the brand's campaigns. Another striking example is Amazon's anticipation of customer purchases; it is known that Amazon uses AI to ship products to clients before they place an order on the website. Incredible, isn't it?
Exploring AI Tools and Platforms in E-commerce
Artificial intelligence (AI) is revolutionizing e-commerce at lightning speed. AI-powered tools and platforms are like the secret sauce that can transform how e-commerce businesses operate. They have a bag of tricks that can upgrade everything, from how they chat with customers to how they manage their product supply. Let's dive into the world of AI solutions in e-commerce:
Specific AI Solutions in E-commerce
AI tools are making shopping online easier and businesses run smoother. Let's look at some special AI tools in e-commerce that are changing the game.
BigCommerce for AI-Driven E-commerce:
Imagine having a personal shopping assistant available 24/7 who knows your tastes better than you do. That's what BigCommerce offers. It's an e-commerce platform with AI superpowers. Here's what it can do:
Think of it as your shopping buddy: BigCommerce uses AI to recommend products tailored just for you based on your preferences. It's like having your own personal shopper.
Never run out of stock: With AI in charge, you can ensure that your favorite products are always in stock when you want them. No more "out of stock" disappointments.
Instant help, no waiting: AI-powered chatbots are here to provide quick and efficient customer support. They're available round the clock so that you can get answers to your questions anytime.
The Role of Divante in AI-Enhanced Online Shopping
Now, let's talk about Divante, the mastermind behind some remarkable AI innovations in online shopping. They've been adding a touch of AI magic to the e-commerce experience. Here's a sneak peek into what Divante brings to the table:
These AI tools and platforms are like the wizards of e-commerce, making things smarter, faster, and more personalized. They're not just improving the shopping experience for customers but also helping businesses run smoother in the ever-changing online world. With AI evolving every day, e-commerce has an exciting journey ahead, full of innovation and possibilities.
Real-World Examples of AI in eCommerce
Product Recommendations: Amazon is well-known for its AI-powered product recommendation system. It analyzes the browsing and purchasing history of users to suggest products they are likely to be interested in. This has significantly increased cross-selling and upselling opportunities for the company.
Supply Chain Optimization: Amazon uses AI to optimize its vast supply chain network. Predictive analytics and machine learning algorithms help forecast demand, manage inventory, and even predict when certain products need to be restocked in their warehouses.
Voice Shopping: With the introduction of Amazon Echo and Alexa, Amazon ventured into voice commerce. AI-powered voice assistants make it easier for customers to shop by simply speaking their orders. This demonstrates how AI can enhance the customer experience.
Inventory Management: Zara, a fashion retailer, uses AI to optimize its inventory management. AI algorithms analyze sales data and trends, allowing Zara to produce garments in smaller, more agile batches. This reduces overstocking and ensures that Zara can quickly respond to changing fashion trends.
Personalized Shopping: Zara uses AI to provide a personalized shopping experience for its customers. By analyzing customer preferences and purchase history, Zara can recommend clothing items that are more likely to align with the individual's style.
Virtual Try-On: Zara has also experimented with AI-powered virtual try-on solutions. Customers can use their smartphones to virtually try on clothing items, improving the online shopping experience.
Search and Discovery: Alibaba's eCommerce platforms, like Taobao and Tmall, use AI to enhance search and product discovery. Users can take a photo of an item they like, and the platform's image recognition AI helps them find similar products available for purchase.
Customer Service: Alibaba uses AI-powered chatbots and virtual assistants to handle customer inquiries and provide support 24/7. These bots can assist with common questions and tasks, freeing up human customer service agents for more complex issues.
Dynamic Pricing: eBay employs AI to adjust product prices in real-time based on factors like supply and demand, competitor prices, and historical sales data. This dynamic pricing strategy maximizes revenue and ensures competitiveness.
Fraud Detection: To protect buyers and sellers, eBay utilizes AI to detect fraudulent activities, such as fake listings or suspicious payment transactions. This helps maintain trust in the platform.
Trends and Future Predictions in AI and eCommerce
1. Hyper-Personalization: AI-driven personalization will become even more sophisticated. Future eCommerce platforms will recommend products and tailor every aspect of the shopping experience, from website layout to pricing, to cater to individual preferences and behaviors.
2. Voice Commerce Expansion: Voice assistants like Amazon's Alexa and Google Assistant will be more prominent in eCommerce. Customers will shop and make purchases using voice commands, with AI ensuring a seamless and secure transaction process.
3. Augmented Reality (AR) Shopping: AR will transform the online shopping experience. Customers will be able to try on clothing virtually, visualize furniture in their homes, or even test out cosmetics through AI-powered AR applications, reducing the need for physical stores.
4. Supply Chain Optimization: AI will continue to optimize supply chains. Predictive analytics will help eCommerce businesses anticipate demand fluctuations more accurately, reduce lead times, and enhance inventory management, ultimately reducing costs.
5. Enhanced Customer Service: AI-driven chatbots and virtual assistants will evolve to provide even more sophisticated customer support. Natural language processing (NLP) advancements will enable these bots to handle complex inquiries and disputes, improving customer satisfaction.
6. Fraud Prevention: As online fraud becomes more sophisticated, AI-powered fraud detection systems will become more crucial. Machine learning algorithms will analyze transaction patterns and detect real-time anomalies, safeguarding consumers and businesses.
7. Sustainable Commerce: AI will play a pivotal role in making eCommerce more sustainable. It will help reduce overproduction, optimize shipping routes to minimize carbon footprints, and enable consumers to make eco-conscious choices with ease.
In conclusion, AI's transformative role in eCommerce is set to continue evolving rapidly. Businesses that embrace these trends and stay ahead of the curve will be better positioned to offer innovative and personalized shopping experiences to customers while optimizing their operations for the future. The landscape of eCommerce is poised for exciting changes, and AI will be at the forefront of these transformations.
How to Implement AI in Your Business?
The statistics on AI use in e-commerce are very attractive, pointing at an immense potential value of introducing AI solutions right now to see sizeable gains in the key business metrics very soon. If you're one of those planning the introduction of AI on your e-commerce platform, first decide on the type of technology you need and the aspect of e-commerce operations you wish to address. This may be:
Most businesses come across some initial barriers to AI adoption, mostly including a lack of vision, expertise gaps, bad data, completing technology priorities, a lack of consensus on the path of business transformation with AI, or unclear use cases. Each of these problems can be addressed effectively to jumpstart the use of AI. Universal tips for business owners to overcome the AI adoption bottlenecks include:
Approaching the AI introduction pragmatically
Identifying specific, relevant use cases to follow
Basing the AI introduction process on accurate data
Choosing affordable and robust AI solutions perfectly tailored to their business type, scale, and needs
Looking deeper into the AI concept to learn how it works
Getting Started with AI for Your E-Commerce Business
Embracing AI in your e-commerce strategy can be a game-changer, revolutionizing how you operate and connect with customers. To embark on this journey, first envision a strategy tailored to your unique data insights and business goals. Prioritize AI within your budget, curate the right expertise, and outline actionable projects that align with your vision. Pragmatism is key – choose AI solutions like SaaS offerings that deliver immediate value. And if you're ready to take the leap into AI, consider Datrics as your solution provider. With years of expertise in AI and ML, we offer tailored solutions to elevate your e-commerce business, ensuring you harness the power of AI to its fullest potential.