How will AI impact eCommerce?
Artificial Intelligence is an increasingly hot topic in today’s society – after all, you can’t scroll through LinkedIn for five minutes without stumbling upon an article about AI. And that happens for some good reasons.
This is a technology that has the power to change a lot of aspects in our daily lives, as well as in our business realities. And eCommerce is one of those realities.
So how is AI going to affect eCommerce?
What are the main areas in which it can make a difference?
Well, we’re going to get to the bottom of that in this article.
But let’s get on the same page on some definitions.
What is AI?
Artificial Intelligence (AI) is a technology that is able to perform tasks that normally require human intelligence. Or, in other words, it’s the ability of a machine to imitate intelligent human behaviour.
Some of the tasks consist in visual perception, speech recognition, reasoning, decision-making, among others.
How to apply Artificial Intelligence in eCommerce
There are several types of AI applications in eCommerce. In fact, some websites cite more than 20 different ways in which you can use AI in an online store.
So today we will discuss five of the most impactful ways an online store can use AI to its advantage.
Do you know when you purchase something on Amazon, and the next time you visit this marketplace, you get other product recommendations based on that item? Well, that is due to Amazon’s Artificial Intelligence. In fact, using AI in their business has made Amazon a lot of money.
According to the eCommerce giant, 35% of their revenue comes from cross-selling and up-selling, two sales techniques made possible by the use of AI. But big companies aren’t the only ones who can profit from this practise – AI can also be used in product recommendations for SME.
When an AI system is in place, it will record a customer’s purchase history and previous searches so that afterwards, it can give personalized recommendations to each client, improve a customer overall shopping experience and increase visitor’s retention, which translates into sales.
One of the main reasons that leads to an online purchase in a certain store instead of another is due to the prices the store applies to their items.
But choosing the right prices can be a lengthy and difficult task because of the several factors that a store needs to consider to stay competitive – and this is where AI can come to play.
Measuring different essential aspects in pricing, like competitors prices’, seasonality, among others, AI can optimize prices for each product based on date and time, customer geographic location and market demand at the moment.
One of the most discussed AI applications in eCommerce is its use in Chatbots.
A chatbot can be defined as form of technology designed to simplify interactions between humans and computers.
However, before AI came into the picture, chatbots were programmed to have stock answers to consumers’ questions, and when the conversation went off script, these pre-AI, rules-based chatbots didn’t respond so well – or at all. But like we said, that was before AI.
Now, through deep learning and natural language processing (NLP), AI chatbots can understand and respond to human input through spoken or written language. And so, with the addition of Artificial Intelligence to this technology, conversations become more natural and human-like, problems and needs were taken care of more quickly, and customer support became much more efficient.
Communicating with your clients through email is a great way to build a relationship with them – after all, 70% of consumers prefers to be contacted through this channel.
So what would happen if email marketing took a step forward? Well, through AI it has.
As we mentioned previously in this article, AI records a customers’ search and purchase record, which means it harnesses very useful and particular data about a clients’ likes and dislikes.
Thus, with this data, companies can create more targeted and customized email campaigns for its clients, making their emails more human, rather than automated, with content that appeals more to the client, in a time where the client is more likely to read it. Or, in other words, AI improves the effectiveness of an email marketing campaign.
And lastly, one of the main areas AI can help eCommerce businesses is in their security systems. By incorporating AI and its deep learning ability into security solutions, online stores can spot users that don’t ‘fit in’ in network traffic, and warn companies about an attempted intrusion as soon as possible.
And, although companies need more than AI to actively protect them from threats, such as conventional security protocols and algorithms, Artificial Intelligence can be a key technology in avoiding potential breaches and in fixing these breaches faster and more efficiently.
Conclusion: How will AI play out in the upcoming times?
Nowadays AI is one of the most discussed technologies, and although AI is already being used for a couple of years by major companies, newer companies are also starting to bet on this technology.
And it’s not just that. It’s not only eCommerce that is starting to explore it, but other fields of business as well. Which can lead to faster developments in the technology, and even other applications for eCommerce that are yet to be discovered.
So we just know for certain that we are curious to see until how far this technology can go, and to discover all its uses in eCommerce.