AI & Machine Learning Strategies in E-Commerce Logistics

Nov 03, 2021

In today’s technology era, artificial intelligence (AI) and machine learning (ML) are powerful tools to help humans in all fields. The role of AI and machine learning in e-commerce is particularly indispensable. But what does AI or ML really mean?

What is Artificial Intelligence?

AI refers to machines that can perform tasks requiring characteristics of human intelligence, such as language, image and sound recognition, planning, learning, and problem-solving. AI can be designed at two scales: Artificial General Intelligence (AGI) and Narrow Artificial Intelligence. AGI is a form of AI that can implement all of the above features, while Narrow AI only focuses on a specific aspect and is the most commonly used form of AI today.

What is Machine Learning?

ML refers to the machine’s ability to learn based on input without being specifically programmed. It works by feeding large amounts of data into algorithms for machine learning. Algorithms are built to assist machines in self-correcting and improving more intelligently.

Servion Global Solutions predicted that 95% of all customer interactions will be dominated by AI by 2025. The global AI market is expected to reach $309.6 billion by 2026, at a Compound Annual Growth Rate (CAGR) of 39.7% during the forecast period. 

So how can AI and ML transform e-commerce logistics? Here are some practical AI and ML applications in e-commerce logistics you can consider for your e-commerce business.

1. Virtual Assistant for Freight Management

Virtual Assistant software can play a huge role in the freight management of e-commerce businesses. An effective Virtual Assistant system can replace redundant human interactions and optimize transactions in the logistics industry.

Fero.Ai is the first company that has launched the Intelligent Virtual Assistant to automate human coordination in freight and logistics globally. The company aims to create smart supply chains operated by AI with the help of experts. 


Source: Fero.Ai

Fero.Ai’s Transport Interactive Assistant (TiA) allows companies to save time by eliminating repetitive tasks such as providing quotes, getting updates and follow-ups on orders, contracts, and invoicing. By automating these processes, companies can free up their human resources to focus on more skilled tasks.

2. Delivery Time Prediction for E-Commerce

One problem that e-commerce businesses often encounter in the logistics process is unreliable delivery time. Accurate delivery time predictions allow businesses to build trust with customers, thereby increasing customer retention. It also avoids complicated tracking updates to save time and effort.

Parcel Perform provides innovative first-of-its-kind logistics services, such as date of arrival predictions with the power of an AI-enabled machine learning engine. This aggregates data to provide e-commerce businesses with real-time predictions and proactive delivery updates upon checkout. As the date of arrival prediction engine improves, it can provide an accuracy of 90% to provide accurate date of arrivals. 

Parcel Perform

Source: Parcel Perform

3. E-Commerce Product Recommendations

Providing personalized product recommendations is an effective way of boosting e-commerce conversion rates, which in turn leads to higher sales for e-commerce businesses. 

BytePlus is a leading tech company that uses machine learning to deliver personalized recommendations tailored to the audience’s preferences. With machine learning technology, BytePlus Recommend offers dynamic and targeted recommendations based on granular customer behaviors. Product recommendations are both a great way to acquire new customers and convert first-time customers into repeat loyal buyers.

4. Chatbots & Automated Customer Support

Another powerful application of AI in e-commerce is AI-powered chatbots. These chatbots are gradually replacing slow and inefficient modes of communication like phone calls or emails. Chatbots and automated customer support have the ability to carry out regular tasks at a specific time, enabling businesses to provide customer support 24/7 at higher efficiencies.

Inbenta assists e-commerce customers with an instant automated support tool powered by AI, which helps e-commerce businesses capture leads at scale with little human interaction. Their advanced AI chatbot provides tailored content and delivers the best response to customers based on personalization and intent identification. 

Automated end-to-end transactions through the chatbot interface help to turn visitors into buyers. This self-serve support solution enables companies to reduce workload and increase efficiency.


Source: Inbenta

5. Product Pricing Optimization

Price is one of the top factors that consumers pay attention to when shopping. Product pricing optimization can help businesses increase sales performance and enhance their advantage over their competitors.

Prisync supports e-commerce companies to improve their competitive edge and profitability by offering pricing software solutions. The intelligent software is able to collect competitors’ pricing and stock data and display them in a single dashboard. It allows businesses to have an overview of the market pricing in order to design an appropriate pricing plan. Prisync also provides re-pricing software to optimize prices dynamically based on market conditions.


Source: Prisync

AI & ML Changing the Game for E-Commerce

The potential of AI & ML technologies in e-commerce logistics is boundless. Apart from increasing business efficiencies, the power of data in AI and ML also empowers e-commerce businesses to make more informed business decisions. In the future, we look forward to witnessing the growth of more AI & ML companies and how they can elevate the customer e-commerce journey.

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