Guest Post: Artificial Intelligence in E-Commerce: What’s Next
E-commerce is one of the biggest industries all across the globe that owns a $2 trillion market, and with AI, this number is expected to increase. AI can assist merchants in developing better strategies and making better future predictions about their growth, customer support, and easy-to-use platform, and retargeting their old yet potential customers.
The e-commerce industry has constantly been evolving, thus changing how people make online purchases. As per a recent report, around 20% of AI investments are rolling into online retail, which looks like the evolution of the e-commerce industry. Merchants are planning to offer every service for their e-commerce store through a virtual buying assistant to guide customers on purchasing the products by providing a personalized customer shopping experience for both the customers and online store owners.
This article will take a thorough peek at the impact of AI, its benefits, and its role in transforming the e-commerce industry. We’ll uncover the roles of AI in the e-commerce industry and how you can implement this technology into your business to expand your business and make an everlasting brand image.
Importance of AI
Machine learning, once limited to the category of scientific research, is now growingly cracking the e-commerce industry as a matchless tool for various businesses. Companies employ AI to acquire better analytical insights, create precise recommendations for users, decrease operating expenses and surpass customers’ expectations by staying ahead of their competitors.
The AI market in retail is expanding speedily; it’s expected that by 2026 it will reach $10.9 billion. AI is not the next big thing, it’s already giant. Microsoft has invested in AI in the recent few years to give advanced experience to users who shop online. Nobody can undermine the role of AI in e-commerce. Amazon is the founder and introducer of AI-powered shopping. More and more brands use powerful AI technology to implement personalized product recommendations and notice outcomes. It’s predicted that 35% of sales generated by Amazon are because of its recommended product features.
Amazon has highlighted the importance of AI in retail much earlier than its other areas. If you are associated with the e-commerce industry, you will know the massive role of AI in expanding it. AI is an outcome of a technological advancement that transforms the customer’s shopping experience.
Role of AI in the E-Commerce industry
There are plenty of tools available for us to know and harness all the information about owning and running a business. Here’s a more structured look into how AI affects the e-commerce industry.
It improves customer experience with personalization features such as voice & visual search, AI-based recommendation, advanced AI chatbots, and smart AI shopping carts.
AI assists merchants in making wise decisions through smart lead generation, customer segmentation, and targeted marketing.
It helps in optimizing processes and automating workflows with advanced analytics.
AI works with IoT to deliver a smart customer experience.
Product warehousing, advanced product forecasting, and supply chain management are some more areas where AI has massive impact.
Increased profit and better ROI are definite; thankfully, because of the implementation of AI in the e-commerce industry.
Top Applications of AI in the E-Commerce industry
We have categorized AI e-commerce implementation case studies into these 5 major categories:
Category: Logistics
Uses: Warehousing, supply chain management
A Domain: Data assessment and analysis
Category: Product Management
Uses: Retail Analytics, Pricing
A Domain: Data analytics, data science, ML
Category: Smart Shopping
Uses: Smart home integration pricing and IoT
A Domain: IoT, Sensors, NLP
Category: Improved eCommerce business, sales, and marketing process
Uses: Targeted marketing and customer segmentation
A Domain: Pattern recognition and data analytics, computer vision, speech recognition, NLP, deep learning (DL), and advanced ML algorithms
Category: Better and personalized customer service
Uses: Recommendation systems and chatbots
A Domain: NLP (Natural language processing)
E-Commerce Logistics
ML and AI-based algorithms can magnify supply chain management and warehousing. AI-powered software employs the sales data to manage, stock, and deliver products. This assists online businesses with time and costs. AI-based warehousing and supply chain is an ideal way to go.
Personalized Customer Services
You must have experienced that Facebook or Instagram have started showing products you were already thinking about. Well, this sorcery belongs to AI. Facebook Marketplace employs strong AI algorithms to automate customized shopping by analyzing preferences through past purchases and customer body types.
There are plenty of cases in the e-commerce industry when the implementation of AI has improved the shopping experience and customer experience. These involve:
AI-based virtual assistants/ smart chatbots – can help customers with quick, smart responses and provide relevant information when needed.
Visual search, voice search, and smart search – did you ever use Siri or Alexa? The future of the e-commerce industry depends upon AI tools such as smart search, voice search, and visual search. These can improve the customer experience and take it to new heights, offering them ease to shop with flexibility.
AI Shopping carts – AI personal assistants and chatbots merged with smart carts. Customers can easily communicate with the AI virtual assistants to fill their carts.
Personalized product recommendations – these systems are super accurate and give customized recommendations based on customers’ previous history, likes, tastes, and requirements. AI-based e-commerce uses image classification and other ML techniques to recommend products.
Improved E-Commerce Business, Sales, and Marketing Process
Improved sales and marketing in the e-commerce business is another prominent role of AI in e-commerce. Let’s have a peek at some of these interesting examples:
Lead generation and identification
Lead generation is one of the toughest tasks for marketers and business management teams. AI-powered lead generation tools can streamline the lead generation process in many ways.
Data analytics and business intelligence
E-commerce businesses have a massive amount of data in their hands. They can utilize this information to expand their business. Modern business intelligence and data analytics tools can help such businesses to find and analyze their KPIs and accomplish their goals.
Targeted marketing and customer segmentation
Such systems assist marketers in understanding and segmenting their customers based on their likes, demands, and behavior. This can decrease the marketing effort, and increase revenues in the long run.
Product management
Merchants can manage the price and execute retail analytics with the help of AI tools. This can be a great assistance in effective and improved product management for your online business.
Smart Shopping — AI & IoT
Now, with the help of the cloud, IoT, and AI technologies, machines can place an order; LG has tried out plenty of previous versions of the InstaView refrigerator that can assist buyers with their shopping orders.
Future of E-Commerce with AI
With the help of AI technology, e-commerce sites can now create a personalized online experience, do orders and purchase management, and collect data from marketing campaigns to run ads. AI software can now use machine learning algorithms to perform budget planning, audience segmentation, social media management, and more. This is the high time for merchants to integrate AI into their e-businesses.
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