With advances in technology and data handling capacity, artificial intelligence has been gaining ground and creating an impact in virtually every industry. This includes the eCommerce sector. In other areas, artificial intelligence has been streamlining business processes, improving the customer experience, and carrying out often highly innovative tasks with great speed and efficiency.
What is Artificial Intelligence?
Artificial intelligence or AI is an umbrella term for a branch of computer science that brings together multiple strands to create machines and systems capable of processing information and performing actions in a manner similar to the way human beings do.
While long-term planners envision a future for AI where such technologies can act in enhanced and autonomous ways that exceed human behavior capacities — a condition known as artificial general intelligence (AGI) or strong AI — we’re still some ways off from this level of development.
For the moment, the artificial intelligence we have is of the weak or narrow variety, consisting of AI systems and tools created to perform a specific task or limited range of tasks extremely well. A large portion of this current AI level depends on a sub-branch of artificial intelligence called machine learning.
What is Machine Learning?
Machine learning or ML consists of a range of techniques and mechanisms that enable machines to improve their performance and aptitude for specified jobs — effectively, to learn — through the intake and processing of data.
Machine learning systems analyze this data and identify patterns within it, using these findings to apply the new knowledge they extract and modify their behavior. Complex mathematical procedures known as algorithms spell out precisely what the systems should do to meet their design parameters in great and minute detail.
Machine learning is one of the major applications of artificial intelligence in eCommerce that enables organizations to run their businesses more efficiently and profitably.
Artificial Intelligence in eCommerce
In the eCommerce industry, artificial intelligence and machine learning applications disrupt traditional operations and create new opportunities in fields ranging from the creation of personalized shopping experiences to the streamlining of inventory management and logistical processes. Here are some of the areas where AI and ML are creating the most impact.
AI in eCommerce: Improving Product Search and Recommendations
When customers search for a product or service, they expect the results to match their intention or desire as close as possible. Machine learning systems for eCommerce expand the search options available by incorporating a broad set of synonyms and adjectives that consumers commonly use.
Many systems can learn about an organization’s particular range of products over time, identify products that were viewed by similar audiences, and make suggestions relevant to the underlying intent of a search.
Tools like visual search (where a buyer can take a photo of something that interests them, and have an AI search engine look for matches) are further expanding the range of search options for consumers. A growing number of third-party developers and online resources are making these tools available to organizations of all sizes.
Personalizing the Customer Experience
Establishing a base of consumers who feel that their interactions with your brand are uniquely tailored for them can be the key to acquiring more leads, converting more first sales, and establishing long-lasting relationships and loyalty.
By analyzing past transactions, current activities, and behavior, artificial intelligence, and machine learning tools can be trained to predict what people will do when they receive a specific offer, see a particular product, or have a particular experience with your brand. They can also adapt, creating alternate methods for reaching out to people with different preferences.
Providing Virtual and Conversational Assistance
Voice-to-text and conversational interface technologies are the foundation for popular consumer-level platforms like Apple’s Siri or Amazon Alexa, which take much of the legwork out of getting through each day. The eCommerce industry is also taking advantage of these developments to enhance interactions with consumers and reduce their human staff’s workload.
Virtual assistants and chatbots are enabling consumers to get quick and accurate responses to their questions and searches. Machine learning and AI enable these systems to learn about a person or subject, using their interactions with people to refine their performance and output over time.
Many organizations use online chatbots for customer service and technical support delivery, with some systems having the ability to predict their customers’ next questions or needs.
Optimizing Customer Fulfillment Options
AI-powered tools for eCommerce can help organizations and their customers pick the best shipping and fulfillment options for each transaction, automatically testing different solutions to find the cheapest and quickest methods for getting goods and services to consumers.
Fulfillment tools can also track deliveries in real-time, issuing updates and status reports, and keeping track of which customers prefer what kind of notification and messaging frequency.
AI in eCommerce: Managing Inventory
Inventory management tools with machine learning intelligence can analyze current inventory levels and historical data to help predict sales and inventory usage across a year. They can also track expenditure and retention levels and help organizations to set inventory levels based on demand forecasts.
Beyond inventory management, AI is also enabling warehouse management by developing automated robots that can store or retrieve stock and dispatch items around the clock.
The supply chain and customer sales aspects of eCommerce present ample opportunities for fraudulent practices, such as bad credit card transactions and account takeovers.
Machine learning tools for eCommerce can review all transactions, making predictions based on the most likely cases of malpractice, and looking at larger patterns and broader trends than a human fraud prevention team. Systems can also learn and adapt, updating themselves, and improving their performance over time.
Detecting Business Trends and Patterns
Detecting and recognizing patterns or trends are central to the activity of AI and ML tools. Services for eCommerce can output business data and run secondary analysis to reveal underlying trends and relevant insights.
AI-based data analytics tools for the eCommerce sector can provide a host of benefits such as business intelligence, customer profiles, and online sales analysis.
Benefits of Artificial Intelligence in eCommerce
Considering the effects and capabilities of AI and ML that we’ve observed, we can conclude that there are several benefits of artificial intelligence in eCommerce. They include:
- Enhanced product searching is making the shopping process quicker and more appealing to consumers.
- Personalized product recommendations and shopping experiences are improving the interaction between customers and brands.
- Features like dynamic pricing powered by big data and machine learning algorithms enable eCommerce organizations to be more agile and adjust in real-time to changes in inventory, supply and demand, and other market conditions.
- AI and machine learning systems for fraud detection and prevention reduce corporate risk and enable more secure online payments.
- AI-powered inventory management and warehouse automation streamline logistics and supply chain operations and expand the range of capabilities for eCommerce players.
Looking to the Future
The growth of artificial intelligence in eCommerce is accelerating rapidly, with the development and deployment of machine learning, computer vision, and reinforcement learning technologies paving the for new eCommerce solutions. Advances in robotic automation and autonomous vehicle technologies may enable organizations to fully mechanize some or all of their supply chain, logistics, and warehousing operations within the next few decades.
AI in eCommerce
In the eCommerce industry, artificial intelligence and machine learning applications disrupt traditional operations and create new opportunities in fields ranging from the creation of personalized shopping experiences to the streamlining of inventory management and logistical processes. Here are some of the areas where AI and ML are creating the most impact. Improving Product Search and Recommendations. Personalizing the Customer Experience. Providing Virtual and Conversational Assistance. Optimizing Customer Fulfillment Options. Managing Inventory. Warehouse Management. Detecting Fraud. Detecting Business Trends and Patterns. The growth of artificial intelligence in eCommerce is accelerating rapidly, with the development and deployment of machine learning, computer vision, and reinforcement learning technologies paving the for new eCommerce solutions.