From providing shoppers with personalized product recommendations to delivering items faster than ever before, artificial intelligence (AI) is revolutionizing how we shop online. As a result of this trend, many retailers are integrating AI into their operations, and it is quickly becoming integral to the online shopping experience. Let’s look at seven powerful ways in which AI is being used in e-commerce today.
1. Chatbots for Customer Service
For e-commerce shoppers, the introduction of chatbots makes it possible to access customer service or report issues with their orders through a simple chat.
AI algorithms enable chatbots and virtual assistants to answer questions about products and help with shopping lists. Many companies use AI-powered chatbots that automate order processing and payments. Chatbots provide real-time, 24-hour customer service.
Similar to the way other advances in communication, like video calling and cloud calling, can quickly bring people from different locations together, a chatbot can have customer service ready at a user’s fingertips.
For example, a bot on a fashion website can be “taught” using knowledge from fashion experts to help customers find the perfect outfit for any occasion.
Some of these AI systems are flexible enough to engage in conversations wherever they’re needed in the online shopping process, while others focus on specific order-related tasks such as processing payments, finding products to add to your cart, or looking up product information and pricing estimates.
2. Web Design Optimisation
The layout, colours, imagery, and content of your website can be tailored to increase conversion rates based on what customers are buying or browsing most often.
For example, if someone has been visiting your site for weeks looking at white shirts with blue sleeves but never purchases one, AI could make adjustments so that person sees more of those styles when they return.
AI can track which products are popular and then display them more prominently on your site, or it can customize the entire layout of your site to each individual viewer to optimize their chances of making a purchase based on their previous behaviour.
3. Personalised Product Recommendations
When a user is shopping on a retail website, they may be shown products that are similar to what they have previously viewed. This helps their browsing experience by making it easy for them to see items of interest.
Using machine learning, retailers can better predict customer preferences. An algorithm can analyze previous purchases and browsing habits to personalize recommendations for individual shoppers, therefore increasing the number of sales.
For example, if a specific customer has bought the same flavour of vape juice from your site multiple times, AI can recommend that flavour to them again—along with other flavours that might interest them based on the purchase history of other shoppers.
AI can even help with marketing by analyzing data from social media platforms such as Facebook or Twitter. This allows companies to more effectively market their products and communicate with customers based on what they’re interested in.
Personalized product recommendations from an algorithm could more effectively catch the attention of potential buyers than other types of advertisements.
This type of personalized digital marketing can also help the user make a purchase decision faster because they are being shown items they are historically or statistically likely to be interested in.
4. Automated Email Campaigns
Sending out email blasts to your customers is an important way to keep them engaged with and excited about your business.
Artificial intelligence can help you improve your email marketing campaign by allowing you to send personalized content at different time intervals to customers who have shown interest in certain products or offers.
AI technology in conjunction with marketing automation software can build a digital avatar of each segment of your target audience based on their browsing habits and purchase history.
This enables you to craft more personalized messages targeted at individual interests or needs.
By automating your sales process with this robust technology, every email campaign can become much more relevant because they are tailored specifically for someone who shares similar tastes as the buyers themselves.
5. Predicting What Consumers Will Want (Before They Want It)
Predictive analytics can accurately guess what consumers will want before they know it themselves, and that kind of information puts you way ahead of the game.
If you can predict which products will be most popular, that helps to ensure you have the products your potential customers will be looking for. The more data that companies collect on individuals, the better their predictive analytics will be.
It’s not just about following customers around in your virtual store and tracking how much time they spend examining a product before buying, it also uses other sources of information like social media posts, general browsing habits online, and search queries—anything that can help predict future trends.
All of this information from various sources can help companies predict what people are going to want next before they click on your website. This allows them to make sure every customer who wants something will find it in stock.
This is a very important point for companies because it helps them not only meet customers’ needs but also create new items they may want based on data they’ve collected about their past behaviour.
The better business analytics get, the more accurate predictions will become, and individual consumers will benefit too since predictive analytics help cut down on their shopping time and help to increase their satisfaction with their purchases since they’re buying the “right” thing for them.
6. Enhanced Inventory Management
Demand analysis and forecasting are being used to predict customer demands. As AI analyzes data from multiple sources, it can present a forecast of what the demand will be in the future. With more accurate predictions on sales data, businesses can make more informed decisions about their inventory and supply chain.
AI predicts how much stock needs to be bought ahead of time or manufactured, as well as analyzing past trends to predict future expectations.
By looking at historical data from several different sources, AI software can analyze patterns that would not have been noticed by humans alone. This gives a more accurate view into which products are trending.
E-commerce companies can use this information to identify trends that are still on the horizon, so they can place orders with manufacturers early enough that there aren’t any shortages and they don’t run out of stock.
This helps them make sure every customer who wants to buy a certain product from you will find it on your website. This way, no customer has to go without, and you don’t miss out on sales.
Knowing what stock you’ll need long before you need it is more important than ever, now that the supply chain has been heavily disrupted by the global health crisis. Every bit of information that helps you maximize the efficiency of your supply chain helps ensure there are fewer issues with deliveries and can increase your peace of mind.
7. Identify Fraudulent Transactions and Sales
Protecting your company from fraud is always a challenge, especially now that so many e-commerce businesses are offering the option to pay with Bitcoin.
To help your company identify fraudulent transactions, AI is being used to detect patterns in sales and purchases that might be indicative of fraud. However, it can’t catch them all yet.
Determining whether an order is fraudulent can take hours for customer service agents since they have to look through each transaction manually. This takes away from their time spent on other duties like preventing future fraud and closing support tickets faster.
With more employees doing less work, this could lead you to tighter margins without the needed coverage elsewhere. However, with AI detecting potential fraudulent orders automatically before agents review them, processing times are reduced.
AI Is Good for Your Company—And Your Customer
Applications of AI in e-commerce are not just about companies; there are many ways that individuals can benefit from this technology too. For example, using a shopping app to buy items saves time. This is convenient for those who have busy schedules or want to find the right product at the right price quickly.
Artificial intelligence will never fully replace humans in e-commerce. AI may help a company grow faster and more efficiently to meet the needs of its customers, but humans bring creativity and innovation—two things that are essential for the future.
The most important thing to remember when deciding whether or not AI should be implemented in your business is that you need people on board who fully understand how AI works as well as its limitations.
Even though these systems are becoming more and more accessible each day, it’s critical that you understand an AI system’s strengths and weaknesses so you can know exactly what to expect.