How Artificial Intelligence is Changing eCommerce
AI makes it possible for eCommerce sites to use customer behavior data from various sources to identify shoppers’ needs and preferences, choose the right product inventory, and arrange the right optimization.
The eCommerce industry has been a pioneer in using and demonstrating the contribution AI can have in improving online customer satisfaction. AI makes it possible for eCommerce sites to use customer behavior data from various sources to identify shoppers’ needs and preferences, choose the right product inventory, and arrange the right optimization. Ultimately, AI contributes to a more satisfying user experience. It can even help with starting your own online store.
ThinkML Team
This article explores these and other ways in which AI has changed the eCommerce industry.
Setting the right prices
An eCommerce operator’s profits increase if they are able to find optimal pricing. AI-powered software can analyze vast datasets, making it much easier to find the right price. You can change prices based on market movements through AI-enabled dynamic pricing. If a competitor’s site is short on a given product, for example, AI can alert you to the fact, and you can increase your prices in response.
ThinkML Team
Personalizing the shopping experience
There is nothing a buyer appreciates more than a customized shopping experience. According to a 2021 McKinsey report, personalization supported by analytics and data is a powerful tool to attract customers, win their loyalty, and strengthen the connection to the brand.
The report further states that most consumers have come to expect customized shopping experiences. At the same time, only 15 percent of retailers had rolled out this option across all sales and marketing channels when the report was published.
AI enables computers to capture and process huge volumes of customer data and provide insightful analytics in real time. This lets websites suggest the most suitable items and offer attractive discounts.
Solid sales are the obvious outcome. The report concluded that firms utilizing customization in the online shopping journey generate 40% more profits than online retailers who don’t prioritize personalization.
ThinkML Team
Automating customer support
When it comes to good customer support, virtual assistants like chatbots can be very helpful. Their functionality can help determine shoppers’ demands. With machine learning solutions, they can improve their knowledge over time.
Chatbots have distinct advantages over human customer support representatives. They are available around the clock, do drudge work so human agents can deal with more complex issues, and never take coffee breaks. They are always polite and have many of the answers a customer seeks.
Thanks to recent technological advances, especially in AI, chatbots’ abilities are becoming more refined. Shoppers are warming to them more and more with time, particularly considering the state of human support.
ThinkML Team
Preventing online fraud
Online fraud associated with eCommerce platforms incurs tens of billions of dollars in damages each year, according to Statista. AI can rise to the challenge in many advanced ways.
In the past, hordes of employees had to review and analyze transactions for anomalies. Today, machine-learning algorithms can detect fraud using complicated rules to analyze millions of datasets and identify suspicious behavior.
These capabilities are quite impressive. For example, an entity trying to commit fraud might enter the wrong shipping address, which is something a human would never respond to or probably even notice. In particular, this would not happen in the little time an algorithm could flag the error. Fake reviews are another problem AI is being utilized to address.
ThinkML Contributor
Limiting manual labor
AI can take on routine tasks and reduce the number of human employees. It’s certainly unfortunate that bots are replacing human retail employees. When it comes down to profit, though, few businesses can argue with the fact that AI saves money.
AI can increase conversions
Conversion rates can always be higher. Instead, eCommerce platforms struggle with abandoned shopping carts and other issues. eCommerce operators can use AI to increase conversion rates. Algorithms let them follow up when potential buyers leave the site and items in their carts. They achieve this by collecting information about users, such as their email addresses, and sending them emails to remind them of their forgotten carts.
ThinkML Team
