AI in eCommerce- Driving the Change



In the eCommerce and retail industries, AI (Artificial Intelligence) has been a game-changer. With the global eCommerce sales projected to touch $30 trillion in 2023, 70% of eCommerce decision-makers believe AI will help personalize their business.

While AI does not guarantee overnight success, eCommerce businesses are using the technology to increase conversions, attract and retain customers, and offer excellent customer service. A study from Gartner even noted that when eCommerce businesses added AI to the mix, their conversions increased by 30%.

So, how is AI changing the eCommerce shopping experience in 2021 and beyond? Read along to find out.

AI’s in eCommerce

A successful eCommerce business does not mean sending hundreds of emails to subscribers, having a wide audience base, or bombarding the Facebook timeline of the target audience. Instead, an effective eCommerce business is about giving customers quick access to the products or services they’re looking for, answering their questions promptly, offering them guidance, and providing them with a personalized shopping experience.

This is where Artificial Intelligence kicks in.

Impact of AI in the eCommerce industry

AI does a lot more than simply ease customer interactions. It can manage your inventory, boost sales, increase the rate of conversions, and so much more.

1. Chatbots or customer-centric virtual assistants

Digital assistants or chatbots are increasingly being used by eCommerce retailers to offer 24/7 support to their online shoppers. AI-driven chatbots are more intuitive and enable a better customer experience.

Besides offering great customer supports, AI-driven chatbots are impacting the eCommerce business designs through the following capabilities:

i. Self-learning capabilities that help to address customer needs with deeper insights.

ii. NLP or natural language processing that can interpret voice-based interactions.

2. Personalization in product recommendations

Collecting and processing customer data about their online shopping experience is easier than ever. AI provides customized product recommendations based on the customer’s past buying behavior and browsing history.

eCommerce stores that recommend products based on previous purchases or browsing patterns use machine learning to assess the customers’ purchase history. It is predicted that machine learning will require less involvement from data scientists to analyze and interpret data with time.

3. Advanced visual search

The AI-powered visual search technology utilizes real-world pictures like screenshots, snaps, or Internet pictures for online searches. First, it comprehends the content of the image and then comes up with related or relevant results. Smart visual searches are helping the eCommerce businesses, especially home décor and clothing.

4. Intelligent inventory management

Inventory management is about maintaining a specific level of inventory to fulfill the demands of the customers. The use of AI in inventory management enables stores to maintain stocks according to data related to anticipated changes in product demands, sales trends, and potential issues related to supply that could influence the inventory levels.

5. Automated product descriptions

On eCommerce apps or sites, the right product description can make a huge difference. Irrespective of the product pictures, customers will lose trust and hop onto other eCommerce platforms if the descriptions are not adequate.

Thanks to AI, you don’t have to go through the tedious process of manually entering descriptions of each product. Instead, the entire process is automated, and AI will copy the manufacturers’ product details and find the latest information related to the product.

As AI can analyze keywords related to the product, it comprehends the accurate details and includes them in the product description.

6. IoT

The latest buzz is IoT or the Internet of Things that is enabling data exchange between devices via the Internet. IoT is also helping eCommerce, and retail businesses make their operation smooth by managing inventory, supply chain, warehouse, and offering improved customer experience.

It is possible to maintain your inventory in real-time by using IoT sensors. You can track and monitor the inventory items, and therefore, eliminate human errors in reordering items. In addition, details like the manufacturer’s name, product type, batch IDs, the items’ expiry dates, and other information can be stored automatically in the system without human intervention.

Besides inventory optimization, IoT helps in improving customer experience by offering deeper insights about the products that are popular in social media and other digital channels. For example, it recognizes the shopping patterns in online browsing and search trends.

7. Smart searches

Predictive smart searches are making eCommerce platforms more convenient and accessible. If shoppers can quickly find what they’re looking for, they’re more likely to convert.

Previously, search options were mostly based on keywords, and it was often difficult to find a product whose name customers didn’t know. Furthermore, as their search would not match up to the product, it would seem that the store doesn’t carry the item customers are looking for. That’s where AI comes in handy.

AI is useful here with its predictive search that offers suggestions based on a customer’s past searches. For example, if the customer has already viewed a product page, the results will be on top of the suggestion list. Moreover, AI can help find correlated products or associate keywords that might match the customer’s searches even if it doesn’t contain the exact wording.

8. Warehouse automation

In recent years, warehouse automation has been a requirement in eCommerce businesses. Since features such as next-day or same-day delivery have become common customer expectations, the requirement of warehouse automation cannot be denied.

The order volumes are increasing in eCommerce, and the turn-around time is decreasing. Also, the SKU numbers are proliferating while the sizes of orders are reducing. As a result, the warehouses are getting rid of conventional practices to meet such increasing demands.

What’s required, you ask?

AI-based smart robots take stock items around the clock and continue to work without any break. For example, when an order is made, the information is sent to the warehouse management software, and the software communicates the details with the respective robot. The robot is then sent to take the ordered goods out of stock and box them, so they’re ready to be shipped.

9. Enhanced cybersecurity

Millions of people are affected every day by identity theft. However, breaching cybersecurity and stealing sensitive customer information is not new and has been around for decades. Earlier, companies would take about hundred to two hundred days to detect or identify a breach. But, times have changed. 

Security is paramount to an eCommerce platform because of its database which stores customer information. This is what makes eCommerce platforms a target for cybercriminals and hackers looking to steal data.

Machine learning algorithms and AI come together to prevent unauthorized access and mitigate the chances of fraudulent activities. It ensures a platform is capable of taking real-time decisions while ensuring the safety of customers’ data. In addition, AI can detect subtle patterns and inform authorized personnel to prevent any security breach.

10. Generating sales via wearable tech

Mobile’s role in eCommerce today is undeniable because people love to shop on their mobile devices. They may start to browse on their PC or laptop but prefer to continue their online shopping spree as they step out or while traveling. So, customers like to shop on platforms that offer a seamless shopping experience across devices.

Similarly, wearable technology is beneficial for eCommerce platforms. Wearables have the amazing ability to collect information more than what eCommerce platforms do; such as seeing the products viewed by the customer or defining their taste. Some wearable technology can even offer personalized product recommendations.

If physical data is added to the mix like measurements, vital statistics, and pupil dilation rate, the level of recommendation could be tailored to what the customer wants, and it is genuinely incredible.

As customers are no longer interested in carrying wallets and making everything cashless, wearable technology is making shopping a checkout-less experience. Of course, AI integration is at the core of all of this.

11. Creation of data-based UX

The user experience or UX of the platform is everything for an online business, and that’s what differentiates between failure and success. The UX of an eCommerce platform determines if a customer will follow through with a purchase, revisit the platform or recommend the platform to others. Unfortunately, so many eCommerce platforms are struggling because they offer a poor UX and constantly look for ways to change or improve the design.

When it comes to optimizing eCommerce platforms, designers are taking help from AI. Artificial Technology can measure consumer behavior, along with vital metrics in real-time. So, designers can pinpoint the exact pages that need a UX refresh. 

The functionality of a platform is not the sole element influencing the UX. The overall appearance and design matter as well. AI assists designers with optimized design testing and encourages them to implement predictive technology to make online shopping so much more convenient and easier for the customers.

Wrapping Up

AI is revolutionizing the eCommerce sector, and its impact can be felt in the streamlined sales processes and accentuated customer experience. However, these changes are only the tip of the iceberg as there’s much more innovation on AI’s radar.

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