How Can Artificial Intelligence Help E-Commerce?

After the events of 2020, online trading will not be the same. While the entire planet was frozen by the pandemic, traditional retail found itself unable to compete with online shopping when people’s lives were confined to their homes. But it is worth recognizing that the already considerable competition on the Internet has now become even greater. And to win this fight, you need to be one of the first to introduce new tools. Including artificial intelligence, machine learning, and big data analysis.

Many applications, services, and programs have been created based on artificial intelligence technologies, but not all of them are equally applicable to online stores. In addition, they are quite expensive to implement. So before we start implementing fancy new technology, let’s take a look at how AI can power e-commerce growth, improve customer experience, and increase conversion rates.

What is AI?

Artificial intelligence (AI) technologies perform tasks that were previously only possible for humans. Like people, they learn from experience and information that is available to them, but they learn much faster. The idea of artificial intelligence dates back to 1956, so it is already an old and reliable technology with a strong mathematical and software basis.

Since businesses have moved online, artificial intelligence has had to work hard with all the petabytes of behavioral, financial, and marketing data that companies collect. And even if two out of five AI startups are not based on AI at all, the number of solutions on the market is still huge.

The biggest disadvantage of artificial intelligence technologies is that they are completely dependent on the data they are given. If the data is insufficient or of poor quality, it will be of little use. And it takes time and expertise to integrate this technology into a company’s existing data ecosystem.

How can AI be used in e-commerce?

So, before implementing AI, it is important not only to collect enough data but also to ensure its quality. Artificial intelligence is motivating companies to integrate sales, marketing, advertising, customer service, and even logistics departments into a single data structure where data quality and completeness are the number one priority.

When all business data is collected and stored correctly – without loss or duplication, without format violations, if all connections are logically constrained – then such data can be used for training artificial intelligence and further use. They will allow you to obtain high-quality analytics with sufficient power to solve complex business problems, improve processes, and improve the quality of customer service, as well as create AI applications in ecommerce that will make your work easier.

Here is a short list of AI capabilities for online retail:

Predict future conversions. By tracking all user actions on the site and in the application, you can predict what purchase and when he will make and not target him with “extra” advertising, but increase bids at the most opportune moment.

Increase ROI (return on investment) of advertising campaigns. By optimizing the targeting of advertising campaigns, AI allows you to reduce your advertising budget without losing sales. Those visitors who are not yet ready to purchase will be excluded from advertising segments or their rates will be automatically reduced.

A “smart assistant” that helps customers find the products they need. With the help of AI, you can improve the search logic on the site and create a chatbot that will help visitors place orders at any time.

Only personalized offers. Tracking all touchpoints, all products that customers viewed, and all prices to which they responded – allows you to create a personalized pool of products and offers for each customer.

Predict the customer journey. Based on artificial intelligence recommendations, you can make the path to purchase as comfortable as possible, and gain a competitive advantage due to flexible margins and the ability to evaluate the effectiveness of the future marketing plan. In addition, offline sales points can be improved. Collect data from sensors and video cameras to track how visitors move in the store – how they build their path, where they stop longer, and which racks are left unattended.

Reduce human errors in supply chain planning. Full visibility into real-time inventory can be achieved.

Detect problems before they arise. AI technology allows you to receive notifications about anomalies or suspicious transactions, supplier actions, and fraud, while there is still time to intervene in the situation and find out what is happening.