Having grown at a rapid pace in the past few years, e-commerce has become an important part of many people’s lives. At the same time, artificial intelligence (AI), which has been embedded into various aspects of e-commerce, is becoming one of the key drivers behind this exponential growth. From improving customer interactions to facilitating post purchase services, AI provides merchants with powerful machine learning and algorithms to elevate the entire online shopping experience. In recent years, AI has already started managing online customer relationships without any human intervention.
Benefits of AI for E-commerce
1. Predictive Marketing
Predictive marketing is usually associated with big data and machine learning. With these two technologies, online retailers are able to collect customers’ data from various touchpoints. The data is then used to produce customer profiling with the help of artificial intelligence.
Dataism believes that algorithms could understand human beings better than human beings understand themselves, which is not unreasonable. Statistical modelling, machine learning, and deep learning enables AI to predict behavioural patterns accurately. Applied to marketing, this technology could predict things such as a consumers’ taste, household type, and seasonal demand. All this information can insights can help marketers design the most effective promotion for specific periods. E-commerce merchants can then create more effective sale strategies and be well prepared for future demand.
2. Efficient Sale Processes
AI creates a more efficient sales process by collecting customer insights, integrating with the existing CRM, and automating subsequent abandoned cart reminders. Even a simple chatbot can help customers in their purchasing activities. Leveraging on AI technology, online merchants can automate business management and free themselves from mundane tasks that used to require human support, such as price setting and answering frequently asked questions. In addition, AI helps enhance communication between merchants and customers. AI can quickly unlock customers’ hidden emotions during the conversation, providing guidelines for the system to communicate with the customer in a more relevant way. AI is able to engage with the customers more appropriately, and deliver the message more effectively. Retailers can thus lead customers through the funnel in a more intelligent and modern approach.
3. Increase Customer Retention
Customer retention is closely connected with the level of personalisation of product and service offers. Delivering personalised marketing content and shopping experiences to targeted audiences is one way to increase customer retention. With AI technology – in particular, deep learning and statistical modelling – e-commerce retailers can analyse consumers’ historical behaviour, demographics, and other information at scale. Retailers can then generate personalised advertisements, send direct emails, recommend products, and set prices uniquely suited to the shopper. Intelligent personalisation helps online business owners to build stronger emotional connections with their customers, and therefore increase customer retention and make customer more loyal.
The use of AI in E-commerce
1. Chatbot & Talkbots
Chatbot can be programmed to answer routine inquiries to customers, becoming an intelligent Frequently Asked Questions (FAQ) bank. It is one of the AI technologies that is used the most frequently in supporting 24/7 customer service in the e-commerce industry. The Chatbot mainly provides prompt solutions for routine questions and helps customers with their purchase decision. Talkbots or voice bots, on the other hand, provide human-like conversational voice support over the phone, thanks to artificial intelligence. Unlike the chatbot sitting at the landing page, the Talkbot is usually deployed in call centers. Other than answering customer inquiries, the Talkbot is able to help the retailer manage schedules, send out reminders, and conduct outbound telemarketing tasks as well. Talkbots primarily ease the pressure caused by surge of demand, helping reduce operating costs and accelerate business growth.
2. Visual Search
Visual search is the process of mimicking the same processes that people use when we see and identify objects. This technology is designed to make the search process quick and easy by taking or uploading photos to the engine. For visual search, an image is used as a query. Search engines will need to understand it instead of just recognizing the image. Visual search vastly helps to enhance and optimize customers’ search results when shopping online.
3. Intelligent Inventory Management
Inventory management is one of the strategic areas for e-commerce merchant management. It is much more than delivering items from one place to another and sorting them out. Intelligent inventory management relies on large amounts of data to achieve operational efficiency. As mentioned above, artificial intelligence helps with better demand prediction, which at the same time resolves issues of inventory overstock and understock. Also, supported by AI data mining, e-commerce retailers can build efficient factory-to-warehouse transportation, which is critical for products with shorter shelf lives and higher demand volatility. AI bots can also boost inventory management efficiency by scanning and locating stock, then updating stock information.
Combined with capabilities of analyzing data, predicting demand, and suggesting the best delivery route, AI is becoming a powerful technology for retailers to expand inventory management capacity and improve merchant services.
4. Dynamic Pricing
AI-enabled dynamic pricing is the suite of tools that include competition monitoring, automatic repricing, and promotion assistance. By collecting information of inventory conditions, supply and demand relations, customer expectations, and other market information, AI technology can automate the pricing process. Online merchants no longer need to decide the discount and amend the price manually. Dynamic pricing improves the efficiency of the entire pricing process, which in return will optimize the profit for the merchants over time.
Artificial intelligence has been proven to be able to save businesses a lot of effort, time, and money in every aspect of their business. In a tech-crazy and data driven climate, AI is a must for many e-commerce business owners to keep businesses competitive edge.