Artificial Intelligence (AI), though relatively a young discipline, has made its presence felt in pretty much every domain and sector. Likewise, the impact of e-commerce has been felt in many sectors. E-commerce industries have merged AI with e-commerce platforms quite successfully and it is showing its positive results.
AI in E-Commerce
When you visit a mall, you would see many self-checkout cash counters. AI is behind this technology and AI in the e-commerce industry enables companies and businesses to collect and investigate data in real-time, thereby streamlining efficiency in the business.
Lets us take the example of Amazon E-commerce platform itself, product upselling and cross-selling on its e-commerce platform accounts to 35% of its overall revenues. The technology driving this mode of conversion is Amazon’s product recommendation technology powered by artificial intelligence. The E-commerce industry is not using AI just in product recommendations only, but also to provide chatbot facilities, and provide personalized services to online shoppers.
AI in E-Commerce Stats
- 1 in every 5 consumers are willing to purchase goods or services from a chatbot
- 40% of the online shoppers look for great offers and shopping deals from chatbots
- $4.8 billion by 2021 is the projected global e-commerce sales
- 80% of all customer interactions will be managed by AI technologies by the end of 2020
Online shopping with the help of AI is transforming the E-commerce industry by predicting shopping patterns based on the products that shoppers buy and when they buy them. AI-enabled digital assistants or AI tools are now being developed with capabilities like creating grocery lists (based on shopper’s natural voice) or even placing online shopping orders for them.
Related: ONPASSIVE: Building Tools for Future AI Applications
Major AI applications in E-commerce:
1.Chatbots and other virtual assistants
Chatbots or digital assistants are being increasingly used by E-commerce retailers to provide 24×7 support to their online shoppers. AI-driven chatbots are getting more intuitive and are enabling a better customer experience. They also can enhance the impact of AI in E-commerce through capabilities such as:
- Natural language processing (NLP) to interpret voice-based interactions with consumers
- Addressing consumer needs through deeper insights
- Self-learning capabilities that help them improve over time
- Provide personalized or targeted offers to customers
2. Intelligent Product Recommendations
Personalized product recommendations for online shoppers ae increasing conversion rates by 915 % and average order values by 3 %. And with the use of big data, AI in E-commerce is impacting customer choices with its knowledge of previous purchases, searched products, and online browsing habits. The benefits product recommendations provide are as follows:
- A higher number of returning customers
- Improved customer retention and sales
- A personalized shopping experience to online shoppers
- Enable a personalized business email campaign
3. AI personalization in E-commerce
Personalization is the nucleus of AI in E-commerce marketing. Based on specific data gathered from each online user, AI and machine learning in E-commerce is deriving important user insights from the generated customer data. These insights enable E-commerce retailers to make suitable product recommendations and provide a consistent user experience across all devices.
Related: Chatbots as Customer Service Virtual Agent: Feasible or Not
4. Inventory Management
Competentinventory management is all about maintaining the right level of inventory that can fulfill market demand without adding to idle stock. AI-enabled inventory management is enabling how to maintain stocks based on data related to:
- Sales trends over the previous years
- Projected or anticipated changes in product demands
- Potential supply-related issues that could impact inventory levels
It is not just the inventory management, AI is enabling warehouse management with the emergence of automated robots that are being projected as the future of AI in E-commerce. Unlike human employees, AI robots can be used to store or retrieve stocks 24×7 along with immediate dispatching of ordered items following online orders.
In addition to transforming the E-commerce industry in multiple ways, AI in the B2B E-commerce sector is driving a host of innovative solutions. Let’s look at some of the recent industry case studies on artificial intelligence that is impacting this sector.
Final Thought
There is no denying the fact that e-commerce plays a leading role in driving innovative solutions and customer experiences coupled with the effective use of AI. As mentioned above, AI in e-commerce is ably being used in the area of personalized shopping, product recommendations, and inventory management.
As a small business or an online retailer, are you considering to implement a working model of artificial intelligence for your business?
Designed for AI in E-commerce startups, ONPASSIVE’s AI-powered ecosystem is an established data analytics provider that is enabling online retailers with solutions centered around product analytics and E-commerce KPIs. We can help you leverage the possibilities of AI and machine learning in the E-commerce domain.