AI & Machine Learning: Their Roles in the Ecommerce Industry
Did you know that AI-driven business is likely to reach 49 billion USD by the end of 2021? And currently, AI and machine learning are handling more than 80% of customer interactions. AI-based automation soon will take over the ecommerce industry and bring a revolution in the ways we’re experiencing ecommerce business today. The future of online shopping will be determined by the advancements in AI technologies.
We all know, unlike humans, machines never get tired of working. Employing machines to complete mundane tasks is more feasible than hiring a lot of employees. Besides, AI-enabled devices and Softwares don’t make mistakes. So it is beneficial from every aspect to use AI in the e-commerce industry. Read on to learn what machine learning is and how AI helps provide a great online shopping experience for the customers.
What is Artificial Intelligence (AI)?
Artificial intelligence refers to a comprehensive branch of computer science that specializes in building intelligent machines capable of completing tasks that usually need human intelligence. It mainly comprises machine learning and deep learning. AI is currently transforming each sector of the technology industry with its rapid advancements. A competent AI program can learn, perceive, reason, plan and process natural language. AI is fully internet-based technology and our lives are now affected by the internet to a great extent. That’s where AI comes into play.
What is Machine Learning?
Machine learning shares its root with artificial intelligence. It’s basically implementations of AI in building systems that can automatically learn from experience without being programmed priorly. Even they can improve their performance by taking the previous experience into account. These computer programs access different structured and unstructured data and make use of that to learn for themselves. So, machine learning is actually the process where computers are programmed to learn on their own without any human interference.
The Role of AI in Transforming the Ecommerce Industry
The alliance of AI and machine learning is shaping the future of online businesses. From convenient inventory management to effective customer service and implementation of AR/VR technologies, machine learning and AI are delivering unprecedented results for online store owners. Let’s be more precise about how AI can benefit you in the ecommerce business.
You need to depend on several marketing channels to generate expected sales from your ecommerce website. AI can easily analyze numerous data and provide relevant information about users. This data helps greatly to create buyer personas, run paid ads, and target the right customers with the right marketing strategy. You can segment your customers into different target groups using the demographic and psychographic data generated by AI.
Knowing the right stock level and determining the right time for replenishment, and forecasting the sales are a few critical things related to inventory management. Machine learning algorithms can deliver great insights into every aspect of your warehouse management. You can identify trends, sales spike, and downturn with the help of AI. AI informs sellers about what items are overselling, what are idly occupying storage space, and what need to be restocked soon. All this useful data facilitates a smooth inventory management system even if you use enterprise ecommerce solutions.
Machine learning and AI can help you make informed decisions backed by data instead of making decisions based on intuitions. Data-driven decisions are more likely to yield the best results. You can easily get ideas on whether or not your marketing campaigns and website performance are producing enough revenues. Measure the overall success of your ecommerce endeavor using credible data and adopt new strategies if the old ones fail.
Algorithms consider user data and shopping behavior of the visitors and recommend relevant products for the prospective customers. This type of personalization becomes possible only because of AI and machine learning. People want to have a personalized experience in online shopping, and precise personalization increases conversions. You can also promote cross-selling and upselling by utilizing AI.
Only a fragment of total visitors converts into customers. Increasing conversion rate is a great concern to all ecommerce business owners. AI can help them by providing relevant search results for the users. Machine learning algorithms can analyze the input data and suggest precise data according to the search queries and their previous learning experiences. Customers will buy something from you only if they get what they're looking for.
Since both buyers and sellers don't see each other but communicate virtually, fraudulent activities are very common in the ecommerce business. AI helps detect fraud buyers by analyzing customer behavior and transactional data. These AI-enabled algorithms can detect suspicious transactions coming from unusual locations, unverified devices, and occurring at a peculiar time.
AI and machine learning have the potential to improve customer services to a great degree. Live chat and chatbots are two new additions, helping retailers provide 24/7 support to the customers. These AI-enabled bots interact with visitors in real-time and answer their common queries. Moreover, with machine learning, you can even detect issues before your customers and solve them beforehand to ensure an amazing customer experience.
You need to fix a competitive point so that customers find you affordable. AI helps users understand pricing trends, the gap between supply and demand, and customers’ reactions to different prices. If your ecommerce products cost the same as products of a brick and mortar shop, then most customers will prefer to shop from physical stores. You need to analyze the prices across several ecommerce platforms to come up with a reasonable price point. Machine learning algorithms can help you by providing these variables that affect product prices.
The influence of artificial intelligence is increasing every day. Virtual reality and augmented reality soon will become integral parts of the ecommerce industry. People now want to experience their products virtually in real-life environments. Augmented reality has made that possible. And who knows what mysteries AI and machine learning have up their sleeves in the coming years. So, the earlier you integrate AI and artificial intelligence into your business, the more you’ll make profits.
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About the Author
Md. Tanvir Faisal
Md. Tanvir Faisal is a Content Creator at Royex Technologies with 3 years plus experience in Content Writing, Copywriting, Proofreading, and Editing. He emphasizes writing content that draws social media attention and enhances search engine visibility. To date, he has successfully developed useful content for many websites across all formats.