Dive into the dynamic realm of eCommerce as we unravel the profound impact of Artificial Intelligence. From personalized shopping experiences to streamlined operations, discover how eCommerce AI is reshaping businesses, amplifying efficiency, and propelling the future of online commerce into uncharted territories.
When a machine, specifically a computer system, simulates the functioning of human intelligence, it is known as artificial intelligence or AI. Like in any other field, the introduction of AI in eCommerce has revolutionized the industry. From retailers to warehouses, AI has touched all aspects of eCommerce and is now contributing to the gradually increased efficiency in which the eCommerce industry moves.
Effect of AI During Pandemic
The onset of the global pandemic accelerated the implementation of AI in eCommerce. Many traditional shoppers shifted their focus to online shopping. The urgency to incorporate AI into businesses grew as the online marketplace grew. Online retailers implemented AI in different forms to make their business processes more efficient. From adding a product to a cart to delivering that product to the customer, there is a scope for implementing AI at every step. During the global pandemic, companies started to look at these scopes more closely and implement them slowly and surely.
How does AI impact eCommerce?
Artificial intelligence has several components, including natural language processing (NLP), machine learning, and data mining. Through NLP, one can focus on the way in which a computer interprets our (human) language. All historical data is collected in machine learning to solve a current problem. Whereas in data mining, past and current data are collected for predictions.
In eCommerce, AI can be implemented to suggest the best price, make the site search smarter, make the shopping experience more intuitive, and provide a more personalized shopping approach. AI can also be used to reduce the occurrence of online fraud and automate the customer support process. Let’s look at each of these areas of implementation individually.
• Suggests the Best Price
As a retailer, the ability to price your product optimally is a huge plus. You can use AI to sieve through large datasets of similar products and give you a range to price your product. Too low, your product might come off as cheap. If it is too high, the product will be deemed expensive and not worth it. With the dynamic pricing feature of AI, you can have competitive pricing for your product.
Additionally, AI will consider the demand and supply chain when suggesting the price. You can also adjust your pricing according to your competitors. If they have a smaller product supply, you can increase your product cost and vice versa. All in all, you can use AI to tweak your product price according to the market price and ensure that the price is always competitive.
• Smarten up Site Search
NLP has revolutionized the way the search engine processes its results. With NLP, you can analyze a shopper’s questions and give predictive search results accordingly. AI also helps searchers with the suggestions of missing words, synonyms, and automatic spell check. Combining keyword search and vector search, you can exponentially improve the search results for your audience. In vector search, the system analyzes the searched word and provides other results with a similar context to the search word, thus improving search efficiency. AI also has technologies such as audio and visual search for people who are unable or unwilling to type and those who prefer to search using images.
• Intuitive Recommendation and Personalized Shopping
Customers who shop online seek personalized experiences that will make them feel special. In a report published in 2021, McKinsey stated, “Personalization, supported by data and analytics, is a powerful tool to strengthen the connection to the brand, win consumer loyalty, and draw customers into stores.” In fact, most customers nowadays expect that personalized experience.
AI has provided a much-needed boost to the eCommerce industry and enabled them to provide that personalized experience for online customers. AI can analyze a customer’s shopping data and provide useful insight, helping online retailers to tailor their recommendations to customer’s needs. This boosts sales as a customer feels special when the recommendations are accurate, and they feel special. The firm McKinsey has also found out that retailers offering these personalizations have a whopping 40 percent higher sales than those who do not have that facility.
• Less Chance of Online Fraud
With the meteoric rise of online business during the global pandemic, there has been a considerable rise in online fraudulent activities. However, AI can effectively detect and combat these online frauds. AI can analyze mammoth amounts of data to highlight suspicious activities almost instantly. For example, suppose a customer has a fixed amount of spend per month and has exceeded that amount for another month. In that case, AI can note that behavior and warn the affected parties.
Another area where AI is being used nowadays is to fact-check data. This is especially useful if people post fake reviews online or spread fake news or videos.
• Customer Support is Automated
AI has had considerable success in automating online chat support. AI, in the form of chatbots and several other types of virtual assistance, has successfully engaged customers online. AI uses NLP to analyze the tone and detect what a shopper needs. AI in the form of chatbots has been immensely helpful for those retailers who don’t have the resources to run 24×7 live agent customer support. These chatbots are efficient, humorous, and have the patience to deal with irate customers whenever necessary. This leaves the human agent to take up the sticky issues that chatbots cannot resolve. More customers nowadays are starting to trust the recommendations given by chatbots and sometimes get promotional offers from chatbots that are tailor-made to their requirements.
Conclusion:
The global pandemic has opened a whole new world for brick-and-mortar shops that went online to sustain their business. AI is a powerful tool in helping these shops flourish their online businesses. Like in many other fields, AI has changed the face of the eCommerce industry in the last couple of years. Its cutting-edge technology impacts every aspect of retail business and has been a real lifesaver. As further research continues to be done in developing AI, people in the eCommerce business need to keep tabs on these developments to benefit from them as optimally as possible. It could be chatbots, drones, or robotics; no avenue is small or insignificant enough to explore.
About XPDEL:
XPDEL is a leading hi-tech provider of Fulfillment and Logistics Services on a mission to enable growth for eCommerce companies. We are futuristic in our vision and constantly work on creating technology that helps us meet customer expectations for today and tomorrow. We have a wide network of Fulfillment centers that enables us to efficiently handle nationwide delivery in the US – same day, next day, and 2-day delivery. Being closer to the end consumer, we deliver much faster than others.
