The e-commerce industry is expected to gross more than $740 billion by 2023. The reason why this industry develops at such a rapid pace is obvious: new technologies give more opportunities for entrepreneurs. When it comes to new technologies, artificial intelligence is one of the most discussed topics.
Many people call AI a disruptive technology for its ability to simplify cumbersome tasks that used to take a lot of time and effort when performed manually. AI offers countless innovative solutions for both big and small businesses. As for the e-commerce industry, it can add many valuable features to the e-commerce platforms, improving customer experience.
Retailers, manufacturers, and digital startups are constantly looking for a chance to improve user experience and boost brand performance. That’s why now they introduce new standards of efficiency, using AI-powered software. One of the areas that can benefit from machine learning and AI most is marketing, because AI can work with massive amounts of data. Many companies choose AI-backed solutions because they offer a significant competitive advantage, allowing businesses to provide a personalized customer experience.
Now let’s take a look at the applications of AI in e-commerce.
Chatbots and voice assistants are probably the most popular examples of AI taking customer experience to the next level. Thanks to chatbots that learn from their previous conversations, customers can get the necessary help at any time, in the most natural way possible. Moreover, according to statistics, 48% of consumers prefer live chat conversations over other means of contact. 57% of consumers like chatbots for their instant responses, and 27% of consumers would rather buy an item from a chatbot than a human.
- AI-based email marketing
Email marketing is still very effective and it isn’t going to disappear anytime soon. However, the effectiveness of your email marketing efforts directly depends on your ability to offer information about products that are actually interesting for your audience. Here’s where AI comes in handy, allowing marketers to optimize their campaigns and to deliver perfectly targeted emails at the right time.
Various automation solutions can help you send emails at a time when a particular customer is most likely to read them. This feature can be especially useful if you work with customers from different countries. Besides, professional localization services from The Word Point can help you develop an effective international marketing strategy.
AI can also work with data from social media and various public sources, learning more about every customer from the history of their purchases and interactions. The more AI learns about your customers, the more effective your email strategy can be.
- Personalized recommendations
As we’ve already mentioned above, AI offers countless benefits for personalization. It can analyze your customers’ online behavior, detecting important patterns and predicting what products will likely attract a particular customer. AI solutions collect data on each customer’s previous purchases and on-site interactions. AI can also analyze your customers’ conversations with your support service or chatbots. All this information enables e-commerce businesses to offer relevant recommendations that boost sales in no time.
For instance, Netflix and Amazon have already demonstrated the power of personalization. These companies were among the first businesses that implemented AI-based marketing strategies. Today, as much as 80% of the content watched by Netflix users is offered by its AI-powered recommendation algorithm.
- Product search
Some users who visit e-commerce platforms are looking for a specific product, while others don’t know exactly what they want or are willing to check out all similar items. Effective product search is extremely important for any business, and machine learning can improve it significantly. For example, AI can be used for visual search. It offers a great competitive advantage, since 62% of millennials consider visual search the most important innovative technology.
A good example of the visual approach is Pinterest Lens, which enables you to take a picture of virtually any item around you and search for similar products or items that can go along with it.
- Predictive analytics
AI-powered tools for e-commerce platforms can not only analyze historical data but also track events in real-time, using both internal and external sources. For example, AI can help you quickly react to a decrease in sales caused by your competitors or third-party issues that affect transactions.
Besides, AI can predict future outcomes based on historical data and current processes. For instance, it can predict what products are more likely to be purchased so that managers can restock the necessary items, with no need to make expensive adjustments later. One of the biggest advantages of predictive analysis is that it’s based on solid data. It’s not pessimistic or optimistic but accurate and fact-driven.
- Product descriptions
Although AI is still far from replacing human writers, it’s already used in content creation. Accurate and specific product descriptions are very important for e-commerce platforms. Writing hundreds of product descriptions for the inventory of products that constantly grows is expensive, but AI-based solutions can do it automatically, saving a lot of money.
Not only is AI capable of rewriting information from the manufacturer’s website, but it can also search for details about the product on the internet, adding more relevant information to your descriptions. It can analyze keywords and select information that is most searched by consumers. In addition, AI can analyze the effectiveness of its descriptions and make the necessary adjustments.
- Dynamic pricing
Dynamic pricing can help e-commerce retailers increase their sales. However, humans cannot monitor and adjust prices as quickly and effectively as AI does. AI can analyze historical data from you and your competitors, making accurate sales predictions and providing you with pricing recommendations.
For instance, Amazon uses an AI-based algorithm to change product prices every 10 minutes. The algorithm analyzes competitors’ prices and common shopping patterns, as well as dozens of other factors, making sure that prices are competitive at any moment.
- Filtering negative reviews
The importance of reviews, especially negative ones, is hard to overestimate. According to research, 90% of consumers make their purchasing decisions based on online reviews, and 86% of them note that their decisions are influenced by negative reviews. Of course, you should always pay attention to negative reviews so that you can improve your services. However, not all of them are real. Every successful e-commerce retailer has many negative reviews left by competitors and bots. Filtering fake reviews is a tedious task that would take a lot of time if performed manually.
However, AI can quickly detect reviews that were marked as helpful by consumers or written by verified users while getting rid of the fake feedback that could undermine your reputation.
- Data management
All e-commerce businesses work with tons of data and produce more data all the time. There are customer profiles, purchasing details, information on transfers, etc. Working with massive amounts of data would be extremely challenging without AI, which is the main reason why this technology becomes so popular.
AI-based solutions don’t need to organize raw data to work with it. Moreover, they can demonstrate even better results when working with raw and unstructured data. AI can handle data of any kind, with no restrictions. It can also store different types of data in one location, introducing new standards of flexibility and processing data faster than ever.
- Voice assistants
Voice recognition is one of the fastest-growing areas of machine learning. Consumers are looking for simple interactive solutions and seamless user experience so they don’t want to type every word in the search box. Powerful AI algorithms allow customers to simply ask and get what they want. The popularity of such AI-powered devices as Amazon Echo and Google Assistant shows how much people like voice search and how it can help e-commerce platforms increase profits.
The e-commerce industry has been around for quite a while, so why should it suddenly change because of new technology? Well, artificial intelligence is more than just another technology. Its disruptive potential is unquestionable because AI can easily perform many tasks that are impossible for humans. AI can work with massive amounts of data, analyzing it, learning from it, and making predictions based on it.
AI offers countless benefits for e-commerce marketing because it enables retailers to provide a personalized experience and to adjust their marketing strategies on the go. Efficient data management, personalized product recommendations, chatbots, and visual search are just a few competitive advantages that you can get by using AI-based software. AI can analyze your competitors’ prices and offers, making timely suggestions so that you won’t lose your customers. It can also manage reviews and make sure that consumers will have accurate information about you and your products.
Given the strong competition between e-commerce retailers, keeping up with your customers’ expectations becomes a necessity, and AI offers a perfect solution.