Artificial Intelligence in eCommerce

How artificial intelligence is revolutionizing eCommerce

It’s official: artificial intelligence (AI) is taking over eCommerce! By 2025, Gartner predicts 95 percent of all customer interactions will be powered by AI.

If you’re wondering what the hype is all about, read on. We’ll review the current state of artificial intelligence in eCommerce, and its benefits and applications for your business.

5 benefits of artificial intelligence for eCommerce

There’s a good reason for the high adoption rate of AI in eCommerce. It has a lot to offer eCommerce sites. 

1. Deepens customer loyalty

Through its ability to process millions of customer data points quickly, AI software can provide hyper-personalized experiences for shoppers, driving customer loyalty and higher cart totals.

eCommerce brands who offer personalized experiences see revenue gains between 6 to 10 percent. That’s up to three times faster than brands who don’t.

2. Helps you make more sales

Intelligent systems for eCommerce can personalize everything, improving your content and product recommendations. Product recommendations represent up to 31 percent of eCommerce revenue.

3. Lowers costs

Artificial intelligence tools for eCommerce aren’t free, but they significantly lower your staff costs and make previously manual processes much more efficient.

Take eDesk’s magic wand feature, for example. eDesk is a specialized eCommerce helpdesk, so it processes millions of customer service tickets every day. Using AI technology it’s able to use this data to identify the type of incoming query and suggest a suitable response. This means all users have to do is to click on the suggested response and they can resolve customer support tickets in an instant.

Rather than hiring more staff, sellers can simply increase their support capacity using eDesk.

4. Improves your data

One of AI’s big selling point is its data processing capabilities. Thanks to machine learning and natural language processing (NLP), artificial intelligence can gather, process, and spit out suggestions for a range of eCommerce needs, from product promotion to supply chain management.

That speed and insight translates to real revenue: eCommerce sites using AI enjoy 30 percent higher sales growth than those who don’t.

Related article: Are you Spending Too Much on Logistics?

5. Enables smarter marketing

Thanks to all that data, artificial intelligence can make eCommerce marketing more intelligent, too.

For example, with Google’s responsive search ads, brands can upload a handful of visual assets, headlines, and ad copy. Then, Google uses AI to test different combinations and determine which creative performs best for which queries, resulting in up to 15 percent higher click-through rates

Google AI powered ad copy suggestions
Google uses artificial intelligence to suggest ad combinations. [Source

How can online sellers use AI

Today’s eCommerce sellers are infusing AI throughout their business operations. Three key opportunities include customer service, inventory management, and product discovery.

Chat with shoppers

According to estimates from Gartner, chatbot use has grown from 2 to 25 percent in just the past three years. Chatbot technology unlocked 24/7 customer service and virtual personalized shoppers for eCommerce brands. These two functionalities highly desired by customers, but very costly to do manually. 

Chatbots use natural language processing to understand free-form customer questions and respond appropriately. They can be pre-programmed with responses that make them feel more human and fit an eCommerce brand’s voice.

eBay launched their eBay ShopBot in 2016. The chatbot helps shoppers find what they’re looking for, answering questions and providing product recommendations.

Shoppers can also upload a photo of something, and the ShopBot will search for products with similar images. The ShopBot remembers each customer it speaks to and personalizes future conversations based on that information. This exemplifies perhaps the most exciting thing about chatbots:  the more they interact with customers, the smarter they get.

eBay ShopBot
eBay ShopBot helps sellers to find what they’re searching for using artificial intelligence. [Source]

Related article: 14 Essential Hacks to Increase your eBay Sales in 2020

Smart inventory management

Good inventory management is a balancing act between stocking enough to meet demand without creating excess inventory. 

With AI inventory management, eCommerce sellers can toe that line with precision, using real-time data and smart recommendations. Artificial intelligence inventory systems track trends over time, allowing sellers to uncover seasonal sales trends, more accurately predict changes in demand, and better manage their supply chain.

Nicknamed “the Amazon of China,”JD.com is a massive eCommerce retailer that’s used artificial intelligence to grow its eCommerce operations in recent years.

In 2018, they opened their first automated warehouse, manned by only four people who use a fleet of drones and robots to fulfill 200,000 orders daily. By combining AI software with robot technology, they can automate much of their warehousing and order fulfillment processes. They use robots to stack, pack, and ship merchandise, drones to deliver it, and software to oversee inventory and demand. 

Artificial intelligence in eCommerce fulfillment software
JD.com opened their first automated warehouse in 2018.

Related article: What are the Biggest Online Marketplaces in the World?

Personalized product discovery

Artificial intelligence analyzes customer behavior across different systems and touchpoints, from your retail POS to your website. Using this data, AI tools for eCommerce can predict what products to recommend to which customers, when, and what marketing channel has the best chance of conversion. 

Amazon Alexa, and her friends Siri and Google Assistant, are prominent examples of AI-enabled product discovery for eCommerce. In addition to answering random questions about the weather or who starred in a Netflix show, these voice assistants track their owners’ shopping and search behavior, allowing the platform (Amazon, Apple, or Google) to surface smart advertising, content, and product recommendations to them. 

Amazon’s own recommendation engine, which delivers personalized recommendations based on a customer’s search behavior, accounts for 35 percent of consumer purchases on the platform. With Amazon Personalize, Amazon has made that recommendation engine available to eCommerce brands worldwide.

Amazon personalize

What AI software already exists for eCommerce businesses?

The market for AI software for eCommerce is growing. Here are a few options to consider for your eCommerce site:

Chatbots

Chatbots can provide customer support, product recommendations, and more. On Facebook Messenger, you can even have your chatbot push marketing content if followers opt in. 

Helpdesk Software

Artificial intelligence in eCommerce helpdesk software gives sellers a huge advantage when handling customer communications. As mentioned earlier, eDesk can suggest relevant responses based on insight from hundreds of millions of support tickets. It also will automatically assign tickets to the best suited agents, enhancing the effectiveness of your team.

eDesk customer service software

Email Marketing Software

Rather than manually developing all of your email drip campaigns, AI email marketing software for eCommerce can automatically send emails to your subscribers, with content and promo codes personalized to each recipient—optimizing subject lines and send times at the same time!

Related article: 20 Essential eCommerce Marketing Tactics for 2020!

Logistics

Machine learning can facilitate warehouse management and supply chain automation. AI warehousing software can use your sales data to determine the best time to schedule deliveries, how to package and send products, and when to reorder stock. This allows your business to work smarter, while lowering your logistics costs.

Related article: eCommerce Warehousing: Everything you Need to Know!

Image recognition software

Help more shoppers discover your store with visual search from Pinterest. Pinterest users can click an item in any photo they see online, and Pinterest uses image recognition software to serve up similar product images. Pinterest isn’t alone in using this technology (Google Lens, Macy’s, and several clothing retailers have also taken advantage of it.)

Image recognition AI eCommerce software
Pintrest’s image recognition software can help shoppers easily identify products they like the look of online. [Source]

Voice recognition software

Voice-activated smart technology can recommend products and content from your eCommerce store. Many eCommerce sites are marking up their website with schema to optimize for voice search. Others are creating Alexa skills, developing their own voice assistant (like Alibaba’s Tmall Genie), or integrating with other smart home products. 

Final words

In eCommerce, sellers should constantly be looking for marginal gains. Whether you’re chipping away at your operating costs, or enhancing your conversion rates, it all contributes to a healthier looking bottom line.

Artificial intelligence software for eCommerce is a great way for you to do just that. It takes manual tasks off your plate and help you to convert more effectively. Make sure your online store is utilizing the best software out there to stay ahead of your rivals!

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