25/09/2017
Artificial Intelligence in eCommerce
What is Artificial Intelligence in eCommerce?
eCommerce or Electronic Commerce is purchasing of goods and services in exchange for money using internet powered gadgets like mobile, tablets, laptop and computers.
Artificial Intelligence helps you to get to know your customers better and customize your ecommerce platform to give your customers personalized shopping experiences encouraging sales and conversions. It is adding intelligence to the way consumers shop online. AI creates personalized experiences in online shopping. It also provides assistance in buying and selling via the internet.
With changing times, tides and technology eCommerce has grown to be omnipresent across smart devices and product niches. Even though AI is relatively new, it is revolutionizing the e-Commerce industry like never before. Self-learning automated systems are learning to replace human functions.
Growth of AI in E-commerce
Artificial Intelligence is changing the way e-commerce is operating by offering new ways of analyzing Big Data, helping retailers to engage with their customers on a different level, in turn, creating better customer experiences.
Today, personalization is the important focus areas in eCommerce. Personalization is performed by studying the consumer behavior and doing predictive analyses. This is done by performing analytics on the vast amount of data collected from user activities on personal gadgets.
Artificial Intelligence is applied on eCommerce platforms, for better customer engagement. The customer segmentation strategy is understanding a customer’s age, gender, demographic etc before you communicate with customers. This helps in collaborative filtering and predictive recommendations to increase sales conversion and grow eCommerce platforms
Impact of AI on E-commerce
AI is helping grow sales and optimizing various areas of eCommerce like pricing to demand planning.
Pricing
The markets have become more competitive and prices of products have to change frequently based on market dynamics. AI using complex learning algorithms to solve this problem by continuously assessing dynamics of the market and competitive environment.
Inventory Planning
AI is identifying key factors that impact velocity of orders and inventory requirements. Over time learning system get smarter and accurately predict the inventory needs.
Assortment Management
Advances in AI is helping in an assortment of products like which products to add and which products to discontinue.
Key areas in which e-commerce is getting transformed by the application of Artificial Intelligence are as follows
Visual Search and Image Recognition
Visual Search and Image Recognition is a feature that enables users to discover what they want at the click of a button. All one has to do is, take a picture of what one likes and put it on the search bar of the eCommerce platform. The engine would then search through all the possible matches, rank them and prioritize them before placing the options before the user.
Product Recommendation
Product/Services Recommendation is widely practiced by eCommerce companies to help the customer find close to what they are looking for. Recommendation algorithms work in multiple ways.
For example,
Amazon.com provide the recommendation to users based on past activities and purchases.
Netflix recommends DVDs with customer’s interest in the category like drama, comedy, action etc.
eBay collects user feedback about its products which is then used to recommend products to users who have exhibited similar behaviors.
And this continues to evolve with several permutations and combinations in place.
Data Analysis
Artificial Intelligence helps in understanding all types of unstructured data around your customers.
Cognitive Insights (i.e. Videos, Images, text) - understand companies, brands, products, people at a deep, meaningful level for advertising. Even though 80% of world’s data is unstructured, companies are able to gain visibility into areas like sentiment analysis, concept expansion, relationship extraction, personal insights etc.
Behavioral Insights - understand how a consumer feels, what they say and who they are - Interest, values, attitudes, feelings, hobbies.
Future trends of AI in E-commerce
Wearable Technology
Wearables like AppleWatch, FitBit has the capability to collect data like what products each person view, gather data on your taste based on what you like and buy from current e-commerce platforms. AI will be applied on the data collected and recommendation will match each individual's taste.
The AmazonGo will revolutionize your shopping experience by going cashless with your wearables will play a new role in checkout less shopping experience.
Google Glasses could take the shopping out of mobile and computers to a google glass optimized e-commerce store.
Augmented Reality
With Augmented Reality technology help shoppers visualizing the look and feel of the products for their desired spaces. This is helping people who are planning their home decor, office spaces, etc. Applying this AI, more companies will offer their customer more visual shopping experience.
Virtual Reality
Virtual Reality technology will help create the sensory experience of your personalized virtual e-commerce stores.
Facial recognition
Facial recognition is now being used to capture customer’s dwell time if you look at a product for a certain amount of time and that information is stored and used upon your next visit.
The ultimate goal of every eCommerce company is to bring to the online space, the best of an offline shopping experience, by offering the consumers a seamless way to discover the products they are looking for. Artificial Intelligence is reshaping eCommerce industry by providing sustainable customer service and will control our lives for good. AI is opening up a myriad of opportunities in the eCommerce industry.
