It’s 2020, and e-commerce is booming like never before. It is estimated that by the end of the year there will be more than 2 billion online shoppers. Thus, brands will have to explore new ways to connect with users and process more orders than ever. Businesses will look for powerful innovations with scaling possibilities. And Artificial Intelligence can respond to these challenges.
The combination of AI technology and e-commerce businesses allows for the automation of internal operations, reaching more customers, and leading to the company’s growth. In this blog, we’ll examine how Artificial Intelligence enhances the user experience and leads to better service quality, overall.
10 Ways of Using AI to Better Understand Consumers
The key benefits of Artificial Intelligence in e-commerce work to enable a stronger connection between businesses and their customers. Owners can analyze their customers’ behavior, decisions, preferences, and guide them to more relevant deals. Buyers can contact brands directly and receive 24/7 assistance. Let’s take a look at the ten most common ways that AI enhances a customer shopping experience.
AI analyzes search results and excludes potentially irrelevant pages. It also memorizes user behavior and determines whether the contents correspond to a particular set of user needs — like Pinterest’s image search tool that uses image recognition algorithms to analyze a particular picture and find similar products on the web.
AI can use natural language processing to understand slang, idioms, typos, and keywords, accordingly. Users will be able to provide a precise description of what they are looking for and get specific results. This is especially valuable in online shopping since many users don’t know exactly what they want to buy before they actually see the product.
AI-based product searches are built upon the analysis of customer behavior, interactions, and purchase and browsing histories. Artificial Intelligence uses clustering and classification to define categories, to which particular words belong.
If a user is looking for a bag, the search can also offer backpacks and purses, expanding the search area. It can also make the search more precise: if a user typed ‘bags’ but is clicking only on backpacks, AI will focus on that product category.
Identifying target audiences
The process starts with gathering data about the customers — browsing history on a website, age, interests, location, etc. AI processes this data into tangible insights, grouping customers into categories. An example of this is Mintigo — the research tool that uses AI to better understand consumers.
Artificial Intelligence helps to identify digital safety risks. So, instead of human experts having to look through terabytes of data, smart algorithms can analyze data, make safety measures, etc. — performing these and many other functions simultaneously.
This is incredibly valuable for e-commerce platforms that need to protect the financial and personal information of their customers. If there is a security threat and the team cannot manage to react in time, the company will risk putting all this sensitive information in jeopardy. AI, on the other hand, can act as a first defense line, eliminating the threat immediately and without human supervision.
Artificial Intelligence allows business owners to provide a highly-personalized experience across all communication channels. Companies can use AI engines, like Boomtrain, that analyze the differences in users’ behavior on desktop and mobile platforms and suggest design or feature improvements.
AI can also connect the actions on all devices by remembering visitor history. For instance, a user can browse a catalog up to the fifth page on his mobile phone. If he decides to switch to a desktop system, AI will remember his progress back from the mobile app and transfer it over. He will be transferred to the page that he last viewed on the device without a need to start the search over again.
Social media integration
One of the main AI opportunities for e-commerce retailers is smart social listening — a research practice that collects brand mentions all over social media and processes them into actionable insights. Businesses can learn what customers are saying about them in real-time and introduce improvements, based on these insights. As a result, end-users will know that their opinions are heard and taken into account.
AI-based email marketing and support
Artificial Intelligence offers a lot of benefits to email marketers, from automation to efficient monitoring. The end clients will experience these benefits even more: AI can select relevant emails, measure user satisfaction levels, and adapt the email body text to customers’ preferences. Let’s take a look at how artificial intelligence helps e-commerce with email marketing.
- Setting up the best timing by analyzing statistics on letter opening. Subscribers can receive letters when they are most likely to check their inbox. Brands won’t disrupt their clients in inconvenient times, but instead, reach out when the clients are ready to engage.
- Offering personalized product suggestions and discounts. AI can retarget customers who left the website without checking out by offering a call-to-action that takes them back to their cart. If a customer left the store while browsing a certain product category, he can also receive a reminder email.
- Answering questions. Human employees have days and hours off, but AI can work continuously. Customers will always be able to reach out to support teams and receive answers immediately.
Virtual personal shoppers
Since new users often experience difficulties when navigating through online stores, an AI-shopping assistant can provide them with information on presented products, delivery details, and website navigation.
This is how e-commerce companies are using AI for virtual online shopping: in 2016, IMB created a smart AI shopping assistant in partnership with Macy’s, a global department store. Macy’s stores use artificial intelligence in e-commerce to understand customers’ questions, analyze on-site behaviors, provide answers and suggestions.
Many online buyers have irregular buying patterns, getting more active in holiday seasons and during specific occasions. This makes their buying behavior unpredictable — business owners never know when the demand for a particular product might spike. As a result, some products don’t get enough attention, whereas others are quickly sold out, preventing future buyers from acquiring those items.
The out-of-stock problem can be saved with predictive AI-based sales analysis. Artificial Intelligence can analyze the purchase patterns, conversion statistics, online shopping behavior, and predict trends for the next few months based on these patterns.
One of the best examples of AI-based predictive sales tools is Tenzo — a smart sales prediction tool that allows for the forecasting of inventory changes and ordering products that are soon to run out. By analyzing purchase data from previous months, it creates insights for future months and quarters, so customers can be sure that needed products will always be in stock.
Detecting fake reviews
Artificial intelligence for e-commerce can increase website transparency in communicating with customers by using technology for fake review detection. AI uses advanced language processing algorithms, where it is taught to compose fake reviews.
This process is then reverse-engineered — the AI uses the same technology to detect fake reviews. Once the AI is capable of faking reviews, it also gets deeper insights into differentiating fakes from the real ones.
This technology was also used by the research team from the University of Chicago. AI analyzed Yelp reviews and used machine learning to improve its recognition abilities.
To implement AI in e-commerce, business owners need an experienced tech partner with AI and Machine Learning expertise. Preferably, this should come from a team with the expertise of implementing Artificial Intelligence both in web and mobile development.
Our development team can customize inner operations, like shipment, warehouse and inventory management, logistics, payments, and tailor your ERP and CRM systems. We are ready to bring innovation to your end-customer by implementing Artificial Intelligence, Data Science, and chatbots.
AI is already implemented in e-commerce by major and small businesses alike. Google, Amazon, Microsoft, Facebook, and IBM have presented multiple AI projects for online shopping and e-commerce, and startups are following the lead. By the end of this year, more than 85% of customer interactions will likely be managed without human assistance.
Seeing how accessible Artificial Intelligence innovations have become, building AI-driven platforms became easier than ever. It’s a cost-efficient way to offer an improved customer experience to the clients, providing increased personalization and continuous support.
Contact us to let AI do the heavy lifting and daily operations for you, while you can focus on business development!