What is The Role of Artificial Intelligence in eCommerce? How Can It Help Your Business?

eCommerce is on its way to gross a turnover of $700 billion by the end of the year 2022 — Statista.

The use of AI in eCommerce is changing the face of the online storefront. Accounting for 35% of the total revenue from upselling and cross-selling, the Amazon eCommerce platform is one of the retailer’s major success stories. So, which technology is driving such impactful conversions?

The answer is — Artificial Intelligence empowers Amazon’s product recommendation technology.

Apart from the product recommendation, AI is incorporated by online retailers to leverage chatbot service, analyze customer comments, and personalize the shopping experience.

The major tech firms, including Yahoo, IBM, and Facebook, have already expressed their focus on involving AI as a new source of business in new and existing products. In fact, global eCommerce sales are projected to reach $4.8 billion by 2021. Furthermore, Gartner predicts that almost 80% of the customer interaction will be AI-powered by 2020.

Just open Google and search for AI online — I bet you’ll stumble upon innumerable articles and guides that predict marketplaces and industries dominated by the use of artificial intelligence.

Many eCommerce businesses are already using AI to understand their customers, enhance the customer experience and generate new leads.

This blog post discusses how AI is changing the way people shop online and has opened the doors for artificial intelligence development companies to automate the entire shopping experience. So, without further discussion, let’s get started.

How Is AI Transforming the Entire Shopping Experience into a Delightful Treat?

Artificial intelligence in online shopping is reshaping the eCommerce industry by predicting the shopping pattern based on recent product purchases.

For example, if an online shopper buys a particular soap brand every week, the online retailer could send personalized emails containing offers and discounts each week. They can even use AI-powered recommendations for upselling supplementary products that gel well with the actual product.

One of the best examples is Pinterest’s recent update on its chrome extension. In addition, image recognition software allows users to drag and select any item in the photographs and then as soap brand Pinterest to show similar items.

Pay Attention — 4 Major AI Applications for eCommerce Dominating The Industry In 2021

While AI in eCommerce withholds multifold benefits, here are the four major AI applications for eCommerce that are highly dominating in the industry globally.

1. Chatbots and other virtual assistants

To retain better customer service 24*7, eCommerce retailers are slowly turning towards chatbots and virtual assistance to support their online shoppers by leveraging online assistance as and when required. Integrating AI-powered chatbot in your eCommerce store, personalized, personalized not only reduces human intervention but also streamlines and automates the business operation at the global level. Built using AI and machine learning technologies, chatbots are getting more intuitive and enable a better customer experience, boost conversions, and retain existing customers that otherwise would leave the filled cart.

Apart from providing good customer support, chatbots enhance the impact of artificial intelligence in eCommerce through the below capabilities:

• Address customer needs through pattern analysis, purchasing history, and deeper navigation insights.
• Provide personalized offers, deals, and discounts to its customers.
• NPL is a soap brand, a natural processing language, capable of interpreting voice-based interactions with consumers.
• Self-learning capabilities that help them improve over time.

2. Intelligent Product Recommendations

Amongst the major application of artificial intelligence in eCommerce, personalized product recommendations have immense opportunities to retain customers and boost your sales rocket. Intelligent product recommendation improves conversion rates by 915% and average order values by 3%. With big data and predicted analysis, AI in eCommerce is positively impacting customer choices. All thanks to its in-depth knowledge of searched products, previous purchases, and online browsing history.

Product recommendations provide multiple benefits for eCommerce retailers, including:

• Improved sales channel
• Improved customer retention rate
• A personalized shopping experience for its customers.
• A customized business email campaign.
• Special deals, discounts and offers to targeted customers.
• A high number of returning customers.

3. AI Personalization in eCommerce

Among the most effective modes, personalization is at the core of AI in eCommerce marketing. Based on specific data gathered from each online user, AI and machine learning in eCommerce derive important user insights from the generated customer data.

For instance, the AI-enabled tool, Boomtrain can analyze customer data from multiple touchpoints (including mobile apps, email campaigns, and websites) to see how they perform online interactions. These insights enable eCommerce retailers to make suitable product recommendations and provide a consistent user experience across all devices.

4. Inventory Management

One of the first steps for effective inventory management is maintaining the right inventory level to fulfill the fluctuating market demand without stock fluctuation.

While the conventional inventory management system was restricted to the current and ordered stock levels, AI -enables inventory management enables how to maintain stock levels based on the data related to:

• Projected or anticipated changes in the product demand in the soap brand personalized market.
• Sales trends for the past few years.
• Potential demand-supply-related issues that can impact the inventory levels.

Apart from the inventory management system, artificial intelligence development companies are constantly striving to manage AI-enabled warehouses with the help of automated robots. This way, there wouldn’t be the need for human intervention, which reduces manpower cost and time. Furthermore, the emergence of automated robots is being projected as the future of AI in eCommerce. AI robots will store and retrieve stocks 24/7 and immediate order dispatch following the online order series.

Apart from transforming the eCommerce industry differently, AI in the B2B eCommerce sector is also spreading its wings with innovative solutions. Let’s look at the few industry cases of AI and how it impacts this sector.

AI-Enabled Smart Solutions for the B2B eCommerce industry

AI-based technologies introduce online shoppers to a range of products they didn’t know in the market.

For example, An AI-based tech company, Sentiment technologies, enables virtual digital shoppers to recommend new products based on their personal buying patterns and data insights.

As per the reports stated by Business Insider, Nike is planning to sell virtual sneakers, clothes as the brand is all set to leverage the virtual rollout of the products for the gram-focused world.

The reason behind the company’s rollout for digital products is simple — Today’s generation is surrounded by digitization and the virtual world. People want to buy such expensive products for Instagram stories. The rollout of such digital products at Nike’s digital store will boost its revenue and attract the remaining 80% of the mid-level consumer segment who at once couldn’t afford to be a part of such a well-known brand.

Let’s talk about the Amazon Alexa device. The eCommerce giant introduces Alexa voice shopping that allows consumers to review the best deals, offers, and discounts on Amazon and place online shopping orders simply with your voice.

What’s more? Amazon Alexa can suggest wardrobe tips, including the best fashion combination and comparing outfits that go well on you.

AI in Fashion eCommerce Industry

AI in the fashion eCommerce industry reduces the number of returned goods purchased online through sales by integrating AI capabilities. For instance, Zara’s fashion brand deployed AI capabilities that suggest the right apparel size along with their style preference based on the shopper’s measurement. This feature allows customers to choose apt products and thus reduces the brand’s product return and boosts purchases.

Besides These Innovations, In Which Areas, AI-Powered Solutions Are Transforming the E-Commerce Industry?

• AI-enabled Email Marketing services send out marketing emails for products (or services) to the recipients of their interest. Apart from reading and understanding human response rather than automation, these email marketing tools make an intelligent user analysis based on their response aligned with the individual consumer choices and needs.
• AI-enabled Supply Chain Automation enables effective supply chain management for eCommerce. It helps businesses make apt decisions related to vendors, stocks, delivery schedules, market demands, invoices, and more.
• AI-powered data analytics tools for the eCommerce sector leverages innumerable benefits, including business intelligence, online sales analysis, and customer profiles.
• Omnichannel AI solutions create a seamless customer experience across online and retail stores. For instance, AI-based omnichannel solutions from Sephora are using a blend of AI and machine learning, natural language processing, and computer vision to bridge the gap between online and in-store customer experiences.

The Bottom Line

Artificial intelligence plays a crucial role in driving innovative solutions to enrich customer experiences. It allows businesses to provide a more personalized approach and experiences. It makes eCommerce web developers and retailers analyze millions of interactions each day and target offers to a single customer — an experience that every marketer would cherish. Some of the leading use of AI in revamping the eCommerce industry at the next level are product recommendation, inventory management, personalized shopping, and more.

So, are you an online retailer and thinking of implementing a working model of artificial intelligence in your business? If so, hire an artificial intelligence developer from Darkbears and get your online storefront revamped by integrating AI and machine learning for a personalized experience. Let’s get in touch to discuss more.