Artificial Intelligence (AI) is gradually taking over every aspect of life. Many believe that AI is a recent addition to E-commerce. However, research shows that AI has always existed in E-commerce since the year 2000. Back then, it was limited, and it consisted of basic automation like grammatical error detection, spell check, auto-correct… etc. Today AI in e-commerce has significantly advanced, and we will be discussing what AI is and how it benefits E-commerce today.
What is E-Commerce?
E-Commerce means Electronic Commerce. Simply put, E-Commerce is buying and selling through the internet. E-commerce depends on technology, websites, networking systems, social media platforms, media apps, and digital platforms to perform transactions.
What is AI?
The full meaning of AI is Artificial Intelligence. AI is the process of creating machines from vast volumes of data. Systems learn from past knowledge and experiences and perform tasks based on what they have learnt. AI also tends to do Human-like activities through computer systems. It enhances the speed, precision, and effectiveness of human efforts.
If you’ve ever purchased an item online you may have interacted with a customer support bot or an ad that seemingly suggests items that match your purchase history this is made possible through AI. AI has been integrated into the E-commerce system over the years. Just this year, an estimate of over 4 trillion people have engaged in Online shopping. It is undeniable that AI has many benefits to the E-commerce industry, and we will be considering a few of these benefits below.
Benefits of AI to The E-Commerce Industry
There are numerous benefits of AI to the E-commerce Industry. Some include:
1. Virtual Assistance and Voice Commerce
Virtual assistants are chatbots that can be found on most platforms. They use Natural Language Processing (NLP) to understand and answer inquiries from users. They offer adequate support to users and offer options that may fit their needs. A common example is Google Assistant, Apple Siri, Alexa… etc.
Chatbots are available 24/7 and they can process information faster and easier, providing results within seconds. They can perform tasks such as researching products, organizing inventory, collecting valuable data and recording customer behaviour.
Most people prefer Voice commerce. Being able to simply speak rather than typing is easier, faster and more convenient. Additionally, it caters to the needs of a wide range of audiences including those with impaired vision, or even those who may have issues with language barriers, turning them into loyal and valuable customers.
2. Personalization of customer’s Experience
Personalization in the E-commerce industry is the process of generating online shopping experiences that will suit the needs of each customer, considering their different tastes, preferences and interests. For example, when you view certain products, AI may run automated ads or emails, providing a personalized list of these products.
The software can analyze data and get familiar with specific trends based on customers’ behaviour, therefore providing recommendations that would best suit them.
Personalization in E-commerce helps retailers to deliver an effective and smooth customer experience on various platforms.
3. Automation
AI allows online stores to now be available 24/7 throughout multiple networks and platforms. Automation helps retailers to save time, energy, and capital.
With Automation, retailers can perform all tasks, simplifying the workflow of the business. As an E-commerce business grows the repetitive pattern of activities becomes more hectic, shifting the burden of these repetitive inquiries to chatbots and voice assistants will make it easier to focus on more complex issues in the business.
4. Smart Search
Customers tend to use the search bar to find visual representations and information about the product they want on an E-commerce app or website. Finding the exact product they want can be a hassle even after typing in the keywords of their search.
This is where smart search comes into play. Smart search is also known as “Searchandizing” which connotes merchandising and search in one word. Searchandizing uses methods like recommended products, navigations, auto-complete, previous or recent searches and other features to offer a more personalized and resourceful search experience through the customer’s behavioural data.
5. Creates Effective Marketing Campaigns
With AI, marketers in E-commerce can generate campaigns and adverts that relate to their target audiences. By using AI, marketers can enhance their campaigns through AI report generation and can key into more advanced levels of efficiency, effectiveness and engagement.
6. Stock Management
By using AI in stock management, E-commerce marketers can narrow down their activities and increase customer satisfaction by gathering valuable insights, developing new strategies and being able to foresee product demands.
AI also accurately analyzes demand patterns, detects shifts and changes in customer behaviour and considers locations. This helps in minimizing the risk of overstocking and understocking, therefore, minimizing cost and enhancing efficiency.
7. Fraud Detection and Prevention
Unfortunately, this is an inevitable issue in E-commerce. Fraud activities in the E-commerce industry take forever to detect manually, sometimes it’s not even possible to detect it at all and even though they may succeed in detecting some simple cases of fraud, they may make mistakes and errors along the way.
With the help of AI, the detection and prevention of fraud are made easier and can be done more accurately. As mentioned previously, AI tends to function by gathering data on personal customers' behaviour. AI also functions by detecting anomalies. An AI analyzes certain behaviours that are common amongst the majority of users and even individual user accounts. So, if a certain user’s behaviour seems risky or suspicious, the AI may deem it fraudulent and will act accordingly.
There are countless benefits to AI in the E-Commerce industry. Possibly even far more than its disadvantages. As years go by these benefits may multiply, giving advanced and more countless possibilities in the E-commerce sphere.
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