Artificial intelligence is the meaning of the human brain. It already targets all the sectors in our day-to-day life. Similarly, eCommerce has become popular in the recent past. Chatbot, recommendation engine, virtual assistant, and natural language processing of the application of AI in e-commerce. Email filtering and detection take the business to a new dimension. This article will discuss various artificial intelligence applications in industry, their possibilities, challenges, and benefits.
Why AI in e-commerce?
In the year 2020, during the pandemic time, we have seen a crisis in every sector. But at that time, artificial intelligence was the boss in every industry. From manufacturing to product recommendations everywhere, we can see the touch of AI. Especially in business, the contribution of AI is not worth mentioning. However, here are some reasons why we will use AI in business.
1 . Improve customer experience
Many eCommerce businesses are already using the advantage of artificial intelligence for a better customer experience. In research, it was found that AI has hit $4.9 trillion in trade in 2021. It learns from data and makes predictions regarding the choice of customers.
2. Work as a virtual personal assistant
A virtual personal assistant is having somebody who never sleeps. You can compare it to a chatbot. But VPA is smarter than a chatbot. Moreover, it works 24/7 and gives you the latest update on your organization. Research is shown that virtual private assistants can grow your business by up to 31%. This virtual assistant is the contribution of artificial intelligence.
3. Predictive marketing
Nowadays, customers love to buy products from social media like Facebook and Instagram. Social media is based on artificial intelligence. You can see a lot of product recommendations on your social media wall. However, it tracks your social media status, chat, likes, comments, and shares. Based on your data, it implements predictive marketing on you.
4. Personalisation as a game-changer
Your business data will be in your hand when you embed artificial intelligence. AI will analyze data on its own. Based on the personal profile, it will send a targeted email, recommend the most relevant product, and suggest liking on the chatbot. Ultimately personalization will be the game changer for your commerce business.
5. Do business in a real-time
Almost 67% of e-commerce businesses have chatbots. It allows users to chat in real-time. So your business will never be offline. Your customer service department will become more vibrant and resourceful. Chat WhatsApp approximately 8 billion dollars per year.
6. Optimised search
AI optimized search is the fighter application of AI in e-commerce. It comes with the preference of the customer and predicts customer needs. So every AI expert recommends implementing an optimized search for eCommerce businesses. It will make you stand out from others.
7. Social listening
Social listening makes your business a win-win situation. This application tracks the conversation on social media networks. Moreover, it extracts the key phase and commands based on your life. You may think that it’s a type of monitoring, but it can be the best way to improve your business.
8. Fraud detection and prevention
The biggest threat to eCommerce business is fraud transactions. Intelligence is the white tool to detect and prevent all fraud activities. When you embed AI in business, it can easily track fraudulent transactions. So your business will become more trustworthy and safe.
9. Location-based intelligent
In the age of globalization, you can do business from any part of the world. Your eCommerce business has no limit within its geographical boundaries. But all the products are not required everywhere. Moreover, artificial intelligence finds the actual requirement for any geographical arena and tracks the performance. So pricing and quality measurement become easier.
10. Dynamic pricing
If you have medium to large eCommerce, adjusting all the prices becomes troublesome. The dynamic price in artificial intelligence capability can reduce the Hassle of setting manual pricing. It can define the price based on your provided data. So, eCommerce and ai is interrelated.
Application of artificial intelligence in e-commerce and use cases
AI can help retailers optimize customer experience and decorate their websites based on embedded artificial intelligence systems. IBM and Facebook have already declared to develop artificial intelligence systems for business as a new eCommerce paradigm. The acquisition of DeepMind by Google clears the story regarding the future of AI applications in the industry. The business organization is growing aggressively with competition, and AI plays a vital role with updated technology. Here are the 20 use case examples of artificial intelligence in eCommerce.
1. AI in voice search
People are now relying on voice assistants like Google Assistant, Alexa Siri, Cortana, and Bixby. They like to buy products or voice search. All of the household applications are being converted to AI-enabled systems. Research shows that 75% of us will own a smart speaker in 2025. It will generate approximately $35.5. so there is an excellent chance of doing business with artificial intelligence.
2. Visual search for the seamless online shopping experience
Almost 69% of young online customers are willing to purchase products through visual search. A picture is worth thousands of words. You usually see any product and match it visually with your brain with the product. Similarly, if the eCommerce website allows you to search visually, your time and effort will be less. Finding the actual product will be easier.
3. Chatbot for 24/7 support
The chatbot is an example of a Narrow AI system. Almost 67% of eCommerce businesses are now offering chatbot services. It saves $1.3 trillion every year by answering customer calls. The chatbot agent can search 24/7 without wasting human resources. An AI-enabled personal assistant is capable of answering all the questions of your business. Shopify ai, Facebook product page, and octane ai Shopify at the perfect example of artificial intelligence chatbots in eCommerce.
4. eCommerce product recommendation systems
recommendation systems is one type of narrow AI. E-commerce generates revenue approximately 12% higher with its product recommendation systems worldwide. It yields 5.5 times higher sales than any non clicking business. Here we can see the application of machine learning in eCommerce. It shows the filtered product that customers can buy. The K-nearest algorithm and leaned factor analysis were used to find the best possible outcome.
5. eCommerce AI Product Description Generator
In your E-Commerce application, you may have thousands of products. It is challenging to write the product description of a thousand products. The eCommerce AI product distribution generator will help you to register for yourself. It will save your time and money and generate a suitable product description.
6. Image tagging for image recognition
The world of business is based on images. Social media like Pinterest users are well acquainted with image tagging and image recognition. Moreover, it allows you to tag any pictures and find similar items. The image tagging software brings a revolutionary change in the eCommerce world.
7. Collaborative filtering technique
The collaborative filtering technique is another application of artificial intelligence in business. It filters out the items based on your reactions to similar products. It can be user-based or item-based. Collaborative filtering is a recommendation engine to recommend relevant data regarding any product.
8. Personalised search
Every customer is unique. The differences in choices and likings are also notable. So it is vital to show accurate results based on your personality. The personalized search shows accurate results based on your previous data. It saves your time, and the eCommerce organization gains more relevant sales.
9. Handling customer data
eCommerce business generates a large amount of data. It is impossible to optimize all the data manually by any human. Artificial intelligence captures all of your business data and generates the workable inside for the stakeholders. Since data is money, it becomes the greatest asset of your business.
10. Recommendation engine
You have already seen Amazon, eBay, and many other eCommerce applications. Because of machine learning, the e-commerce recommendation engine has become more accurate. Best on your past behavior, transaction capacity, purchase history, and product browsing, it recommends the most suitable product. You may need to spend several hours to find similar products if you do it manually.
11. AI in inventory management
eCommerce business mainly depends on inventory management systems. The inventory system has several costs like holding costs, depreciation, and wastage. Artificial intelligence provides correct insight and recommends the correct doing based on the product age, value, price, supply, and demand.
12. Cyber security for eCommerce
Machine learning and artificial intelligence have contributed to stopping fraudulent activities in a commerce business. A thousand transactions occur every day. Cybercriminals and hackers are making traps to gather the personal transaction details of customers. With the help of various algorithms, machine learning stops all of those fraudulent activities.
13. Fighting fake reviews
Almost 97% of people read online reviews before purchasing any product. 87% of them trust the study. So, an online review is vital to drive leads to sales. AI is capable of detecting fake reviews for correct purchasing decisions. The machine learning algorithm quickly detects all fake reviews and marks them as spam.
14. Customer relationship management
Since 2017 self automation has become a prosperous trend. Today many eCommerce organizations are running their business for Excel or Google sheets. The CRM system makes a revolutionary change in customer support, product delivery, and sales follow-up. Embedding AI creates a new dimension of the eCommerce business.
15. Combating counterfeit products
Many big organizations are facing counterfeit problems. It is an unauthorized product by any other third-party company. If your organization has any trademark products, you can file a lawsuit against any other product producer. Artificial intelligence can vigorously fight against any other website to detect your branded product.
16. Sales improvement of eCommerce product
AI can generate more sales by forecasting eCommerce business. Best on the historical analysis provides insight into supply for desired demand. The manager can develop any strategy based on the insight. Moreover, it also shows the updated latest trend of business to beat the competition.
17. Identifying prospective customers
Getting actual customers is very challenging for small eCommerce businesses. The implementation of artificial intelligence can get more customers for your business. The system will capture all the data and provide you with a shortlist of possible customers. You can make a direct call or send them an email for further negotiation.
18. AI in marketing and sales application
According to the research data of Demandbase, AI can generate 59% better sales, increase 58% revenue, improve 58% website traffic engagement and finally convert 52% sales leads. So without any doubt, you can implement AI in your eCommerce.
19. Self-checkout systems
Almost all eCommerce applications have self systems. But the customers are afraid of unpopular eCommerce sites in terms of check-out payment. There may be any chance of fraudulent activity. The application of artificial intelligence in e-commerce will ensure trustworthiness in your business.
20. Pricing optimization
An essential thing in any commercial business is real-time pricing. The customer visits a dozen websites before any transaction. To get an advantage in dynamic pricing, artificial intelligence can help you to set prices. In this way, you will get a competitive advantage over your competitors.
Which AI Algorithm Should I Use for an eCommerce Business?
In our traditional E-Commerce system, machine learning is widely used. Based on the captured data, it recommends through a recommendation engine. K-nearest neighbor and collaborative filtering algorithm are used for recommendation engines. Moreover, Amazon operates the A9 algorithm to display the results to customers. You can make an AI dashboard for further decision-making.
Should I use AI in my business?
If you want to get a competitive advantage then your competitors, you must use artificial intelligence for your business. Already 37% of business organizations implement AI in their business. Approximately 90% of leading businesses invest in AI technology. It is a significant concern that 85 million jobs will be eliminated because of AI technology. However, the hope is that 90 million new jobs will be created by 2025.
How should I use artificial intelligence in my retail eCommerce?
Big eCommerce websites are already using AI in their business. As a retailer, you also can take the opportunity of having AI. You can deploy advanced semantic-based search, AI-assisted product recommendation system, and chatbot for a better customer experience. Moreover, virtual assistant sales forecasting will help you make the perfect decision for your retail business. Cyber security enhancement and different algorithms will help you fight against fake reviews.
How Can Visual-AI Improve Ecommerce?
According to the research report of the US Department of Commerce, eCommerce and virtual commerce both contributed a lot to modern business. Image recognition is widely used to influence visual commerce for getting expected outcomes. Image classification, finance appropriate content, and augmented reality contributes to identifying fakes.
How does AI marketing leverage the innovative technology for eCommerce?
The AI can provide better insight than any manual analysis. Cu, in terms of marketing customer feedback analysis, customer experience, and sentiment signals, customer satisfaction service are some standard tools of AI in the marketing field. Natural language processing, business intelligence, and customer relationship management become very general to all technology experts. Artificial intelligence improves customer satisfaction, creates and offers new products, and develops new markets for the business. Content personalization, predictive analysis, and targeting decisions leverage tools to improve eCommerce business.
How does Amazon use e-commerce?
When we think about the eCommerce business, the reference to Amazon comes first. It mainly uses two types of use cases for eCommerce businesses. The first is a personalized product recommendation that recommends products during the purchasing process after checking out. The second one is Alexa-enabled voice shopping which provides a hand-free shopping experience.
What are the important AI tools for eCommerce business?
To grow in the eCommerce business, artificial intelligence is a must. We already know chatbots and recommendation engines, but there are many other AI tools for expanding the eCommerce business. You can increase user experience with Tup e-commerce, choice.AI, and B12 tools. Granify, Personaliv, and PriSync tools will ensure predictive pricing and incentive. For marketing and analytics, you can use Wacul-AI and NeoWize. Finally, for visual search, ViSense and Cortexica are excellent AI tools.
AI in eCommerce is not new, but tools and applications constantly change. Moreover, AI and e-commerce are interrelated. This article has tried to show some ai in e-commerce examples and case studies. However, if there is anything that I missed, please inform us through comments.
Nasir H is a business consultant and researcher of Artificial Intelligence. He has completed his bachelor’s and master’s degree in Management Information Systems. Moreover, the writer is 15 years of experienced writer and content developer on different technology topics. He loves to read, write and teach critical technological applications in an easier way. Follow the writer to learn the new technology trends like AI, ML, DL, NPL, and BI.