Artificial intelligence in e-commerce
Friday, June 21, 2019

Artificial intelligence in e-commerce

Author: Pavlos Tsulfaidis

There are numerous options for using artificial intelligence in e-commerce. We will show you strong and practical solutions which have been successfully implemented!

The most important goal of artificial intelligence in e-commerce is to better and comprehensively understand customers, generate new leads and provide an optimized user experience. Since e-commerce has become the most widely used way to purchase goods and services in the B2B and B2C sectors, SMEs are also investing heavily in using artificial intelligence to improve brand competitiveness and customer loyalty.

Moving on to the most popular applications of artificial intelligence in e-commerce:

Chatbots and AI assistants: They are an aid in answering customer queries. They are also used to provide product recommendations using NLP.

Clever logistics: Artificial intelligence automates delivery and storage processes.

Recommendation engines: Artificial intelligence analyses and uses customer behaviour on websites - many advantages for customers and online companies. It uses algorithms that provide information about which products customers are looking for; Amazon is a good example showing how well this works.

What advantages does AI offer in e-commerce today?

1. customer-oriented visual search.

Customers often become or have been disappointed during their online shopping tours, as the product results displayed are often irrelevant. To solve this central problem, AI uses natural language processing to narrow down the respective search results for online shoppers or to optimize them based on context. In addition, customers can use visual search functions as well as search and find matching products. AI also enables customers to discover complementary and relevant products and improve the overall shopping experience. For example, consumers can now take a photo of their girlfriend's desired shoes or new dress, simply upload it and use AI to find similar items through their online store. This sounds great and it is! The development by AI will always go on and on, to the benefit of e-commerce customers. This new option is particularly innovative, allowing customers to identify a product they like via photo and then generate the appropriate results. The goal is to deliver exactly the products which the customer loves and is looking for.

2. Realign potential customers and optimize the sales process.

According to statistics, at least one third of marketing leads are not considered by sales measures. This means pre-qualified and potential buyers who are interested in a certain product are simply not considered and are therefore lost. In addition, many e-commerce companies are overloaded with constantly growing and unmanageable customer data, much of which remains unused. And this is exactly where AI is a real necessity - and if used correctly, it is a great advantage. Artificial intelligence can help to improve the sales cycle. By tailoring problem-solving options while creating a strong advertising message, customers can be reached at the right time on the right platform. Especially in the B2B sector, this has become indispensable. Today there are many AI systems which enable NLP and voice input, e.g. Siri, Alexa etc. This enables a CRM system to answer customer questions, solve problems and even find new sales opportunities in a very short time.

A good example to illustrate this is an online shop for shoes: The intelligent image recognition automatically tags incoming goods based on the delivered product photos. A pre-programmed and individually adapted model forms the basis for this AI tool. This saves time and effort, while using a very powerful and specialized process.

Cloud technologies such as Cognitive Services of the Microsoft Azure Cloud (machine vision) are used here, with which content in images and videos can be precisely identified and analyzed. Smartstore uses all these services with great success.

3. New level of personalization

There are many remarkable AI solutions. One of them is the Microsoft Azure AI platform mentioned above: This allows us to analyze different aspects of how customers interact online: Via mobile app, internet, email, e-commerce, etc. The Microsoft Azure AI also monitors all devices and channels to create a universal customer view. So not only one channel is considered, but all channels. And of course, it helps e-commerce merchants to provide their customers with a seamless shopping experience across all platforms. As a result, it enables relevant messages to be sent at the right time.

4. Chatbots and virtual assistants

E-commerce is also strongly focusing on the individual user experience and service-oriented conversation when shopping. The use of artificial intelligence through the use of so-called "chatbots" is only one way to successfully develop communication with the customer in the age of "conversational commerce". In practice, it is even more than that, because chatbots can automate ordering processes, for example. They are also low-cost and effective ways of providing 24/7 customer service, allowing you to collect valuable data and analyze customer behavior. With a chatbot, e-commerce websites are able to effectively increase conversion rates by customizing the online experience for the consumer. Chatbots can save more than $8 billion each year until 2022. Again, one of the best known and most successful examples is Amazon's virtual assistant, Alexa. Here, own products are combined with ever new products from other manufacturers. Such virtual assistants are expected to have an impact on the purchasing behavior of customers and to expand the range of products offered by e-commerce retailers in a creative and customer-oriented manner.

5. Improve recommendations for customers

Taking a closer look at this important advantage again: Artificial intelligence enables companies to predict customer behavior and interest more intelligently and efficiently, and thus offer directly relevant and helpful product recommendations. Companies like Starbucks use AI to analyze the data collected and generate personalized recommendations. The algorithm takes customer information, personal preferences, purchase history, third-party data and contextual information into account.

6. Filter fake reviews and strengthen real reviews

One problem is the increasing number of fake ratings for online retailers and e-commerce businesses. In a study, 90% of respondents said positive online ratings influence their purchasing decisions. However, 86% of those surveyed stated that negative online ratings influence their purchasing decisions. As it is generally known, there are many fake reviews published by competitors, haters, bots etc. This is often a big problem, not only for pure online shops. But how can AI solve this problem? Today, many e-commerce companies use artificial intelligence to combat such unwanted fake customer reviews by deliberately placing emphasis on verified and helpful reviews. Amazon, for example, uses AI to counteract fake product reviews and the increase in fake high star ratings. This AI focuses and strengthens the authenticity and relevance of verified customer reviews.

7. Automatization

AI does not mean robots take over complete control. Many people are concerned that in the not too distant future everything will be done by robots. But this is an exaggeration. These "robots", however, offer online retailers the opportunity to use intelligent technology and algorithms to deliver exactly what the customer wants at the time of his search. As companies in the e-commerce industry generally continue to expand, and this also means a growing number of customers, increasing automation is becoming a must and at the same time a key investment priority for e-commerce companies. As e-commerce business grows, so does the number of repetitive tasks. This is exactly what robots can do; all the steps from publishing new products on different channels to planning sales, discounts for loyal customers, etc.

Artificial intelligence in e-commerce: a conclusion

As shown by the examples described above, AI is on the rise in the e-commerce industry, with development progressing steadily and ongoing optimization being the aim.The primary goal: e-commerce companies should continue to improve their AI tools to better meet market requirements and customer expectations. In doing so, they also work together with other companies in order to share AI expertise and develop more sophisticated solutions. Artificial intelligence in e-commerce is already influencing product search, transactions, customer loyalty and satisfaction, efficiency and much more. Artificial intelligence is changing the way people buy and sell online today.

With Smartstore, you too can profitably use artificial intelligence in your e-business.

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