Over 90% of the top companies are investing in AI development, and 25% of businesses have already integrated AI into their management and marketing operations. Given how fierce e-commerce competition is, entrepreneurs are allocating resources to tools that can give them an edge.
Companies that are unable to quickly adopt new innovations and trends face sales drops and a lack of online traction. Hence, if you want your online store to thrive, you too should invest in modern technologies such as AI-driven tools and programs. Read on to discover the benefits of artificial intelligence in e-commerce.
What Is AI?
These systems use disciplines such as machine learning, deep learning, natural language processing, and speech recognition to accurately analyze user behavior patterns and continuously improve.
From the virtual assistants in your phone to the smart systems placed in robots and autonomous vehicles, AI can take many forms. Furthermore, modern AI systems are being utilized in multiple industries including healthcare, transportation, banking, entertainment, and e-commerce.
What Is E-commerce?
Electronic commerce or e-commerce refers to the sale and purchase of products in the online space. These products include both tangible and intangible goods and services. It also includes any form of a commercial deal made through the internet. Moreover, e-commerce covers digital money and data transfers needed to carry out online transactions.
The global number of internet users has reached more than five billion. With such a huge influx of users, it’s not surprising that the e-commerce industry has gained a revenue of over $5.7 trillion in 2022. However, this increase in demand has also led to market congestion. For your business website to stand out and remain competitive, you’ll need AI support.
Benefits of AI in E-commerce
AI systems can provide a plethora of benefits for your online store and digital payment solution. These systems will not only help your platform gain traction but they will also contribute to keeping it safe and secure.
Virtual Sales Associates
Whether it be in a physical or digital store, ensuring that your customers get a good shopping experience is crucial. Satisfying online customers is more challenging since there’s no human sales associate that can quickly come to their aid if they have problems or queries.
However, thanks to advancements in AI technology, you can now integrate chatbots into your e-commerce platform. Chatbots are AI-driven automation tools that can mimic human communication, giving them the ability to seamlessly interact with online customers.
These bots can instantaneously answer customer queries about relevant matters such as your products, sales process, and the status of their orders. Modern chatbots have become so reliable that over 40% of businesses use them for marketing and sales purposes. Moreover, 80% of consumers who use chatbots report having a positive experience.
Intelligent Search Box
Once a user visits your site and starts perusing your products, there’s a good chance they’ll make a purchase. However, an internet user’s average attention span is only around eight seconds, so they’ll sometimes use your site’s search box to find what they’re looking for. AI can make your search system smart, which can help increase sales and conversion rates.
Smart search is an AI-enabled tool that assists customers in finding their desired product. It uses a mixture of marketing practices and AI disciplines such as machine learning and natural language processing. Smart search gives your users access to features such as autocomplete searches, faceted navigation, and recommended product listings.
By using smart search, you can cater to your customers’ short attention spans and give them a quick preview of the products they want or need.
Personalized and Targeted Advertisement
Customers want a shopping experience that is tailor-fit to their needs. Over 90% of consumers say that they are more inclined to buy from a company that accounts for their preferences and provides relevant offers and product suggestions. Hence, if you want to generate more leads, use AI in e-commerce and give your viewers a personalized experience.
AI can study site visitors’ online purchasing patterns and analyze their interactions with various content. Using this data, the AI system can develop a custom-fit marketing campaign for each visitor. This includes sending targeted advertisements.
AI can also automatically send emails and other electronic correspondences that advertise products and services that prospective buyers are likely interested in. It can likewise feed specific promotional materials to the users’ social media channels. This form of targeted marketing has helped around 15% of consumers find new brands, purchase incentives, and discount sales.
Boosted Online Visibility
Online visibility is important to any e-commerce platform. Without it, your online store will not generate traffic, leads, and sales. To be visible, your platform must incorporate search engine optimization (SEO) practices such as proper keyword utilization and content posting. However, it can be difficult to constantly and manually monitor the latest keyword and topic trends that yield high searchability.
AI makes SEO optimization easier by doing all the heavy lifting. Using machine learning and data analytics, the AI system can determine what words and phrases your target market uses when looking for relevant products and services. It can also identify the topics that gain the most traction, allowing you to easily know what content you should publish on your website.
If you don’t want to make the content yourself, a highly-intuitive AI system can use the data collected to generate advertisement materials that contain the right subject and keywords.
Fraud Detection and Avoidance
Online fraud was responsible for around $41 billion of e-commerce losses incurred in 2022. Moreover, users tend to steer away from companies that get defrauded or subjected to other security breaches. This is alarming, especially for small and medium-sized businesses that cannot afford huge income and market losses.
Fortunately, you can use artificial intelligence in e-commerce platforms to bolster online security and safety. AI’s machine learning capabilities can make fast and real-time transaction assessments and flag suspicious dealings.
The system does this by assigning a hash value for the genuine commercial dealings done on your e-commerce site and using those values to create reference patterns. A hash value is a digital fingerprint used for data identification and authentication.
Once a deal deviates from the established hash value pattern, the AI will block it and report it to you for further inspection.
Expansive Data Gathering
In the modern age, knowledge is power. This holds true even in e-commerce. You must have a lot of information about your target market to know what they want, pique their interest, and convert them into customers. AI can help you gather customer data efficiently and accurately.
AI can monitor and analyze customer interactions in your e-commerce platform. It does this by using sentiment analysis. This is a tool that detects users’ positive and negative sentiments about a particular topic or product. It allows you to know your market’s overall impression of your products and make necessary changes to boost customer satisfaction.
Moreover, AI can provide location-based customer data. It will gather information about the place of transaction, allowing you to apply location-specific strategies that can yield high conversion rates.
24-Hour Virtual Assistance
Human secretaries are excellent at organizing schedules and providing updates. However, they can’t provide you with constant assistance since they eventually have to sign off or take a leave. Moreover, they are susceptible to human error, which is responsible for 75% of data loss and almost 60% of service downtimes.
Meanwhile, an AI virtual assistant never stops working and can provide accurate results consistently. While popular AI assistants like Siri and Bixby can’t provide the e-commerce support you need, there are domain-specific AI assistants.
These AI systems are designed for specific industries such as e-commerce. These implementations can give you a reliable update about your website’s status, sales ratings, market fluctuations, and many more. Furthermore, since these systems have machine and deep learning capabilities, they improve over time. Some iterations of AI assistants have even reached an accuracy level of 98%.
Predictive Marketing
There are around 24 million e-commerce websites worldwide, with all of them fighting for sales and market shares. Hence, you have to play like a general and foresee all market possibilities to stay ahead of the game. An AI system with predictive marketing support can give you the advantage you need.
Predictive marketing allows you to anticipate your target audience’s future purchasing decisions based on gathered buying behavior and demographic data. This data is gathered by AI from multiple digital platforms such as social media channels and your e-commerce site.
With this tool, you can make early preparations and changes to your product and service lineup. Moreover, predictive analytics and targeted advertising can help you make alluring offers to your prospective customers ahead of other e-commerce platforms.
Less Repetitive Workload
Managing an e-commerce platform requires doing routine and tedious tasks on a daily basis. This kind of workload can overwhelm and demotivate your team, especially since around 22% of an average worker’s time is spent on repetitive tasks.
If you want to lessen repetitive workloads and boost overall productivity, apply artificial intelligence in e-commerce management. AI can handle all routine tasks such as sending emails, making reports, responding to customer queries, and scheduling marketing campaigns. Moreover, AI can accomplish these tasks simultaneously and faster than any human counterpart. These systems can even perform more complex tasks like data analysis better than less experienced employees.
By letting AI handle the routine workload, you and your team can spend more time and energy on important tasks such as organizing marketing events, creating promotional content, and conducting consumer research. With AI integration, you can boost overall business productivity by up to 40%.
Improved Customer Retention
To grow your customer base, it’s not enough to attract new clients. You should retain your old ones too. However, this is not easy to do. The average customer retention rate in the e-commerce industry is only around 30%.
To maintain client support and engagement, you should incorporate AI systems into your e-commerce management strategy.
AI can seamlessly deliver targeted promotions to your previous clients through online mediums such as social media channels, emails, and third-party networks. This integrated advertising process is called omnichannel marketing, and it can increase customer retention rate by 10% to 15%.
Moreover, AI computer vision identifies the behavioral patterns of your previous customers and determines their most viewed or purchased products. This will allow you to implement effective strategies like push notifications to bring them back to your e-commerce platform.
Adaptive Product and Service Pricing
Most consumers take price into account when making an online purchase. That’s why 73% of online stores consider price changes as a crucial part of market competition, with top retailers changing their prices every three minutes on average.
The products and services you sell in your e-commerce platform must be competitively priced. However, value fluctuations brought by shifts in supply and demand can be hard to constantly monitor. Moreover, manually changing the prices can get tedious, and determining the right amount to put in requires a lot of research.
Certain AI implementations have a pricing optimization feature. The AI system can automatically change product prices and set discounts based on current supply and demand trends. Its calculations are based on price data it gathers from multiple sources. New data is constantly gathered, so the prices can be regularly updated too.
Efficient Inventory Management
Pricing your products competitively will not give you an edge if you’re already out of stock. Proper inventory management ensures that you always have an adequate supply of in-demand products. However, managing your product stockpile can get harder, especially as the number of items being sold in your e-commerce platform increases.
Modern AI systems have inventory management features that can help you maintain ideal stock levels. These systems base their product quantity recommendations on established sales trends, projected demand trajectories, and current market supply levels. AI can likewise provide real-time tracking of products, orders, and deliveries.
AI’s contribution to e-commerce stock management does not end with software support. Robots and machines with AI integrations can also help in storing, retrieving, and collecting stocks in your physical warehouse. Unlike human workers, AI-powered autonomous hardware can function indefinitely without tiring. Moreover, just a couple of these machines are enough to manage your stocks, thus helping you save on personnel costs.
Streamlined Sales Process
An e-commerce platform has a lot of moving parts, and the sales process can get quite tedious. This can be an inconvenience not only to you but also to your customers. Around 90% of U.S. consumers consider fast and efficient service in deciding whether to transact with a business or not.
The more streamlined your sales process is, the more competitive your e-commerce site will be. AI can help you accomplish this by automating several aspects of your sales process.
First, AI chatbots provide prompt and accurate answers to customer queries. The AI system can also offer product suggestions based on past customer behavior, allowing your clients to make quick yet informative purchase decisions. AI makes delivery more efficient through constant product tracking.
Moreover, AI constantly studies user behavior patterns and can make continuous suggestions on how to further improve your sales process.
Final Thoughts on AI in E-commerce
The e-commerce industry is huge, and competition is fierce. To maintain your edge, you must incorporate modern technological solutions into your e-commerce platform.
From providing dependable virtual sales associates to reducing repetitive workloads, there are several benefits of artificial intelligence in e-commerce. If you want to know more about AI and modern digital business solutions, visit our website.
