E-commerce is no longer just an alternative business platform to the traditional brick and mortar store. For many businesses, it’s gradually become the primary channel for generating sales. Yet, the drive toward e-commerce has also meant growing intensity of competition. There’s constant pressure to deliver services smarter and faster.
This pressure is giving impetus to artificial intelligence (AI) as a tool of business that makes the collection, organization, analysis and storage of data more efficient. We look at some of the ways AI is changing the e-commerce space.
The Internet of Things (IoT) is the next revolution in interconnected computing. IoT takes the Internet well beyond its traditional setup that involved bringing together servers, desktop computers, laptops and more recently, smartphones.
Many everyday objects are now connected to the worldwide web. These include refrigerators, air conditioning, televisions, home security systems, motor vehicles, smartwatches and printers. For ecommerce, this means that before purchasing, customers are giving ever greater consideration to the intelligence of a product and how it interfaces with their existing gadgets.
In the early days of ecommerce, the only means customers had to get in touch with the seller was through a contact form, email or phone. These were later joined by live chat services. One of the main challenges of these avenues of communication especially for budding startups is cost. You need to hire people to ensure customers are responded to in time.
Chatbots are changing all this. Some enquiries are fairly common so it makes sense to program a bot with the answers thereof. Chatbots have become so intelligent and personalized that many website visitors are often unaware that they are communicating with a bot and not a real person. Websites can now offer 24-7 support without bloating their staff count.
Customer Relationship Management
One of AI’s greatest strengths is its ability to analyze large volumes of data. In the past, the practice of customer relationship management entailed collecting huge amounts of data that a designated employee would sift through when they eventually had the time. Identifying trends, drawing conclusions and making predictions was a tedious process that relied on spreadsheet formulas and macros.
AI tools are far more effective at consuming customer data, churning reports on past behavior and predicting future action including what a customer is likely to buy next. The data includes visitor activity logs (which could be aggregated by tools like Papertrail), highest selling products, peak days and times, products attracting the highest number of complaints etc. AI can give precision to digital marketing efforts.
AI’s predictive power is making an impact on the practice of inventory management. Any ecommerce entity that is in the business of selling tangible goods knows how much of a headache inventory management can be. Maintaining the right balance can mean the difference between running a sustainable business and getting bogged down by cash flow problems or stock shortages.
Inventory management isn’t too difficult for small enterprises. It however takes on profound complexity for larger businesses. Planning is often based on hindsight. With AI, managing inventory is more dynamic and predictive. Businesses can use machine learning to anticipate future demands and align their inventory accordingly.
Nearly all of us have at some point come across an image that fascinated us but whose origin was unclear. Perhaps it’s something we are interested in buying but without more details about where the image is from, we may not know where to find it. Reverse image search is making this a thing of the past.
Made popular by Google’s reverse image search, such AI tools have made finding the original source of an image easier by reading, classifying and interpreting images. As opposed to going on a blind quest to find the item, reverse search will redirect customers to the exact ecommerce site where the image was sourced from.
Overall, AI is redefining e-commerce by transforming how businesses cater to the interests and needs of consumers.