10 Powerful Ways AI is Being Used in eCommerce

Artificial intelligence (AI) has become more prevalent in many corners of our society. No longer just reserved for sci-fi enthusiasts and doomsayers, AI is a very real technology that is having an impact on dozens of industries.

One area that has been especially affected, is eCommerce. With the help of AI, many eCommerce businesses have become more profitable, efficient, and streamlined than they previously thought possible.

First, here’s a brief introduction to this revolutionary technology.

What is Artificial Intelligence – Evil Rising? Or a Vital Tool?

Artificial intelligence, in its simplest description, is the endeavor in which a machine is ‘thinking’ as a human.

For decades, pieces of cinema and literature have made us squirm in our seats when they depict an AI uprising of dystopian proportions.

Although there is an argument for this, it seems far more likely that the rise of AI will lead to a loss of jobs rather than a race war between humans and robots. This could have negative impacts in the short-run, but none so catastrophic as the fall of the human race.

Philosophically, AI is a fascinating topic. Arguments and theories from both sides are plausible and worthy of discussion. Many experts struggle to even agree on what defines intelligence in the first place. If it is just rational thinking, or the ability to understand complex algorithms and theorems, then machines are already leaps and bounds in front of us.

No matter where you stand when it comes to AI, there are some very real use-cases for this technology. E-Commerce as an industry has been rapidly implementing AI to great benefit.

Below are 10 ways AI is being used by eCommerce businesses to drive traffic, increase profit margins and streamline processes.

1. Chatbots & Customer Service

Due to advancements in technology, chatbots have now received widespread adoption across eCommerce platforms. When they were first developed, chatbots’ ability to hold realistic conversations and be of service to customers was negligible.

Nowadays, they deal with up to 85% of customer interactions — sometimes with greater results than that of their human counterparts.

Chatbots have also been highly beneficial to eCommerce businesses, which have the economic advantage of being able to remain open for business 24/7. With no need for rest, AI chatbots are able to provide unparalleled customer service. In doing so, they also free up time for human workers to deal with issues that require different modes of thinking.

2. Sales Forecasting

Because AI can analyze and build detailed customer profiles, it can provide businesses with accurate sales forecasting. This valuable data can then be used for budgeting and improving marketing efforts.

AI accurately ‘scores’ leads, by sifting through enormous volumes of historical and real-time data. Using this information, it then identifies individuals marketing teams can target for a higher chance of a conversion.

Predicting sales success with AI is becoming standard practice within the eCommerce industry, as it provides businesses with a roadmap they can follow to ensure growth.

3. Predictive Marketing

Accurately being able to place the right product in front of the right person has been the modus operandi for any marketer since the beginning of time. With the invention of AI, this has been made possible.

In conjunction with the advent of the internet, AI can now utilize predictive marketing to pinpoint businesses’ target demographics to a tee. No more displaying billboards in the hope that a potential client or customer passes it. AI has made it possible to display even the most specific of advertisements to its intended target.

By using customer data, AI can now predict what a customer is likely to buy. If they have been searching for a specific type of product, this technology can now place ads for that exact product in front of them on their mobile device. When used efficiently, predictive marketing can drive sales and boost conversion rates massively.

4. Sales Automation

Companies are beginning to understand the potential impact machine learning services and AI can have on their sales processes. According to a Gartner survey, 37% of businesses have implemented AI in some form. This figure is rapidly rising too, with figures showing a 270% increase in AI adoption in the past 4 years.

Automating sales by employing AI technology dramatically reduces back-end man-hours for human workers in eCommerce businesses. Freeing up this time allows these workers to now focus their efforts on more customer-facing endeavors. This has the potential to super-charge sales and marketing teams’ abilities.

5. Enhanced Cybersecurity

Costing online businesses up to $57.8 billion in 2017, fraudulent activity has been one of the greatest threats to the eCommerce industry. Business owners were faced with the monumental task of defeating this foe. Luckily, there has been an effective solution.

To protect their business from eCommerce fraud, companies began enlisting the help of AI.

With the ability to analyze millions of events simultaneously, AI adds a strong layer of defense against phishing attacks and malicious code uploads.

As this technology is designed to learn over time from each event, it actually becomes more resilient to future attacks – much like a human body to a virus it has defeated previously.

6. Voice Search Optimization

Today, voice searches account for up to 50% of online searches. This has led eCommerce businesses to race to integrate AI technology into their processes, making sure their products and services have been optimized to be found this way.

Technology such as the Echo Dot, Google Home, Alexa, Siri, and other voice command devices have been skyrocketing in popularity — the Echo Dot alone is predicted to be in 10% of American homes as of 2019.

Once again, AI’s ability to analyze and record consumers’ search history and behavior makes it a valuable asset for eCommerce businesses looking to drive sales.

7. Managing Inventory

Managing inventory, particularly across multichannel eCommerce platforms, is a tricky task. The room for human error is massive, leaving the door open for financial risk.

This is where AI really comes into its own. This technology can accurately analyze and process volumes of data that would normally take humans years in mere minutes. In a world where the words ‘time’ and ‘money’ are interchangeable, effective inventory management has been revolutionized by this technology.

Furthermore, machine learning’s ability to forecast customer behavior can mitigate against stock issues in the future. Providing businesses with accurate reports will allow them to plan inventory replenishment, as well as preventing overstocking and understocking.

8. Crafting Copy & Content

Taking predictive marketing and customer service to a whole new level, AI technology is now being utilized to write content and effective marketing campaigns. Less developed in these fields of creativity, AI still has a way to go, but its early signs in this space are encouraging.

Perhaps the most exciting aspect of this development is the doors it opens for businesses to even more accurately target their consumers. Consumers could be shown personalized copy designed by AI to sell them a product.

For example, Customer A and Customer B both purchase the same dress from an eCommerce store. Customer A was shown a product description that was better aligned to the data AI had collected on him/her previously. Because Customer A has purchased items before which were specifically “environmentally friendly and made with sustainably sourced materials” this aspect of the product was highlighted to him/her.

Customer B’s previous behavior, however, indicates that they are more influenced by price. AI would craft copy that reinforces how this product has a temporary price reduction, despite being made of usually more expensive material.

9. Effective Retargeting

By monitoring where users are spending their time on eCommerce platforms, AI can effectively retarget consumers upon their subsequent visits.

If a person spent 70% of their time looking at iPhone cases when browsing phone cases – AI will not display cases more suitable for Samsungs when attempting to retarget this consumer. Instead, they will be presented with the best-selling iPhone cases.

AI can also distinguish between genuine shopping (highly likely to convert) and window shopping behavior (just browsing). Combining with deep machine learning technology, AI can look at a customer’s previous purchases and present them with relevant products and advertisements.

10. Removing Fake Reviews & Fraudulent Activity

90% of customers read reviews before purchasing from or visiting a business. This has made eliminating fake and fraudulent reviews left by bots or competitors a top priority for many eCommerce businesses.

Advanced AI can detect anomalies in writing style and formatting, helping identify reviews that may not be genuine. One AI tool developed by Harvard and MIT was able to pick out almost 75% of fake reviews in test conditions, performing better than human testers.

Being able to mitigate against this damaging practice, eCommerce businesses can now present a truer consumer consensus to prospective customers.

The Bottom Line

AI has been muscling into the eCommerce industry for the last decade. Its ability to make businesses much more efficient has made it extremely attractive to the industry. Moving forward, we shouldn’t be surprised to see it push even more boundaries in the world of online trading.