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The Growth of Artificial Intelligence in eCommerce

Artificial Intelligence (AI) has become an essential component for effective trade and commerce. It helps businesses to learn more about their customers, better adjust their goods and services recommendations, improve their shipment services, increase marketing efficiency, and much more. In 2020, marketers rated AI among the top 5 digital marketing tools, and in France AI is widely implemented in Big Data processing and chatbot technologies for their online retail trade since 2019.

Many eCommerce businesses are heavily investing in AI to stay on top and provide the most outstanding customer experience to their buyers. In this article, we’ll share some examples of how AI can be used in eCommerce and how various businesses are already implementing AI to enhance their services.

How AI Is Used in eCommerce

Let’s have a look at the most notable improvements AI can offer small and large eCommerce businesses.

Smart Search and Recommendations

AI technology is becoming more flexible and adaptive to human thought patterns. Often, when customers search for certain products they tend to type in item names incorrectly. AI solves this problem by offering users keyword hints so that they can choose the needed products faster by just clicking on the appearing options in the search bar. This way, businesses can make their products more visual to their customers as users learn what else they can search for on their websites.

benefits of artificial intelligence in ecommerce

Besides the adaptive search bar, AI also improves product and service search by learning how people look for the items they need. Intelligent systems in eCommerce investigate which items people buy together, what adjectives and synonyms they use to search for products, and other product-relevant information. As a result, AI can offer customers the things they really need, shortening their search time.

As AI creates data sets about each item, it can expand its findings and gather information on brand followers. Similar audiences will mostly prefer the same products. By investigating products and audiences AI attempts to understand users’ search intent rather than words and suggest the most suitable items.

Personalized Customer Approach

Personalized customer experience is one of the most frequent reasons why eCommerce businesses apply AI. It helps companies to deeply analyze their customers’ experience and how they interact with the brand, making brand-customer communication more personalized.

For this, AI analyzes the history of customers’ visits and what they are doing at the moment and starts to predict what users want to see and buy. Therefore, marketers can enhance their interaction with the customers, using various approaches. This can be an email with special coupons, congratulations on their birthdays, and gifted discounts, suggesting what other visitors or celebrities choose to buy.

There are a variety of ways of how AI can strengthen business-customer connections. It just needs to analyze customer data and provide businesses with possible improvement patterns.

Chatbots and Virtual Assistants

Many businesses empower their services with chatbots and virtual assistants that rely on AI technology. All of them can be used for enhanced product search and customer support.

ai use cases in ecommerce

Customers can use chatbots and virtual assistants to look for the items they need in human-like conversations. For example, they can ask Alexa for advice or recommendations and come up with the best purchasing decisions through a discussion. The main difference between a chatbot and a virtual assistant is that chatbots are usually developed and offered by a company, while virtual assistants are standalone solutions that need to be built into a company’s app.

Chatbots are widely used in eCommerce and are aimed at providing services from a certain business. A well-conceived chatbot can ask many questions before giving detailed answers on how to solve the issues related to the service.

Enhanced Delivery Options

ECommerce AI tools help customers choose the shortest and cheapest delivery routes. For this, they automatically calculate items’ DIM weight and choose the best shipping method. They also can offer customers additional delivery options and adjust the delivery dates according to their needs. Besides that, as the items are shipped, customers can track their orders in real-time or switch on the delivery notifications that will be sent to their emails or via push messages.

Improved Inventory Management

Intelligent systems in eCommerce help businesses to better arrange their inner workflows. A wide range of companies use AI to improve their inventory management based on demand forecasts. By analyzing inventory levels and the history of purchases, AI can predict sales. This way, businesses better adjust their budgets, ordering only the items in demand and improving their warehouse management, preventing product long-term storage and expiration of supply items.

ai in ecommerce

Fraud Detection and Risk Mitigation

Digital frauds and cybercriminals are attracted by quickly developing industries that involve large budgets and eCommerce is one of them. According to PwC’s Global Economic Crime and Fraud Survey 2020, there were 47% of companies that experienced fraud in the past 24 months, and the number is only expected to grow. That’s why many businesses are already using AI to mitigate fraud risks.

Intelligent eCommerce systems help businesses to monitor customer account activities and effectively reveal suspicious users, preventing possible frauds. They track user’s changes in emails, phone numbers, passwords, addresses, define large fraudulent patterns and trends, and predict fraud in many cases. This makes the lives of scammers and cybercriminals much harder as they take time to develop new fraudulent schemes but the AI systems reveal and adapt to them quickly.

AI-Enabled Smart Solutions for the eCommerce Industry

Various businesses use AI in their daily work. Here are some prime AI use cases in eCommerce:

  • AI in fashion eCommerce – AI helps clothes retail industries to mitigate the number of returned goods purchased online by suggesting customers appropriate clothes sizes based on their measurements and adjusting recommendations to their style preferences;
  • AI for voice shopping – using voice assistants, customers can place their shopping orders online with their voice; besides that voice assistants can read the world-known eCommerce sites like Amazon to review the best daily deals;
  • brick-and-mortar shopping with AI – with a smartphone in their hands, customers can visit brick-and-mortar retail stores and get additional information on the products by scanning their labels or taking a picture of a product;
  • AI-enabled digital shoppers – some eCommerce companies develop their own virtual digital assistants which recommend new commodities to e-shoppers; they help customers learn about the variety of products and assist them in picking up new looks based on their preferences;
  • email marketing with AI – AI-enabled email marketing apps compile and send emails with products and services based on customer preferences; by performing a deep user analysis, AI systems can suggest the goods that align to individual customer needs and, depending on their responses, adjust their future offers.

Conclusion on AI in eCommerce

Artificial Intelligence has a broad implementation in eCommerce. It helps companies to personalize their customer approaches, improve their inner workflows, and create innovative ways on how to surprise and satisfy their customers. As a result, eCommerce businesses can keep a competitive edge in the market, attract more customers, and gain increased revenues.

Author Bio

Victoria Puzhevich Lead Business Development Specialist
Victoria has over 15 years of experience in IT, keeping track of the current and future trends in the sphere, sharing expert advice and relevant industry experience.