7 ways that AI improves ecommerce in 2020

Artificial intelligence, once a buzzword with huge promises but little practical value, is redeeming itself as a powerful tool in many real-world situations. In niches throughout areas like ecommerce, AI can automate procedures, provide good recommendations, and even improve marketing.

Unlike traditional software, AI—particularly machine learning—uses statistical modeling and clever algorithms to learn from and replicate human behavior. As a result, it can solve problems that are unfeasible with both humans and regular software. Plus, as computers become ever more powerful, AI takes advantage of these improvements to deliver more useful and human-like behavior. 

All sorts of technologies, ranging from logistics robots to email marketing, take advantage of artificial intelligence in ecommerce. 

1. Chatbots

Even if ecommerce chatbots won’t pass for humans anytime soon, they make it possible to sell and support products in an automated way. Chatbots can answer questions about products, offer multiple configurations, and solve simple issues if they arise after purchase. 

According to a 2018 Drift survey, over a quarter of UK consumers would be willing to purchase a basic item from a chatbot. As more people get comfortable with modern technology and ecommerce, this number is expected to rise.

Although ecommerce-related chatbot technology is in its infancy, the potential uses for this technology are significant. Given that most customer service requests are simple and can potentially be answered by a chatbot, ecommerce chatbots could save companies money and provide customers with a more seamless experience. 

2. Recommendation engines

Major ecommerce sites like Amazon are famous for their AI-powered recommendations. After browsing a few listings, Amazon will offer a huge number of similar products and products that customers bought together. This technology is no longer exclusively in the realm of mega-companies; AI is now easily accessible to entrepreneurs and smaller businesses through most ecommerce platforms. Whether through Magento plugins or a custom service, AI-generated recommendations are available to any ecommerce business today. 

The primary advantage of using a recommendation engine is increasing the likelihood that customers purchase multiple products. Like the “impulse buy” items that supermarkets put near the checkout area, recommendations can encourage customers to purchase an additional product that goes well with the other products in the customer’s browsing history or cart. 

3. Smart logistics

The fulfillment side of ecommerce is another ripe area for technology like artificial intelligence. Companies can optimize the layout and organization of their warehouses, implement robotics, and automate manual processes. 

As with recommendations, this was largely spearheaded by super-large-scale online retailers, but it has become more accessible over time. Warehouse robotics might be too expensive for smaller companies, but for those that ship thousands of packages a day, this kind of technology saves tons of time and money. 

Process automation doesn’t have to involve AI, but it can be made more robust and efficient by incorporating smarter software. As online retailers scale up their businesses, AI, robotics, and other cutting edge technologies for fulfillment and logistics make more sense. 

4. Customer-centric search

Despite the prevalence of recommendation engines, most ecommerce users start looking for products from the search bar. Providing good-quality search results that take into account the users’ intentions requires some clever technology. Artificial intelligence can help here too. Instead of simply searching for keywords, modern ecommerce search engine backends use AI to categorize products and provide customized search results. 

Dozens of extensions to popular ecommerce platforms like Magento offer intelligent, highly relevant search results. Ecommerce stores also frequently add additional metadata to listings for the purpose of increasing search relevance. Smart AI combined with the right data can increase conversion rates and customer satisfaction. 

5. Multi-device personalization

Today’s consumers rarely browse the web from only one device. When making buying decisions, a customer might start browsing on their phone and later make the transaction from their laptop computer. Although analytics and advertising platforms are smart enough to track users across devices, many smaller companies don’t have the troves of data required to make this happen on their own. AI can help here. By finding telltale signs, it can correlate multiple browsing sessions to the same user. 

Ecommerce platform plugins, third-party APIs, and other services offer this functionality. However, to make the most of this new data source, companies need to already have a recommendation engine or some other part of their storefront to personalize. 

6. Integration with virtual assistants

Smart speakers, smartphone digital assistants, and other voice-activated AI solutions are increasingly popular ways for customers to interact with the online world. This includes purchasing products through ecommerce sites. Owners and employees of ecommerce-focused companies can stay ahead of the competition by embracing these new ways to communicate and access technology. 

Both Amazon’s and Google’s smart speakers allow companies to create “skills” or “actions” that let users interact with third-party software. This gives ecommerce companies the opportunity to make their own integrations that customers can use to purchase products. 

7. Direct marketing

Direct email marketing should not be one-size-fits-all. Nowadays, most ecommerce platforms allow site owners to put customers into different categories based on data like their purchase history. AI takes this further by automatically sending tailored emails to customers. Customers who have purchased expensive goods and required little support might get one version of a newsletter, while those who purchased less-expensive products get another. 

When emails are sent out, opened, and read, a wealth of data is produced. It’s the AI’s responsibility to use this information to better market to customers based on their interactions with existing emails. Those who immediately delete messages without reading them should receive less volume, whereas those who click on nearly every link probably appreciate more frequency. 

What’s next?

As technology improves and becomes even more accessible, AI offers huge potential in digital storefronts. From good recommendations to smarter marketing, the opportunities of artificial intelligence are endless. Entrepreneurs looking for how to start an ecommerce business will be happy to find that many applications of AI are now accessible to businesses of any size. 

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