Daunted by the idea of using AI in ecommerce? Don’t be! There’s a strong possibility you already use artificial intelligence on your online store and don’t even realize it.
Thankfully, you don’t need to be a technical mastermind to reap its benefits. With the right solutions, you (and your shoppers) will hardly notice it’s there. Don’t let its discreet presence fool you. AI has the power to dramatically improve the shopper experience and subtly guide customers straight to checkout.
Read on for a quick’n’easy guide to get the most out of artificial intelligence in ecommerce.
First Things First, What is AI?
Put simply, artificial intelligence (AI) is the simulation of human intelligence by machines. Programmed to perform specific tasks, AI is behind much of the technology we use every day – from predictive text to your phone’s Face ID.
In the context of ecommerce, you should be familiar with two terms:
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Machine Learning (ML)
A specific subset of AI, machine learning analyzes data to improve the performance and accuracy of predictive technologies over time.
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Natural Language Processing (NLP)
Another branch of AI, NLP refers to the ability of a computer to interpret and understand human language, and respond accordingly.
If the technical definitions seem complicated, don’t worry. All you really need to know is how it applies to your ecommerce store, and why it’s beneficial for your shopper experience.
How Common is AI in Ecommerce?
Artificial intelligence has become mainstream in the ecommerce industry:
- An estimated $40 billion of additional revenue was driven by AI in retail in one three-year period.
- 35% of ecommerce marketers have already implemented AI technologies, and 38% have plans to do so.
- When asked which technologies will most improve the online customer experience, 34% of sales and marketing leaders said AI.
- 63% of consumers already use AI tools without realizing it.
- Its global market is expected to grow from $4.8 billion in 2021 to $31.1 billion in 2028.
AI is not only commonplace in online retail, it already drives enhanced shopper experiences and increased conversions. If you haven’t yet deployed artificial intelligence on your store, you could be missing out.
What Role Does AI Play in Ecommerce?
Let’s dive in. Here are four of the most common real-world applications for artificial intellegence in ecommerce:
1. Product Recommendations
Personalized product recommendations leverage AI to track and analyze the behavior of individual shoppers. With this data, the technology displays hyper-relevant suggestions based on unique preferences and purchase history. Whether it’s tailored search and merchandising results, or product recommendations across your website and emails, AI equips you to effortlessly personalize the entire buyer journey.
PEARL iZUMi recommends products based on previous shopper behavior.
2. Site Search
Intelligent site search solutions rely on AI in the form of natural language processing. Also referred to as semantic search, this technology is able to interpret a variety of search terms and serve up results that reflect the intent of the query. For example, NLP can distinguish between a search for ‘black shoes’ and ‘black shoelaces.’ A more basic solution, on the other hand, might produce a mismatched assortment of shoe-related results for both search terms.
Hat Club uses synonyms to ensure searches for “cap” returns results for “hat”.
3. Customer Service
By providing instant resolutions to common queries, ecommerce chatbots reduce customer service labor costs while delivering a seamless support experience. Thanks to machine learning, chatbots also become more accurate and intelligent as they interact with your shoppers over time. In many cases, customers don’t even realize they are interacting with a bot instead of a human.
4. Logistics and Forecasting
AI can be used to forecast product demand, update inventory requirements, and even anticipate shipping delays. As with other AI use cases, it all comes down to analyzing real-time data, predicting outcomes, and taking action without the need for manual intervention. Given ongoing supply chain disruption in ecommerce, artificial intelligence can alleviate many of the recurring logistical headaches faced by retailers.
Searchspring reporting and insights data.
Get Started with Intelligent, Personalized Shopping Experiences
AI has the power to completely transform the online shopping experience with minimal input from your ecommerce team.
To harness the benefits of AI on your online store, you need a personalization solution that delivers intelligent recommendations, search, and merchandising, all in one easy-to-use platform.
