Artificial Intelligence in the Ecommerce Industry and How It Transforms the Future of Brands

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Have you ever asked yourself, “How does Google know what I want?” Well, at first this may sound odd; but in fact, Google has this system that analyzes your online patterns. Learn more about AI in ecommerce and unveil the “magic” that it features!

What is Artificial Intelligence?

First coined in 1956 by Marvin Minsky and John McCarthy, the term artificial intelligence (AI) is defined as the ability of a machine to perform tasks linked with rational beings. Through the gathered inputs, machines are able to learn patterns needed to perform human-like tasks.

The years that followed saw AI gaining the spotlight in 1997 when IBM’s Deep Blue beat world chess champion Garry Kasparov after a six-game match. This event has become a crucial breakthrough in the growth of the AI system. Today, AI is used in many complex fields, such as advanced web search engines, healthcare, and ecommerce.

man using mobile phone with digital chatbot

How AI Brings Change to the Ecommerce Industry

Due to the effects of the COVID-19 and growing technology, the future of ecommerce has become astounding. Based on a Statista report, the retail ecommerce sales constitute about 4.9 trillion US dollars worldwide in 2021. This figure is expected to grow by 50% over the next four years, reaching about 7.4 trillion dollars by 2025. Hence, many websites today use AI systems to improve end-to-end operations.

With the rising demand for online shopping and online streaming, the battle between ecommerce apps has become tougher than ever. So, to gain more market leads, firms have used AI to learn and provide what the audience wants. McKinsey & Company report states, “35 percent of what consumers purchase on Amazon and 75 percent of what they watch on Netflix come from product recommendations based on such algorithms.”

Through the data mining and the input that users provide with every click and web visit, the system was able to create unique online user experiences. Every output is custom-made for each person. This makes it very helpful in ecommerce, for it mimics the human touch that can often be missed in an online setting.

Benefits of Using AI in Ecommerce

Here are the perks that online sites could reap from using AI systems:

1. Better Audience Targeting

Businesses can perform better ad targeting with the help of AI systems. With the help of deep learning advances in the field, the system can provide an audience group who could relate to a product or service. With this, brand campaigns could achieve higher chances of success than aiming at diverse audience clusters.

2. Smart Search

At times, users view a website without knowing exactly the product or item that they need or want. With the help of AI systems and proven online search practices, shopping sites are now listing autocomplete forms, relevant queries, and recent searches, among others. These AI systems could help the users find what they need and convert them into actual buyers.

AI in ecommerce includes the use of voice searches

3. Personalized Recommendations

Another perk that AI systems offer is their ability to create unique products or services list tailored for a user. The advanced system transforms gathered data from previous clicks, searches, and purchases to learn buying patterns. Hence, showing the right products or services in search engines just when you needed it. This system adds more value to users and marks up sales and user retention over time.

4. Smooth Process Automation

Aside from user benefits, the AI system also proves itself as a valued asset for business owners. Instead of putting out resources for menial tasks, data management services can be used to automate things that need low-level support. This may include email blasting or chat auto-response.

5. Improved Sales Processing The AI system not only helps before and during the sales process but also handles after-sales and abandoned carts. Online shopping sites could use this advanced system to follow-up left carts and send emails to the user.

AI Use Cases in Ecommerce

  1. Chatbots — Running a business 24/7 may need added manpower that may issue large costs for startups. But with the help of AI systems through chatbots, sites could provide online support at any time. In return, it improves the response time of the merchant or a brand for a lower cost.
  2. Voice Search — For users who love to multitask, voice search is the way to go. This cool and smart AI feature allows users to search and shop using voice commands. In 2014, Amazon released Echo, a voice-controlled service assistant. Google also released Google Home which allows users to shop online without typing.
  3. Visual Search — Aside from voice search, many online shopping sites also use visual search for better product searching. Users can upload images of products that they are looking for and the AI system will provide a list of product recommendations based on the image. Shopping sites like Shopee and Lazada allow a user to visually searches.
  4. Anti-Cyber Fraud — Since most trades today are online, fake reviews, scams, and data phishing have become rampant. But thanks to AI systems, fraud, and other online crimes can be suppressed. The AI system breaks down fraud patterns and places added security measures for the user.
woman holding smartphone to enter the code to get a discount from the store concept of ecommerce sales

Tips in Using AI for Ecommerce

Even though the AI system has progressed through the years, there are still areas that need to be refined to make the plan more fruitful. Here are tips on how to start using AI on your website:

1. Plan your approach.

It’s okay to use AI to try new app features. Nonetheless, keep in mind that adding AI to your long-term business strategy could help you increase your profit. Focus on improving AI systems to ramp up sales and use the produced data for trends and insights.

2. Add a human touch.

Many factors affect the user’s buying habits and one of them is getting a tailored user experience. So, instead of sounding like a cold robot in chatbot replies, tailor it to sound like a real shopping guide.

3. Beef up your content.

Add more value to your website by adding tags and labels through data annotation services. This service tags content to make it obvious; thus, aiding machine learning for AI systems. Aside from that, this will also allow voice and visual search.

4. Ask for an expert’s help.

If you want to adopt AI in your business plan and expand its reach, then it’s best to partner with third-party agents who are skilled in the area. Since the field is ever-changing, it may be hard to keep up with the updates in real time. So, if you are a medium- to large-scale business, you might want to allot a budget for the AI expert team.

Partner with Data Experts Today!

Gain more edge in today’s digital marketing field with AI in ecommerce. Start with our simple tips to elevate your AI in ecommerce. Add more value to your content with the help of data annotation services from Outsource-Philippines. Our team of experts will tag crude images, videos, and other content for improved search visibility. Contact us to know more!