AI in Ecommerce – The Next Step in the Evolution of Online Business

Disclaimer: Magenticians does not necessarily agree with the views expressed in this guest post. They are presented to bring to light all diverse views in the Magento and general ecommerce community.

Modern technology is advancing by leaps and bounds and artificial intelligence (AI) is at the forefront of this rapid development. And the increasing role of AI in ecommerce must not take you by surprise. In fact, the AI acts as a driving force behind dynamic progress across industry sectors, including the burgeoning online retail ecosystem. The global ecommerce market is likely to exceed $4 trillion in sales by 2020 and interestingly enough, that is also the year when we will reach a new milestone. A study from Gartner affirms that AI will be handling 80% of all customer interactions by the end of the year. In other words, there is not much time to awaken to new high-tech reality, as AI in ecommerce landscape is already changing the way we buy and sell online. Brands have to adapt fast in order to increase brand competitiveness and nurture customer loyalty.

Tech Is Making Big Waves

It did not take long for buyers to embrace the utter convenience of shopping from the comfort of the home. Why would anyone go to a brick-and-mortar store, when everything is at our fingertips? Indeed, ecommerce has become a standard, go-to method of purchasing products and services. As a result, the market is expanding at an unprecedented rate, riding the waves of past transformations and present innovations. As the competition intensifies, the customers, products, and business tools are multiplying exponentially. Amidst this upsurge, one technology plays a pivotal role— ecommerce AI. In a nutshell, it involves computers taking on a multitude of tasks that used to be reserved for humans. It is important to note here that the term actually denotes three different technologies: Machine learning (ML), Natural Language Processing (NLP), and data mining. They have been around for a while, but only recent advancements in AI ecommerce have brought them into the mainstream.

The Cutting-Edge of the Industry

As such, AI in ecommerce is penetrating a wide array of areas and making the online businesses smarter. It impacts everything from customer transactions and interactions to retention and satisfaction. So far, the most popular uses of AI in ecommerce have revolved around lead generation, consumer data gathering and processing, customer service, and user experience. Retailers worldwide are wasting no time fitting the ecommerce AI environment and setting the stage for success. The implementation is all but frictionless, but AI in ecommerce does hold the power to boost efficiencies across the board. First of all, the implementation of AI in ecommerce setup dramatically decreases the workload and strain for human representatives. They are able to focus on the more creative side of the workflow, and executives have more time to develop strategies and add value to their organizations. Hence, it does not come as a surprise that today, 42% of all ecommerce players pioneer, pilot, apply, or fine-tune their AI programs and solutions. Furthermore, studies have shown that 67% of surveyed entrepreneurs assert AI in ecommerce helps in bolstering organizational efficiency and consequently, it poses one of the top investment priorities moving forward. The industry leaders in the league of eBay, Alibaba, and Amazon are ahead of the pack approaching ecommerce AI frontier. They are already using AI in ecommerce setup to sniff out fake reviews, power chatbots, generate product recommendations, automate warehouse operations, process big data, etc. But, small businesses are also in a great position to improve outcomes. They can capitalize on ecommerce AI proliferation and affordability to a hassle-free online buying process and tap into new markets.

Robots on the Roll

Machines of today are capable of handling a variety of manual and repetitive tasks. Moreover, they are constantly getting better at managing conversations with the customers and giving detailed, accurate answers. This is all thanks to the fine working of deep learning and ML. Take the examples of AI assistants and chatbots that have proved to be a real boon for modern brands. They quickly respond to customer inquiries, both written and voice, navigating a complex labyrinth of decision making.  Hence, they aid customers in finding the quickest paths to reaching goals. And since they need to rest (unlike humans), 24/7 customer support is now a plausible reality. Leading brands also implement chatbots to provide product recommendations via NLP. Alibaba’s Tmall Genie and Ali Assistant, for example, are sharpening the competitive edge of the Chinese giant. These two service chatbots tackle 95% of all consumer inquiries, offering smart product and search recommendations. They also allow the company to refine logistics and map out the most efficient delivery routes. Warehouse operations around the globe are also reshaped. Another Chinese brand,, relies on robots to speed up, and make product sorting and delivery more efficient. This enables smooth delivery of most of the orders within a day. Ultimately, the automation in AI ecommerce has also trimmed costs, reduced manual work, and improved the bottom line of the company. No, robots are not taking over just yet, but it is no longer such a far-fetched possibility anymore.

Harnessing the power of data

The ecommerce AI is also converging with one monumental trend— big data. Reputable brands (like Amazon and Rakuten) employ AI engines and algorithms to analyze consumer behavior on ecommerce websites and segment buyers based on real-time data. Now, it is possible to examine millions of products, feedback, and previous responses to predict perfect matches that customers will like. In this way, ecommerce frontrunners are able to anticipate future sales with an impressive degree of certainty. And that is not all! CRM systems are getting more automated and require less oversight or direct involvement on the part of human employees. For instance, sales teams have ecommerce AI tools and actionable data at their disposal. They can take advantage of sales intelligence to come up with tailored messages. Not only this, but also engage customers at precisely the right moment, and using the most suitable platform. In general, customer service is also more personalized, due to improved ability to pull data across different touch points, including web, social media, email, and apps. This kind of integrated monitoring, among other things, enables ecommerce businesses to achieve cross-channel consistency and establish a universal customer view. This leads to better conversion rates on the website and thus, more sales.

Search for the Holy Grail

Another major trend transforming the role of AI in ecommerce landscape is the rise of voice and image search. The latter is propelled by improvements in image classification, attribute identification and product tagging AI technologies. The former is rooted in devices like Alexa and Siri that fuel targeted marketing strategies, personalized customer service, and customized recommendations. These two novelty modes of the search are already big and are most likely to account for one-half of all queries by 2020. Early adopters will soon start revamping their digital storefronts to accommodate AI in ecommerce and potentially make big revenue gains. Yet, this is not a task for amateurs. Many brands will have to carry out changes with the help of top digital agencies that adhere to best practices and champion innovation. We are also likely to see collaboration with app developers. There is a spike in demand for dedicated apps such as ASOS, which uses photos of customers’ clothes to find similar apparel available online. One other opportunity presents itself is that ecommerce organizations are now tempted to invest in visual listening tools to capture brand experiences and mentions expressed through images and videos. These new features will spur growth mostly in the apparel and fashion sector, albeit home décor, electronics, and grocery retailers will not lag much behind. This may be a big expense, but it can also prove to be a sound strategy to improve competencies and add more sophisticated solutions to the sales arsenal while using ecommerce AI supported platforms.

Consumer-Centric Outlook

How are consumers responding to all these changes? Well, for now, reactions are largely positive. One out of five customers is willing to buy from a chatbot. Around 40% of them use these virtual helpers to hunt for deals and offers and that number is only going to go up.  This is not surprising considering that AI in ecommerce can serve every single customer with a customized personal attention, something that was previously possible only in retail outlets. Besides, trends like voice and image search should alleviate one major pain point of customer experience — irrelevant product results in queries. NLP can contextualize data and narrow down the list of results that match the user’s intent. Moreover, this tech framework discovers complementary products to elevate the shopping experience even further. All in all, it has never been easier for people to find products they really want and need online. One thing to remember, though, is that benefits of AI in ecommerce do not kick in automatically. The trick is to look beyond the upfront costs of implementation and prioritize long-term value that all this practice can provide. Rest assured that your competitor is probably either considering or already integrating AI in ecommerce. You cannot afford to be laggard and end up lagging behind. On a leveled playing field where affordable reprocess abound, small and medium-sized businesses (SMBs) have a real fighting chance against global behemoths.

Buckle Up, Future Is Here

AI ecommerce has become an integral part of success. It shapes shopping habits and opens up lucrative opportunities for businesses. It’s time to get ready to crush mounds of data, collect valuable insights, and track online behavior. Use this knowledge to optimize ecommerce business processes and automate the bulk of the sales sequence. Explore creative ways of reducing the workload and conserving precious resources. If you really mean business, you have no other option than to match shifting preferences and rising demand. AI adoption is no longer optional, but a matter of life and death for ecommerce businesses. The sooner you realize that the future is now, the better it will be for your endeavors in a crowded market. It is time to take the shopping experience to the next level.

Author Bio

Natasha Lane is a web designer, lady of a keyboard and one hell of a geek. Her expertise could be summed up in IT, digital marketing and business-related topics. You can follow her on Twitter.
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