Blog 3 minutes

AI in e-commerce: how AI can up your e-commerce game

Nathan Dennis
June 17, 2022
AI in e-commerce computer chip

AI. Two little letters have completely captured cultural imaginations in ways that few technologies ever have. But, contrary to films like Terminator or I, Robot, AI is not some futuristic tool that spells our doom.

No, AI is a system of tech that we already have and is getting more useful every day.

From voice assistants like Siri to algorithms for music recommendations on Spotify, AI is used continuously to make our lives better.

This same AI tech can turbocharge your e-commerce to improve customer experience, improve efficiency, and give you a competitive edge against your peers.

How can you use AI in e-commerce effectively?

Let’s find out together.

How AI can up your e-commerce game

    What is AI?

    AI stands for artificial intelligence. It refers to a host of different programs and technologies that complete tasks by learning from their successes and failures.

    In a nutshell, these programs will try a solution, evaluate how well that solution worked, and then use that information to make a better solution next time.

    Think about the Spotify algorithm that suggests music for you. Every time you listen to a song, Spotify takes note of that. It registers how long you listened, when you listened, what you listened to after, if you skipped the song – it pays attention to all of that. Then, Spotify will suggest songs to you based on your behavior. The more you listen, the more it learns, and the better its music suggestions become.

    That’s AI. And Artificial Intelligence in e-commerce is an exciting new opportunity that smart businesses should take advantage of to boost their competitive advantage.

    How can AI power e-commerce?

    AI isn’t just for beating humans in chess or helping you pick a good show on Netflix. AI is an innovative solution that can improve e-commerce for end-users and for businesses themselves.

    But how can AI serve as an innovative solution to the e-commerce challenges you face? What benefits can your e-commerce business gain from implementing artificial intelligence?

    Let’s dissect five cases of how using AI in e-commerce can take your business to the next level.

    Product Recommendations

    This is a simple, but very effective use for AI in e-commerce: product recommendations. Since AI learns through repeated interactions, an AI e-commerce solution can learn what products a consumer is more likely to be interested in based on their previous purchases and behavior.

    With AI, your web store will recommend relevant products to end-users, improving their customer experience and increasing the likelihood of completing a sale.

    Chatbots

    Chatbots are an excellent way to get users to the information they need. Chatbots automate conversations with customers, answering relatively simple (but frequent) questions and demands, such as:

    • Where is my order?
    • How do I make a return?
    • How do I cancel my order?
    • I want a refund.
    • I need to speak to support.

    Chatbots can automate many of the processes associated with these demands, like pulling tracking information. When they aren’t able to complete a request, they can ferry users to the appropriate live support. This reduces the volume of demands that customer service receives and guarantees that users are sent to the appropriate customer service department.

    This is a perfect example of AI in e-commerce that improves customer experience while improving business efficiency.

    Personalization and ecosystem connectivity

    We’ve already seen one instance of AI personalization: product recommendation.

    But did you know that there are more ways that AI can create a compelling and personalized shopping experience for your customers?

    With AI tech, you can deliver personalized ads to your shoppers based on their shopping habits and their browsing history. You can even use AI to predict when they may be likely to make a repeat purchase, and your personalized marketing can target them respectively.

    You can maximize the effectiveness of this personalization by linking their browsing history on each device. This way, when your buyer looks at your store on their mobile device after browsing on their tablet, their personalized shopping experience is maintained – creating a seamless buying experience across their device ecosystem.

    Inventory management and sales forecasting

    AI isn’t just customer-facing; it can serve as a valuable tool for business planning and inventory/supply chain management.

    When it comes to your inventory, AI can look at historical ordering trends to develop a predictive ordering process. This way, you never risk running out of critical supplies that you’ll need. Similarly, AI can be trained on real-time and historical sales data to make informed sales forecasts, enabling you to have a clearer understanding of your business’s prospects.

    Both of these tools help you make informed and streamlined business decisions while reducing tedious and rote labor. This frees up your workforce to pursue more creative and engaging tasks that ultimately help your business grow.

    The new normal for B2B buying has arrived.

    Is your business ready?

    What are the dangers of AI in e-commerce?

    While using AI in e-commerce can be a real boon for your business, there are some dangers and drawbacks that you need to be aware of.

    Firstly, customers can be put off by intrusive, AI-based advertisement. If a customer looks up “shoes” on their phone, and then their social media feed on their work laptop is bombarded by “shoes” ads, they may be put off by the obtrusive nature of the ads and develop a negative association with the brands advertised.

    Furthermore, special care needs to be taken with AI when it comes to children and adolescents. AI (particularly recommendation algorithms) can push inappropriate and unhealthy content to impressionable audiences. A key example would be Instagram, where Meta execs knew their AI algorithm was pushing content that was harmful to teenage users.

    Additionally, there are significant data privacy concerns when it comes to customer-facing AI. AI platforms in e-commerce can derive and store significant amounts of data (from browsing to chatbot conversations). It’s imperative that this data is secured and consumers are informed as to how their data is being used.

    AI in e-commerce builds a winning, online customer experience

    AI is a tool — a powerful type of software that learns from experience. By leveraging artificial intelligence in e-commerce, you can create an engaging and useful customer experience that provides relevant recommendations, deals, and information.

    AI isn’t some futuristic concept. It’s already here, and it’s already helping businesses streamline and create winning customer experiences.

    But that’s just one piece of the CX puzzle. There are many key steps you can take to create amazing CX for your buyers.

    Ready to learn how to wow your B2B buyers with great online CX?

    Create winning CX online