How does AI support e-commerce? 

04.09.2023 Katarzyna Zajchowska

What started back in 1950 is now a major trend in all sorts of business, including e-commerce. If you run an online store, artificial intelligence, as well as closely related to machine learning, can help you sell more products and provide customers with effective customer service. Let’s have a look at how AI has transformed online trade. 

In 1950, Alan Turing, a young British scientist, published his paper on how to build intelligent machines. His reasoning was actually very close to what’s being done today. Turing thought that if humans can use available data in order to solve problems, machines should be able to do the same thing. And he was right! If you want to read more about the early days of AI, take a look at this article.

Today, AI is a huge business with fascinating applications in almost every industry and sector. Intelligent machines and algorithms make our work easier, faster, and more effective. This is also true when it comes to online trade. Let’s talk a bit more about that. 

AI in e-commerce 

When it comes to AI in e-commerce, there are dozens of interesting applications. Today, we want to show you five of the most common ways in which artificial intelligence and other AI-derived technologies have changed online trade. 

Pricing optimization 

Dynamic pricing is a service that frequently uses AI to analyze all the available market data and provide users with real-time suggestions on how to change the prices of the products they offer in their stores. In some cases, these algorithms can implement adjusted prices on their own, of course, within the limits that you set. 

Pricing optimization saves online store owners a lot of time and enables them to stay competitive in the market, 24/7, all year round. These algorithms take multiple factors (e.g., seasonality, competitors’ activity, market conditions, and even customer behavior online) into account in order to set the best prices for the products you have in your offer.  

Personalization  

Each customer is different and, therefore, should be treated differently. Personalization is another AI-powered technique that allows you to use the available customer data (especially past purchases and related activity on your website) to provide each user with tailor-made messaging and product recommendations. For example, if you have a customer who usually buys tennis-related equipment, you won’t start suggesting products for snowboarders, correct? With personalization, product recommendations and other suggestions are tailored to each person and, therefore, more effective. 

Intelligent assistants 

Today, AI-powered assistants are a common sight on e-commerce websites. Chatbots and voicebots can serve your customers and answer their questions 24/7. Chatbots should be integrated with your e-commerce platform and customer database in order to make their support more effective and personalized. When it comes to e-commerce, chatbots can: 

  • Answer frequently asked questions 
  • Provide product information 
  • Upsell and cross-sell products in your store 
  • Provide status order updates and more 

Chatbots make your staff’s work much easier. They don’t need to waste time answering the same questions all over again. All of those mundane tasks can be handled by a chatbot. Because of that your customer service team can focus on more pressing complex issues. 

We discussed chatbots thoroughly in the recent article about conversational commerce; we encourage you to read it! 

Smart search 

Imagine this situation: You want to buy a product, but you have no idea what it’s called or in which category it could be found. But you have a picture of a similar product! This is where the search-by-image feature comes in. With AI, you don’t have to type the exact name of the product you’re looking for. You can upload a picture, and AI algorithms will find related products for you. This feature is available in many online stores, and it surely makes customers’ lives easier. 

See how search by image works on eBay: 

Source: https://tech.ebayinc.com/product/find-it-on-ebay-using-pictures-instead-of-words/ 

Moreover, AI can help you even if you don’t have a photo of the product you’re looking for. AI-powered search engines can predict what a given customer is looking for even after entering a rather imprecise product query. And yet another smart search feature known as voice search can help you to search for items by voice, e.g., by describing how they look or what they can be used for. 

AR

This acronym stands for augmented reality. It’s an AI-related technology that uses a 3D image of a given object. Then overlays it on the image from the camera of a smartphone or tablet. Thanks to this solution, the user can “see” how the item will look on themselves (in the case of cosmetics or clothing) and in their home (e.g., in the case of furniture and decorations). 

In the world of e-commerce, solutions based on AR are referred to as WebAR or virtual try-on (in the case of beauty products). 

See how this technology works in practice on the example of L’Oreal products: 

What the future holds 

There is no doubt that AI will continue to grow and transform e-commerce even more. In the near future, we can expect to see even more advanced chatbot assistants. They will be capable of recommending clothes for a given person based on their preferences and style. We can also expect to see even more advanced personalization features. They will assist each customer throughout their entire visit to your online store. 

That’s the future, but AI can transform your e-commerce company even today! Do you want to know more? Drop us a line, and let’s see how we can make your store smart.

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