Do you see or hear the term “AI” and instantly want to bury your head in the sand? If you run an ecommerce business, artificial intelligence (AI) is not something you should be ignoring. And there are plenty of simple ways to incorporate AI in ecommerce.
Let’s start with savings, because they are quite significant. According to TotalRetail, AI could save retailers as much as $340 billion annually by 2022, with 80 percent of those savings coming from AI-enabled efficiencies in supply chains and returns processes.
And retailers are paying attention. A Capgemini Research study found the global annual amount spent on AI by retailers is expected to surpass $7.3 billion by 2022.
But which AI technologies would your ecommerce business benefit the most from? Here are three you shouldn’t ignore:
What is the most important element when it comes to increasing online sales? Personalization. When it comes to benefits, however, those "similar products" AI-driven suggestions barely scratch the surface.
AI personalization software learns about ecommerce shoppers based on their search and purchase history, buyer demographic and previous transactions. This enables effective product recommendations like "You may also like."
Upselling is a serious business. When Amazon launched the "Customers Who Bought This Item Also Bought" upsell in 2006, their sales increased by 35%.
In a brick-and-mortar store, every customer sees the same products. As on an online retailer, you have the advantage of showing shoppers specific products relevant to them, which has been proven to increase sales. Make sure your ecommerce business has the AI tools to properly personalize your customer experience.
2. Predictive Marketing
Imagine if you could use your customers’ current and historical data to predict future purchases. That’s precisely what predictive marketing does. AI makes it possible by identifying correlations between your customers’ past purchasing behaviors.
For example, running your customer data through a predictive model can help guide your marketing strategy by anticipating their behavior and:
- Pinpointing unhappy customers you’re on the verge of losing
- Identifying happy customers who may be ready to buy
Predictive marketing can save you money by allowing you to focus on quality leads versus those with no clear intention to buy. AI, or machine learning, makes this possible.
3. Customer Service
While AI can’t completely replace people when it comes to resolving complex problems, it can still play a key role in customer service. Take chatbots, for instance.
Chatbots come in two types: simple and AI-focused. While simple chatbots can spot keywords in customers’ questions and respond with pre-determined answers, AI-focused chatbots can perform more sophisticated actions. They do that by using natural language processing and machine learning to mimic human conversation that sounds just like real people.
Ways chatbots can be helpful for ecommerce businesses include:
- Added support during busy times of the year, such as holidays
- To engage customers with a welcome message on your website
- To answer easy questions and free up customer service staff for escalated issues
In fact, according to a 2016 McKinsey report, 29 percent of what customer service representatives do could potentially be automated. Chatbots can help your business increase sales while saving time and money.
Personalization, predictive marketing and customer service are just three areas with applications for AI in ecommerce. Ecommerce businesses can use AI for everything from mining social media data to optimizing logistics. It all depends on your organizational needs.
If you’re not using AI for your ecommerce business yet, now is as good a time as any to familiarize yourself with the technology. Identify the problems you’d like to tackle and consider what value AI could bring to the table. Start small and assess your new AI’s value before broadening its capabilities.
There is plenty of potential for AI in ecommerce. Take advantage of the technology and consider some of these simple ways you can incorporate AI in your ecommerce business.