Most of us are familiar with receiving an ad for something after talking about it. It feels like something is monitoring our lives. You would be surprised to know that it is true and legal! For example, a data-collecting program called Alphonso is embedded in many apps across Google PlayStore, once you grant permission to the app to access your phone, your life is open for them to see.

There are other similar data collecting programs. These programs are born with the rise of Artificial Intelligence – the concept of making machines think and learn for themselves. Artificial intelligence in e-commerce has expanded the world of online shopping business.

Here are some ways in which AI in e-commerce is used.

1. Recommendation Systems.

You might know about amazon’s “customers who bought this also bought”. This algorithm is an application of artificial intelligence in e-commerce. Recommendation systems study a person’s browsing history and their previous searches to fish out the products which match consumer’s preferences the most. With Amazon, this system works by trying to sell you another product complimenting the one you selected.

2. Image Recognition.

The internet has a lot of information, searching for something you want can lead to this information overload. Image recognition is another application of artificial intelligence in e-commerce which makes it easier to search for products. Describing a pretty dress we saw somewhere involves a lot of words, the results usually have all the things matching the keyword, one would have to spend a lot of time searching for what they exactly want. In this case, the role of AI in e-commerce via image recognition, especially in the fashion industry is very significant. Searching with an image instead of detailed descriptions is quicker and more accurate.

 3. Chatbots

Chatbots are an example of how noteworthy the role of artificial intelligence in e-commerce is. This form of AI in e-commerce uses technologies like Natural Language Processing (NLP), this combined with the first party gathering of data prompted by chatbots influences what consumers buy. Chatbots often remind people about their neglected items in the cart in a friendlier manner compared to email marketing. Using valuable first-party information, chatbots can also personalize information for customers and engage them in other forms of marketing, sometimes enabling them to shop online an item by offering a promo code. Chatbots can also be programmed to showcase a personality, making their interactions seem more human-like. They are available throughout the day, making them an enterprising application of artificial intelligence in e-commerce.

4. Managing Consumer Data.

We are already familiar with the fact that consumer data is collected to recommend products. This information about the customer also needs to be studied thoroughly. However, a big chunk of this data is not employed because it is too much to handle and integrate effectively, resulting in potential customers often slipping away. Analysis of consumer data is a crucial role of artificial intelligence in e-commerce. Artificial intelligence can conclude from a given dataset quickly and more accurately compared to a human. It brings in customers that otherwise would have gotten away.

5. Managing Inventory.

A remarkable role of AI in e-commerce is keeping a check on which items have expired, almost out of stock, are in demand etc. It is not possible for a human to stay updated all the time. Artificial intelligence technologies such as time series prediction, reinforcement learning systems have helped Amazon keep their inventories in top condition. AI in e-commerce can predict what sales of different items across the inventory will look like for the coming days. A more advanced form of artificial intelligence in e-commerce uses a reward and punishment system for the algorithm to learn how to act on its predictions. For example, punishing the algorithm for allowing an item surpasses its expiry date, this eventually leads to the algorithm taking control over the inventory. The role of artificial intelligence in e-commerce is noteworthy in reducing costs.

6. Cybersecurity.

With the rise of online transactions, security has become a big issue. Using artificial intelligence in e-commerce makes it easier to identify abnormally huge transactions. Companies using e-commerce go through a lot of payment activities daily. Some people are always on the hunt to scam someone or create a fraud. Visual AI can identify fake logos and creepy products which might give a bad reputation to the original company. It ensures the safety of consumers as well as sellers. Artificial intelligence goes a long way in preventing frauds in the virtual world.

7. Services after the sale.

A person becomes familiar with a brand after buying something from online. A lot of people would think that selling a high-quality product would ensure the person’s return to the company. It is not possible in a world where competition is increasing by the minute. The consumer’s coming back also depends on how businesses treat them after the service. AI in e-commerce can automate forms for collecting feedback, keep the consumer in the loop about new products and offer grievance support when the product is not up to consumer’s expectations. Ensuring consumer satisfaction after a transaction gets completed is crucial in maintaining the company’s reputation in the long run.

8. Prediction

Businesses need to update themselves about the latest consumer trends and tailor their products and recommendations according to what trends each of their consumers are following. Using artificial intelligence, one can get a good idea regarding what products are to get manufactured in the future and which populations could be targeted. It keeps business from dying.

Conclusion

Role of AI in e-commerce is undoubtedly significant. If you have not already incorporated it in your business, you risk falling behind. It is necessary to understand that artificial intelligence improves e-commerce experience when combined with humans. It is not here to replace humans and cause unemployment. Artificial intelligence is still in its nascent stages of being used with e-commerce and is going to be a necessity for all businesses in the future.