5 Essential Ways AI is Reshaping the E-Commerce Industry
“AI is in a golden age and it is solving problems that were once in the realm of sci-fi – Jeff Bezos”
Gone are the days when robots and sci-fi thrillers and machines were only the talks of fictional movies. Big thanks to technological advancements, the contemporary world is experiencing things that were only imagined once.
For example, who would have thought that we would be able to get the latest news by setting an alarm clock using just our voices? However, see today, Home Alexa and Siri have become indispensable parts of our lives. This all happened because of one word: artificial intelligence.
To continue, today, every industry be it manufacturing, healthcare, or education is enjoying the enormous benefits that AI brings along. Among these industries, the e-commerce industry is also one of the players that have skyrocketed its growth in a very short period of time with the help of artificial intelligence. In fact, the latest Global market report also validates that by 2025, the sales of e-commerce are expected to hit $ 7.3 trillion which is expected to drive the AI in retail market value to $36.46 billion by 2030.
This unexpected growth has made people question how exactly AI has been able to provide so much boost to the e-commerce industry. Besides, by looking at the statistics, it is no hidden fact that this growth is not stopping anytime soon.
Hence it is essential for us to know exactly how AI is reshaping the e-commerce industry into its most efficient version. That being the case, this blog will effectively highlight 5 crucial ways in which AI is transforming the e-commerce industry. So, let’s dive right into the blog without further ado.
5 Crucial Ways AI is Transforming E-commerce
1. Personalized Services
Every time you look up something in an e-commerce website or app and the next time you open your app or website, you find similar suggestions to the products you searched for. Although it may seem something unreal, the magic of AI makes it possible.
AI has the capability to collect huge database sets and analyze the experience of the customers as per their previous search history and other interactions. Based on the effective analyses, e-commerce companies are effectively able to present customized recommendations to their target audience. This is called personalization.
Personalization nowadays is one of the biggest trends in the business world and the e-commerce industry has gained a lot of benefits from this trend.
AI has allowed the e-commerce industry to customize the experience of every individual on a personal level which makes the consumers more inclined toward making frequent purchases. To substantiate, 91% of the customers are more likely to shop from businesses that provide personalized recommendations that are relevant to them.
In fact, modern consumers are so much impressed with the concept of personalization in online shopping that they are not ready to engage with websites that do not offer personalized experiences.
Hence, personalization not only provides better customer satisfaction but also retains them for a long time. So, for the e-commerce industry, it is more like hitting two birds with one stone. One, they assist businesses in accomplishing their SMART Goals. Secondly, they can enhance customer satisfaction to improve retention.
2. Virtual Assistants
We all were somehow frustrated by the constant interference and influence of retailers while physical shopping. That became one of the major reasons people like online shopping because in online shopping there is no interference or influence from the side of the seller.
However, there were some of us who wanted assistance in online shopping as well. This is where AI helped the e-commerce industry in fulfilling the customers’ needs.
To continue, there were many virtual assistants that were created based on AI algorithms that understood the preferences of the consumers. Based on the effective analysis, AI can suggest similar items to consumers while purchasing items from a website or app. This has assisted the e-commerce industry in earning higher revenues by providing better customer support to the target audience.
Moreover, not only this, but AI-based chatbots also did some miracles for the e-commerce industry. AI-based chatbots have the ability to respond to any queries of customers at any point of the day. This not only assists the e-commerce industry and provides more satisfactory service to the consumers by being available 24/7 but also reduces the cost for the e-commerce industry to hire additional chat representatives.
In fact, as per statistics, AI-based chatbots will assist e-commerce businesses in saving more than 8 billion by the end of 2022.
3. Optimized Inventory Management
Inventory management is one of the crucial aspects that define the success of e-commerce businesses. Hence, it is really essential for the e-commerce industry to optimize its inventory to its fullest potential to enjoy the tremendous benefits. This is where AI swooped in and became the helping hand of the e-commerce industry.
AI has the ability to forecast future trends based on the historical data of the company and the overall status of the sales. Based on the forecasted trends, the industry can effectively stock or restock the items that are required and that are no longer necessary in the inventory. This assists the e-commerce industry in optimizing inventory which also resulted in reducing the wastage of extra resources.
Moreover, being prepared for the demands of the customers in advance will assist in effectively anticipating and fulfilling the rapid demands of the customers. This will assist in providing a better customer experience to the target audience which will contribute to enhancing the revenue generation of the e-commerce industry.
4. Voice and Visual Search
As said above, we have been fans of Alexa and Siri for forever now. This amazing trend has made a significant impact on the e-commerce industry. The only reason voice and visual search have become such a massive trend in the e-commerce industry is because of their accuracy in understanding the preference of the customers.
Besides, in making this possible, NLP (Natural Learning Processing) has a major role to play which is the main branch of artificial intelligence.
In accordance with Q2 results of Google and Alphabet, CEO Sundar Pichai states that people are 8 billion times more likely to conduct visual searches per month. This has made it simple and easy for customers to navigate e-commerce websites and search for their preferred products and services.
Besides, the conversation AI chatbots like Alexa and Google Home have enabled people to playfully interact while shopping instead of plain order confirmation. This has assisted e-commerce businesses in forming and cultivating good relationships with their target audience.
5. Automation of repetitive tasks
Lastly, in the competitive world, the only businesses that can thrive are the ones that are working in becoming the most efficient version of themselves. This is where AI stepped in and revolutionized the e-commerce industry. We are very much aware that the most impactful feature of AI is that it has the effective ability to automate repetitive tasks.
In the e-commerce industry, there are ample repetitive tasks such as generating invoices or cross-checking the items of the inventory that can be too time-consuming. In addition to the time consuming, it also adds up to the expenditure cost for the e-commerce businesses to get those tasks completed by hiring extra labor.
Hence, when AI got hold of handling repetitive tasks, it brought immense benefits to the e-commerce industry. Some of them are mentioned below.
Cost-effectiveness – As said above, repetitive tasks consume the cost of the businesses to get the tasks completed. Hence, companies doing one-time investments in AI chatbots or software will save them the labor cost of performing the same tasks manually.
Enhanced efficiency – When machines will take care of repetitive tasks, it will save the time of employees in the e-commerce industry. This will actually give employees time in performing other significant tasks which will contribute in enhancing the efficiency of the businesses.
Fewer errors – AI machines are less prone to making mistakes than humans. Hence, it will assist e-commerce businesses in providing more accurate and better services to their customers.
Engages employees – When employees will be free from performing repetitive tasks, it will assist businesses in enhancing the employee engagement rate.
To conclude, it is an undisputed fact that AI is revolutionizing the e-commerce industry for good. Hence, the need is to effectively understand how AI is revolutionizing the e-commerce industry. So, businesses can effectively enjoy the amazing benefits that AI brings to the e-commerce industry.
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