Artificial Intelligence for eCommerce: A Closer Look

AI technology is having a jolting impact on the future of the ecommerce industry in 2021.
ai in ecommerce
Shutterstock Photo License - By Andrey_Popov

Artificial intelligence is one of the fastest-growing technologies. It grew 270% in just four years since more companies started noticing its benefits and adopted this technology.

eCommerce businesses are no exception. Over 50 percent of them use AI for various purposes, like creating personalized services and automation.

This article will share the basic concept of AI, including its definition, types, and current trends. We’ll also cover the benefits of using AI for eCommerce and eight ways eCommerce can implement this technology.

What is AI?

Artificial intelligence (AI) refers to machines that simulate human intelligence. John Mccarthy, the father of AI, explains that these machines can use language, form concepts, solve problems, and improve themselves.

Today, this technology plays an essential role in many industries. In healthcare, the Babylon AI doctor app can check patients and offer basic treatments. Meanwhile, in education, the University of Michigan created an AI program that reviews writing submissions and recommends revisions.

AI technology comes in several types, including:

  • Reactive machines. Perform the most basic operations, like identifying current conditions and choosing possible responses. Yet, it can’t store past experiences to help make decisions in the present.
  • Limited memory. Analyzes previous data to make better predictions, like self-driving cars that observe directions and traffic lights.
  • Theory of mind. Begins to interact with its emotions and thoughts. AI researchers are still developing this type as the current machines, even voice assistants, can’t talk like actual human beings.
  • Self-awareness. Not only copy humanlike actions but also understand itself and have desires. Currently, this AI type only exists in fiction.

Why Use AI for eCommerce?

AI helps create a seamless user experience. For example, it can recommend products based on users’ buying patterns.

Business owners can also build more effective management systems with AI. They can automate their tasks, like arranging delivery schedules and analyzing online sales.

An eCommerce website builder like Zyro also uses AI to improve a variety of processes. For instance, its AI content generator can create unique content in minutes by choosing a category relevant to your business.

8 Ways to Use AI for eCommerce

This section will share eight ways an eCommerce business can use AI and provide some real-life examples.

1. Advanced Visual Search

Typical issues with text searches include incorrect spelling or unique names that customers can’t remember.

With visual search, users can find products without describing them. They simply upload or take a picture, and the search engine will show related products.

One brand that applies this technology is ASOS. The Style Match feature in its mobile app enables users to upload a picture. Then, the app will display products from the brand’s catalog that suit the photo.

2. Image Tagging

Like visual search, image tagging also uses visual recognition technology. Here, AI will generate classifications related to the product you’re viewing. They can be color, size, and type.

For instance, some labels, like round neck and plain, will pop up when you see a similar dress. If you click one of the labels, the platform will direct you to visually similar results under that tag.

Image tagging offers quick and relevant search results to users. It also helps business owners speed up the cataloging process as they don’t need to classify their products manually.

3. Predictive Marketing

Treating all customers, the same can be an ineffective strategy. It’s because different behaviors require different approaches to be effective.

That’s where predictive marketing comes into place. It refers to a strategy that uses data, such as website analytics and purchasing history to predict sales trends and customer behavior.

For example, ZlavaDna uses predictive marketing for email segmentation. It only sends a newsletter to customers that have higher open rates from the previous campaign. As a result, it gets the same revenue by sending fewer emails than usual.

4. Chatbots

A chatbot refers to a computer program that simulates a conversation with users. With this technology, 80% of businesses improve their customer satisfaction with contact center performance. They also see $23 billion in savings in their annual budgets.

Many eCommerce businesses use chatbots on their websites, while others integrate third-party apps. For example, Sephora uses AI chatbots on Facebook Messenger to help customers make a reservation.

It’s also possible to set the chatbot’s conversation style to meet your brand personality. Hipmunk is one of the best examples. It uses informal and friendly language with its customers, just like when talking to a friend.

5. Retarget Potential Customers

Retargeting means targeting your audience that has already visited your social media profiles and websites.

There are two types of retargeting:

  • Pixel-based targeting. Redisplaying your ads to visitors using browser cookies. The cookies will notify retargeting platforms, like Google or Facebook Ads, to show your ads on their platforms. Hopefully, users will see the ads and come back to your store.
  • List-based targeting. Using contact information in your database. The first option is uploading the contact list to a retargeting platform so that people can see your ads on the platform. An alternative is retargeting them via personalized emails.

6. Personalized Shopping

80% of consumers are more likely to purchase from a brand that offers a personalized experience.

Personalization in eCommerce includes showing special offers or product recommendations based on users’ browsing behaviors, purchase histories, and personal data, like demographics and locations.

One brand that offers excellent personalized shopping is Amazon.

Amazon recommends items based on the customers’ carts and product pages they looked at. One of its campaigns, Amazon Prime Wardrobe, also surveys premium customers. Then, it analyzes the answers and gives them personalized recommendations.

7. Tasks Automation

Many eCommerce tasks are repetitive. And, if humans do them, they can be time-consuming. Consider automating your workflow using AI-based apps or software to help minimize human errors and increase efficiency.

Some automation ideas for your eCommerce business include:

  • Segmenting customers based on buying behavior
  • Scheduling social media posts
  • Tracking and rewarding most engaged customers
  • Sending abandoned cart emails
  • Creating shipping labels

8. Voice Assistants

Voice assistants, like Siri and Alexa, have become an integral part of everyday tasks. They provide information, respond to commands, and help with daily life. More than 20 million voice assistant owners make a purchase using this device, like takeouts, groceries, and books.

Purchasing via voice assistants is faster than typing since shoppers don’t need to open a website or app to shop.

It can also convert leads to sales. For example, Sleep Jar, a brand that sells ambient sounds, saw a 3% conversion after Amazon enabled in-skill purchasing on Alexa.

Conclusion

AI is a technology that enables machines to simulate human intelligence. Many businesses use this technology, including healthcare, education, and eCommerce. In eCommerce, AI especially helps to streamline the buying process and provide a smooth user experience.

Here is the summary of how eCommerce can implement AI:

  • Visual search
  • Image tagging
  • Predictive marketing
  • Chatbots
  • Retargeting potential customers
  • Personalized shopping
  • Tasks automation
  • Voice assistants

Hopefully, this article helped you understand the current trends of AI for eCommerce and convinced you to give it a try.

Matt James
Matt James is a veteran marketer & tech geek that has helped many large brands increase their online footprint. He specializes in influencer outreach and business growth.