Artificial intelligence (AI) stands to transform every industry.
However, most sectors are in the initial rollout phase, establishing what AI can and can’t do. eCommerce is the leader and stands as one of first key beneficiaries of a new generation of technologies.
Brands in eCommerce have already ploughed investment into the capabilities of AI. Indeed, with the retail and eCommerce sectors having a compound annual growth rate (CAGR) of 42.8% between 2019 and 2025, investment is only expected to expand. Clearly these companies are already realising some of the benefits of AI.
Today’s consumers expect convenience and flexibility across every channel – AI brings this by personalising the experience and providing a more nuanced customer journey. So how can eCommerce merchants capitalise on AI while use cases across other industries remain niche?
The applications of AI in eCommerce
To begin with the most well-known solution – chatbots automate community management, customer engagement and even sales leads. According to Gartner, the average person will have more conversations with bots than with their spouse by 2020. Meanwhile, 70% of white-collar workers will interact with conversational platforms on a daily basis by 2022. AI-enabled bots provide eCommerce merchants with a scalable solution which works around the clock, using natural language processing (NLP) to help people find the right product or make complaints. Equally, they are integrated with organisations’ internal APIs to provide visibility over product availability or assist employees with customer engagement.
Elsewhere, AI helps brands to build meaningful relationships with their customers by making sense of increasingly large volumes of data. When a consumer visits a website, they leave behind a trail of digital breadcrumbs, much of which has been left untapped. However, AI allows retailers to rapidly sift through transactional data to help employees generate insights from trends, purchasing patterns and marketing leads, and turn them into improved decisions.
In the digital era, retailers must be able to contextualise, optimise and narrow down search results for their buyers. AI enables merchants to leverage cookie data and provide consumers with highly tailored offerings. By utilising natural language processing capabilities, image, video and audio recognition, retailers can home in on what it is their customers really want.
Clearly, there is no shortage of use cases for AI in eCommerce. While some are more obvious than others, what is certain is that it enables merchants to provide customers with seamless experiences while enabling employees to do their work more effectively. So, how can AI be leveraged successfully?
Preparing for innovation
AI is nothing without data. It derives intelligence from the vast quantities of information possessed by organisations, meaning data science and data engineering become crucial. However, deriving insights from this data is by no means easy, and organisations need to ensure that they have the necessary foundations in place to apply analytics.
The problem is that this data is often extracted from fragmented and siloed sources, meaning there is a need to make data more accessible – this requires coherent integration structures. What’s more, screening and aligning this data is a manual process and preparing data can take up a significant amount of time and resources.
Additionally, much of the data needed for AI to perform requires perishable insights. By this, we mean insights where the value degrades over time and which need to be detected and actioned as quickly as possible. Therefore, if companies struggle to collect sufficient amounts of the necessary data, it can quickly be rendered useless.
Preparing data is a complex process, particularly as large organisations tend to have their information spread across multiple sources. This all needs to be aligned if AI is to yield the hoped-for results. This means that data quality becomes a key challenge for eCommerce merchants to overcome, as poor data could prove detrimental – so, when it comes to implementing AI, do the rewards outweigh the challenges?
Never too soon
The applications of AI in eCommerce are only going to increase – in 2025, it’s set to be worth $27 billion in retail alone. With consumer demands ever-increasing, it’s no surprise that customer experience will be the most significant beneficiary.
Brands are beginning to adopt AI as consumers become more familiar with new technologies and personalisation becomes a priority. While it is undoubtedly a considerable investment, those early adopters will benefit tremendously, with the alternative seeing brands left behind.
Preparation is key if eCommerce merchants are to reap the rewards. Retailers would do well to have a clear business case in mind, look for market opportunities to exploit and determine whether they have the necessary technologies, people and data.
Ultimately, generating real-world results from AI requires preparation. Businesses must have access to clean and high quality data if they are to derive actionable intelligence – only then can AI move on from being a buzzword.
Original post: https://technative.io/the-ai-frontier-ecommerce/