Online trade is one of those sectors that artificial intelligence has affected the most. Not only is this technology helping customers in their shopping journeys, but it also allows e-sellers to make more money.
In this post, we want to show you five applications of this technology in the e-commerce industry. If you run an online store, this article is a must-read for you!
Most online stores use AI in five crucial areas:
- Chatbots/virtual assistants
- Smart pricing strategies
- Improved product search
- Product recommendations
- Smart inventory management
Let’s see how you can use these solutions to improve your online store.
Chatbots improve CX
If you want to introduce instant, 24/7 customer support to your business, there is no better option. Today, chatbots are driven by AI-related technologies, which means they can deal with many different tasks, from answering frequently asked questions to assisting customers during their shopping journey. As a result, your customers can get (almost) all the information and support they need without engaging your staff.
Today, there is a broad selection of ready-made, no-code chatbots that you can implement in your store but also on your social media profiles and in messaging apps (think Messenger and WhatsApp). This way, you can offer personalized and timely communication with your customers.
Later in this text, we mention personalized product recommendations. This is something chatbots can be used for as well. By analyzing customer behavior and preferences, chatbots can suggest the right products or turn your customers’ attention to current hot deals and promotions, thus encouraging them to buy more products in your store. This way, a virtual assistant can both help you increase CX (customer experience) in your store and help you close more deals. Almost entirely for free!
Tweak your pricing strategy with dynamic pricing
Dynamic pricing is another interesting application of AI in e-commerce. This technology is based mostly on machine learning and it allows you to analyze prices in competitive stores so that you can adjust prices in your store in real time based on various factors and current market conditions. As a result, you don’t need to worry about checking and updating prices manually, automated dynamic pricing algorithms do so for you, 7 days a week.
What’s also important is that dynamic pricing is an advanced solution that operates on your predefined rules, so you don’t need to be afraid that the algorithm will start selling your products below your profit margin. Plus, many dynamic pricing tools enable you to retain the right to accept/decline all the changes proposed by the algorithm. The goal of this technology is for your store to have competitive prices all year round. The result? Higher profitability of your business.
Smart product search
While traditional keyword-based searches are still very popular, sometimes customers aren’t sure of what they are looking for. In such a situation, smart product search (e.g., image or voice-based) can help them find the perfect product without the need to contact your customer support. This way, you can save a lot of time and lower cart abandonment in your store (keep in mind that every dropped cart is a lost sales opportunity!).
Smart product search engines use such technologies as NLP (natural language processing) and machine learning to support customers in looking for a perfect product that matches their needs or description. Here, visual search is one of the most important solutions. By allowing customers to search for products using product photos instead of text, visual search engines can deliver more accurate results. Here’s how it works:
- A customer uploads a photo of an item they like or need (they can use both their photos and those they found online)
- The AI-powered smart search engine identifies the product and suggests products that are available in the store and are the same as/similar to the product the customer was searching for.
This whole process takes just a few seconds and can be extremely helpful in such market sectors as:
- Fashion and footwear
- Home decorations
- Tools and gardening equipment
- Sporting equipment, and more
Personalized product recommendations
Personalized recommendations are a must for every successful online store. This technology is also frequently backed by AI. By analyzing available product and customer data (including browsing history, past purchases, and customer preferences), AI can provide your users with product recommendations that are personalized to specific customers. As a result, you can improve the overall shopping experience by helping customers discover products that match their needs. The end result is, of course, a higher probability of receiving an order.
Personalized product recommendations can also be used to introduce upselling and cross-selling to your business. If a given person is interested in a specific product, e.g. a cell phone, why not provide them with a suggestion to buy a higher model (upselling) or add some accessories to the order (cross-selling)? Product personalization engine can do that for you, entirely on auto-pilot!
Enhanced inventory management
The last application of AI in e-commerce that we want to mention is related to inventory management. By analyzing historical sales data, market trends, and customer behavior, AI-powered tools can forecast future demand and optimize inventory levels so that your store doesn’t have to worry about understocking/overstocking. For example, your AI tool can help you identify products that should be popular in the coming weeks/months as well as those slow-moving ones so that you can keep your stock levels fully optimized.
Use AI in your online store!
If any of those applications sound interesting to you, it’s time to think about implementing AI-powered solutions for your online business! You can do so on your own, or you can start working with a trusted AI consulting company, such as Addepto. This company has experience with both tailor-made and generative AI so that they can help clients of different sizes, budgets, and market sectors. If you want to know more, visit their website: https://addepto.com.
