How Can Artificial Intelligence and Machine Learning Improve Profitability in E-Commerce?

How Can Artificial Intelligence and Machine Learning Improve Profitability in E-Commerce?

If you’ve spent any time reading about the technologies and trends that will steer the e-commerce industry into its next generation, you’ve almost certainly come across artificial intelligence and machine learning. The world’s most advanced e-commerce companies – most notably brands like Amazon – have leveraged their considerable cloud computing power to build online sales platforms that are extremely effective at attracting and retaining customers while maximizing the revenue earned from each purchase.

If you operate a small e-commerce business, you might assume that technologies like artificial intelligence and machine learning couldn’t possibly be available to a company on a tight budget. That, however, is completely incorrect because the public cloud has effectively democratized supercomputing power for everyone. More software developers than ever are now offering cloud-based artificial intelligence and machine learning solutions for small businesses like yours, and they can enable you to do things that wouldn’t have been possible just a few years ago. These are just a few of the ways in which cloud-based artificial intelligence can transform your e-commerce business.

What Are Artificial Intelligence and Machine Learning?

Before we discuss the specific ways in which artificial intelligence (AI) and machine learning (ML) can help your e-commerce business, let’s learn a bit more about what those things are and what they can do. The purpose of AI and ML is to analyze complex data sets and draw conclusions that might be impossible to draw yourself. AI and ML can use whatever data you provide, whether it’s your sales information, your product inventory, your customer database or something else. Most importantly, modern AI and ML solutions are designed to integrate seamlessly within most popular e-commerce platforms. They’ll pull the required data automatically, and you don’t need to be a software developer to get useful information out of them.

Chatbots Provide Better Service While Reducing the Load on Your Staff

Have you ever needed to contact Amazon about a problem with an order? If you have, you’ve probably noticed that Amazon’s first tier of customer support isn’t a human at all – it’s a chatbot. By defining simple rules about how to resolve the most common customer complaints, Amazon’s chatbot can resolve most issues without requiring any human support representatives. That’s crucial for a company that earns more than $800,000 per minute, but it’s also something that can benefit businesses of any size. UK vape shop V2 Cigs, for example, has also implemented a chatbot with great success. Chatbots help your company save money by reducing the load on your customer service staff, and they’re also good for customers because they’re available 24 hours and can resolve most issues with no waiting. If you implement a chatbot, though, it’s important to always provide a way for customers to reach human representatives during business hours. That way, people can always get personal attention when they need it.

Intelligent Product Recommendations Improve Your Revenue Per Sale

Another thing that you’ve probably noticed as you’ve shopped online is automatic product upsell and cross-sell recommendations. This is another area where Amazon excels. If you’ve tried using the product recommendations built into your website’s e-commerce platform, however, you probably haven’t gotten the same results because the recommendations aren’t based on anything other than keyword matching. AI can combine keyword matching, natural language processing and customers’ purchase histories to make more relevant product recommendations even when keyword and purchase data are sparse.

Intelligent Search Helps Customers Find What They Want

AI can also greatly enhance your website’s built-in search function. One of the biggest shortcomings with site searching is that it’s generally based solely on keyword matching. Without an understanding of what the words actually mean, your site’s search function may fail to turn up relevant products or may even suggest products that aren’t relevant at all. AI can powerfully enhance site searching because it’ll understand synonyms and can suggest relevant results even in cases where the searched-for keywords aren’t present in the results. Image processing can also enhance search results by understanding what products are, what colors they are and so on.

Marketing Automation Generates Sales You Might Otherwise Have Lost

What currently happens on your website when a customer adds a product to the shopping cart and leaves without completing the purchase? If your website is like most small e-commerce sites, the answer is probably “nothing.” Marketing automation can change that, and it’s one of the most powerful features that AI has added to the world of e-commerce. For example, suppose that an existing customer – whose contact information you have – has added a product to their shopping cart and left without checking out. An AI engine can automatically send a cart reminder email or perhaps even a well-timed coupon that helps to seal the deal. Marketing automation also works with people who aren’t your customers yet, by deploying multichannel targeted advertisements that keep your brand at the top of potential customers’ minds as they visit other websites.

Intelligent Supply Chain Management Helps You Stock the Products Customers Want

When you think about how you currently manage your business’s supply chain, does the answer ultimately come down to intuition? If that’s the case, it’s likely that you occasionally lose sales because the products customers want aren’t always in stock. AI can manage your supply chain more effectively by analyzing your historical sales trends – even taking individual customers’ buying habits into account. AI can predict when customers will want certain products and when your existing stocks are likely to run out. You can even have your website manage its own inventory by automatically ordering products when needed.

Intelligent Sales Projections Help You Understand the Future

Speaking of predicting the future, AI doesn’t only have the ability to help with managing your inventory. You can usually expect, for instance, that your sales will increase during the holiday shopping season. Can you actually predict, however, exactly how big the increase will be? Do you know how many new staff members you’ll need to hire in order to handle the expected demand – and can you be certain that the revenue from the increased sales will outweigh the cost of those new hires? AI and ML can help you guide your company into the future far more effectively than you could ever do with intuition alone.

About Haider Ali Khan

I'm an Independent Cyber Security Researcher, a geek who loves Cyber Security and Technology.