Here are just a few notable examples of AI in ecommerce.
Making Product Recommendations
As a shopper, you may be pleasantly surprised from time to time by uncannily accurate product recommendations. How do they know? Unless you’re making a purchase from an individual seller can learn your preferences and make suggestions accordingly, you’re likely seeing AI in action.
Recommendation engines harness AI to make intelligent recommendations to shoppers based on factors like their preferences and previous onsite behaviors. In other words, this technology can predict the likelihood of a certain user liking certain items—allowing it to make recommendations with a higher chance of converting. Plus, customers tend to be impressed by companies they feel truly understand their preferences.
More Personalized Marketing
Programmatic advertising is changing marketing because it allows marketers to assemble personalized ads. Or rather, AI algorithms can now assemble personalized ads on the fly based on user behavior and target lookalike audiences. This is an especially useful tactic in retargeting campaigns aimed to show users products highly suited to their wants and needs.
What does this mean for customers? Retail Tech News writes, “You will see banners, not only with products you browsed and didn’t buy, but also with products you most likely will end up buying (based on the behavior of similar users).” This is one of the ways AI can play a direct role in boosting conversions.
It’s expensive to end up with leftover inventory. Sure, you can always hold a flash sale in hopes of unloading slow sellers at the end of a given season, but there’s no guarantee customers will take the bait. Conversely, unless you’re aiming for exclusivity as part of your brand image, it can damage your reputation to run out of stock. When customers already have their wallets out, the last thing you want to do is turn away their business with your “SOLD OUT” product warnings. The best enterprise ecommerce solutions make it easy for merchants to monitor their product catalogues, upload new products and customize Courts (www.uscourts.gov/) their listings. But AI is now making it even more intuitive to keep track of what’s in stock, what’s running low and what’s sitting on the “shelves.”
AI can help make decisions about reordering and liquidating. This makes inventory management simpler for employees and lessens the risk you’ll either have too much or too little of a given product.
Flagging Fraudulent Transactions
Fraud ends up costing ecommerce retailers far too much every year. And its highly doubtful fraudsters will ease up on their efforts anytime soon. Luckily, AI is helping ecommerce merchants fight fraud and protect their bottom lines.
How? One branch of AI, machine learning, enables systems to learn, predict and act over time—without the need for human data scientists to manually program them. By assessing risk, these machine-learning algorithms can flag fraud and continue to get better at identifying “fishy” traffic or fraudulent payments over time. This represents an opportunity for humans and AI systems to work together as these flagged transactions move up the chain to a human analyst for approval.
There are many applications for artificial intelligence in ecommerce. Forward-thinking merchants should embrace these solutions sooner rather than later.