The use of artificial intelligence (AI) in the retail market isn’t exactly new. However, retailers are changing the way they’re applying AI to their operations.
Today, we’re looking at how AI is changing eCommerce, and what this means for online retailers looking to stay competitive.
The Role of AI in eCommerce
By implementing advanced AI systems (and ERP systems with AI capabilities), eCommerce retailers are able to move beyond traditional uses of AI. Instead of using AI simply for predicting demand, they’re using it for use cases such as improving their inventory management strategy.
1. Optimizing Inventory Management
The first use of AI in retail continues to be one of its most prominent. With this technology, eCommerce retailers are optimizing their inventory management by forecasting demand, automating restocking, and more.
In turn, companies are reducing the risk of over- or under-stocking, helping them conserve costs and improve buyer satisfaction.
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2. Personalizing the Customer Experience
Research shows that 84% of online shoppers are influenced by the level of personalization they receive. In addition, 88% are more likely to continue shopping on an eCommerce website if they feel like the content is catered to them, and 68% have bought an item on impulse simply because a retailer’s website recommended it to them.
Personalization is a tall order for retailers, especially ones that cater to a wide range of demographics. Artificial intelligence is making this easier.
Using machine learning algorithms, AI technology can quickly analyze vast amounts of consumer data. Then, it can use those insights to recommend products that might interest shoppers based on criteria, such as:
- Purchase history
- Browsing history
- Shopping cart history
- Time spent on product pages
- Other online behaviors
3. Streamlining Customer Support
If you’ve ever sat on hold waiting for someone at a retail support center to answer your call, that frustration might soon be a thing of the past.
Retailers are increasingly deploying AI-powered chatbots that answer frequently asked questions and guide online buyers through self-service portals.
This means that most inquiries can be resolved without the need for any human intervention. Inquiries can also be answered around the clock, even outside of the traditional 9-to-5 hours that many call centers maintain.
In addition to providing customer support, these bots can provide personalized shopping recommendations based on purchase history, while others can assist with content creation, marketing, and outreach efforts.
4. Improving Product Search
When customers can’t quickly and easily find the products they need online, they’re more likely to abandon their shopping cart and head to a competitor’s page. With AI solutions, this is less of a risk for eCommerce retailers.
Today, buyers can use AI-powered search tools to search for products using images instead of keywords. Especially in niches where visual elements are often more influential than textual ones (i.e., fashion and home decor), this technology is especially promising.
5. Accelerating Fraud Detection and Mitigation
It only takes one fraudulent transaction to ruin a retailer’s good reputation. This is why many businesses are implementing AI software that stops those scams in their tracks.
This technology uses various data points to detect anomalies and identify suspicious buying patterns. Data points of interest might include:
- Transaction history
- Buyer location
- Buyer behavior
Staying ahead of this issue can help retailers lower their chargeback rates and prevent further losses. This also gives customers an extra sense of protection and security when browsing an eCommerce site.
The Role of Generative AI
When we talk about the ability of AI to analyze past behavior and forecast future actions, we’re referring to predictive analytics. This is different than generative AI.
This type of AI doesn’t simply review past content but creates new content. Using natural language processing (NLP), it generates photos, short stories, and more.
In retail, generative AI can create tailored content based on buyers’ needs and preferences. eCommerce retailers can use this technology to perform tasks such as:
- Writing website content, landing pages, and product descriptions
- Creating ad copy
- Crafting email newsletters to subscribers
- Testing different marketing and promotional campaigns
Retailers who want to take advantage of these capabilities should look for ERP, CRM, or SCM systems with integrated generative AI functionality. This way, they can store all of their valuable data in one central location, where all authorized users can access it.
Discover More About How AI is Changing eCommerce
AI is reshaping eCommerce in many unexpected ways. From fraud detection and enhanced product searches to personalized content, these tools are becoming must-haves for online retailers.
To learn more about software selection and how AI is changing eCommerce, contact our enterprise software consultants below for a free consultation.