How artificial intelligence is shaping the future of e-commerce


Artificial intelligence is a technology that many people still compare to something out of a futuristic movie from days gone by. While for the uninitiated the words artificial intelligence may conjure up images of humanoid robots, the reality is that AI is already ubiquitous and widespread in society.

Almost everyone has daily contact with artificial intelligence. From using the face recognition feature to unlock your cell phone to asking Alexa to play your favorite song. So, whether they know it or not, most consumers are already interacting with artificial intelligence and enjoying its benefits every day.

With so many people having only a vague idea of ​​what artificial intelligence is, it is little wonder that its potential remains unrealized by the general public. But one area where the power of artificial intelligence is undoubtedly getting the attention it deserves is in the e-commerce industry.

Why e-commerce needs AI

In recent years, the e-commerce industry has developed at an unprecedented pace. Online shopping in the United States has hit a staggering $1.7 trillion in the two years since the pandemic began. This represents a 55 percent increase in online spending.

It’s no secret that e-commerce has been one of the few sectors to benefit from the pandemic. But long after brick-and-mortar stores reopen, e-commerce stores are expected to continue generating more sales than they did before the pandemic. Online shoppers in the US are expected to spend $1 trillion this year alone.

Considering the industry seems to be booming, it’s easy to think that ecommerce stores might not need some extra help to turn a profit. But while there seem to be plenty of online shoppers ready and waiting to part with their money, the competition for these customers is incredibly fierce.

According to Internet Retailing, the number of e-commerce start-ups skyrocketed in the first four months of the Covid lockdown. It is estimated that 85,000 companies have either set up their own online shops or joined online marketplaces. This means that the competition between the online retailers is fierce.

In order to cut through all the noise and get their business known, online retailers have to work hard to grab the attention of potential customers. To get noticed, they need the right tools to get there. While advertising campaigns are one way to capture consumer attention, artificial intelligence offers a variety of additional opportunities.

The use of artificial intelligence in everyday life continues to increase and offers convenient solutions. But for e-commerce retailers, artificial intelligence is used to improve users’ shopping experience on their websites.

Ultimately, the use of artificial intelligence will help online retailers to further increase their sales and improve the user experience of visitors to their websites.

Marketers are increasingly focusing on the customer journey and customer experience. Artificial intelligence offers a way to further unlock the customer journey and create an enhanced experience for each customer.

Use of artificial intelligence in e-commerce

While it’s obvious why online retailers need to use artificial intelligence, how they use it is important. The extent to which artificial intelligence can be used in e-commerce is enormous. The potential for e-commerce businesses to benefit from artificial intelligence is already significant and will only increase as the technology evolves.

While all technologies are evolving rapidly, artificial intelligence seems to be at the top as one of the fastest. This is an exciting prospect considering artificial intelligence has already improved so many aspects of modern life.

But the next time you surf online, you might want to know how artificial intelligence works in an e-commerce environment. Knowing which aspects of your shopping experience are influenced by artificial intelligence is fascinating. Here are just some of the ways AI is being used by ecommerce stores:

Artificial intelligence for customer care


Chatbots are an area of ​​artificial intelligence that many people are familiar with. Chances are, in your life as a consumer, you’ve used a chatbot without really thinking about it. However, chatbots serve an important function for ecommerce stores and will continue to do so in the future.

Even with the best of intentions, your customer service team probably won’t be able to provide 24/7 service. Scheduling employees to work night shifts to provide customer support is usually not wise and probably not an effective use of their time.

However, it is crucial to have some level of customer support available for those visitors who visit your site at night. When you run an ecommerce business, you’re never really closed; Visitors from anywhere in the world could browse your website at any time of the day or night.

The effectiveness of adding chatbot software to your website has been proven many times. A chatbot feature increases the likelihood that a customer will make a purchase on your website and also increases the average order value. So, the benefits of deciding to add a chatbot to your website are clear.

While the capabilities of chatbots may have been limited in the past, today there are a variety of ways this software can be used.

Chatbots can be used to provide answers to frequently asked customer questions. Answering simple questions is the main function of chatbots. This is of great help when trying to reduce your team’s workload and get customer queries answered faster.

Additionally, chatbot software can be used to provide live agent support when customers require a more personal approach. This can be in the form of contacting the customer and answering their questions over the phone or using the live chat option to send messages to the customer. Having a range of chatbot options available is a great way for ecommerce businesses to cover every potential touchpoint without delaying customer response times.

Artificial intelligence to increase conversion rates

Conversion rates are a hot topic for ecommerce merchants. Conversion rate is the percentage of people who take the desired action on your website. So this could be a purchase or signing up as an email subscriber.

There are several ways artificial intelligence can be used to help online retailers increase their conversion rates. One of the most meaningful ways artificial intelligence can be used to increase conversion rates is to prevent abandoned carts.

Abandoned carts before reaching the checkout are a common problem for online retailers and a frustrating problem. You can use artificial intelligence to collect data about your website visitors.

If a cart is abandoned, you can send the customer automated cart abandonment requests. This can be an email reminding them that they still have items in their cart, or a discount code encouraging them to return to the site and complete their purchase.

Artificial intelligence to create personalized customer experiences

Research from McKinsey & Company shows that consumers expect personalized experiences when shopping online. The Next in Personalization 2021 Report found that 71 percent of consumers expect personalized experiences when shopping online, and 68 percent of consumers are frustrated when they don’t receive this personalized service.

The report also highlights that companies that are successful in personalizing their customer experience can achieve financial gains. Businesses that personalize the shopping experience generate 40 percent more sales than businesses that don’t personalize as much.

This shows that companies urgently need to prioritize personalization, but how can artificial intelligence help achieve this? Here are just a few of the ways artificial intelligence can create a personalized customer experience:

Personalized product recommendations based on previous purchases and recent website browsing data.

  • Offering meaningful discounts that the visitor is more likely to take advantage of.
  • Location-relevant content based on where the customer is currently located.
  • Suggest add-ons related to the items in their cart.

As you can see, there are many ways to use artificial intelligence to create a tailored customer experience for your website visitors. Implementing personalization methods should help increase your sales, reduce your bounce rate, increase your conversion rate, and increase customer retention.

As an e-commerce retailer, having a better understanding of your customers will always be a key benefit. Artificial intelligence and machine learning can help you make better use of your customer data.

Organizing your data effectively and continuously collecting more will produce tangible results for your business. As soon as you start using artificial intelligence in your company, you should see significant results in a short time.

It is beneficial to continue working with this technology to be at the forefront of the next exciting stages of its development and see how it can bring further benefits to your ecommerce store.

Main image of sujin soman from Pixabay

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