Artificial intelligence (AI) has been a game-changer for the retail and E-commerce industries. According to Statista, retail sales are projected to amount to around $30 trillion by 2023.
Source: Statista
According to Nasdaq, 95% of purchases will be facilitated by E-commerce by 2040. No doubt, AI will be shaping retail digitization. AI has pretty much to offer the retail industry. Depending on the nature of a business, audience, the pace of development, AI implementation can bring a set of unique perks to most retailers.
AI cannot guarantee your company overnight success. But it gives much food for thought and informs decision-making processes. Therefore, B2C, B2B E-commerce, and retail businesses need human expertise. Along with that, consulting on custom-tailored AI software development can ensure you some most valuable AI inferences.
If you’re curious to know how to adopt big data, intelligent assistants, automation, and augmentation into your retail business, read on to learn 12 ways of how AI can be used in retail for your business to flourish.
1. Big Data
Online retailers gather and process lots of data, but all the data needs to be analyzed to bring in value. The collected data can fit into such categories as Behavior, Action, and Product. Companies can harness big data for problem-solving and creating solutions to help address business challenges.
Predictive analytics solutions can increase sales, revamp customer experience, and facilitate attracting new customers. Predictive analytics help retailers analyze masses of historical data on user-product interactions. Using them, it’s easy to see how customers respond to your products, spot customer churn, and find out your business strengths and weaknesses. Getting the analytical insights, a retailer makes the shopping experience cater to a specific audience and exact users. If the service or products are fine-tuned, customer loyalty and greater sales guaranteed.
2. Demand Forecasting
Understanding and predicting customer actions is not an easy thing to do. If you run a startup or want to enter a new market, demand forecasting is one of the critical aspects you need to concentrate on first. If you can’t anticipate customer expectations, then your business may be in trouble. As you have a grasp of your market and can discover the situations that would cause your clients to act differently, you will be able to decide on the options of making your product or service more useful to your customers.
AI use cases in E-commerce suggest an array of ways to augment business with technology. By improving supply management and reducing costs, IKEA has gained an edge over competitors. The company delivers high-quality goods at a price 30% lower than the cost offered by the competitors. Running operations globally, IKEA has to tackle issues with demand maintenance and do it with success. The global supply chain relies on accurate forecasts possible due to automation with advanced technologies, including custom-tailored software. Demand forecasting applications help improve data visibility and run a robust risk management strategy.
3. Recommender Systems
Rich datasets can breathe life into recommender systems. One of the most known uses of AI in E-commerce for generating recommendations is Amazon’s recommendation engine. It provides millions of users with a personalized web page when they visit Amazon.com. Another industry giant Netflix saves $1 billion yearly thanks to AI-powered systems and delivers 75% of content to users through targeted recommendations. Big data lies underneath those solutions, and you can learn more about it here.
Source: Play.google.com
A recommender system is a must-have for E-commerce providers and online retailers. Using such custom solutions, you can increase sales, boost user satisfaction, and manage to understand users’ needs better.
4. Localization of Customer Experience
It is another level of personalization. And it is one more example of AI in E-commerce completing data-related tasks with maximum efficiency. Such an option is great for providers and promoters of booking services, tours, entertainment activities, and events. Seeking new ways to generate revenue, companies offer local recommendations to their clients.
AI-driven solutions can piece together various types of information on consumers and provide insightful inferences based on that. IBM Watson enables natural language capabilities that make automated interactions with consumers and gathering of valuable data possible. As a result, consumers can make informed decisions in a matter of seconds and receive non-trivial recommendations aligned to their current location.
5. Automated Warehouse Processes
Optimization and robotization within warehouses allow reducing costs of manual operations and offer time-saving ways to manage inventory. Computer vision-powered robots, like those hosted by Amazon’s or Ocado’s warehouses, can recognize, pick, wrap, and distribute items several times faster than human employees. To add more, automated invoice filling-in and processing help escape errors and ensure that the right customer will get the ordered item.
Smart warehouses allow managers to relocate the human workforce and increase productivity. Operations bound to predictable physical actions, data collection, and data processing are most likely to become fully automated in the short run.
6. Augmented Reality
It is one of the most amazing opportunities for retailers to provide unforgettable customer experience and persuade customers to come back for mere purchasing in the future. AR technology fills our real reality with virtual objects, visual effects, or captions and gives the engaging experience of the fusion of what is real and what is virtual. AR finds wide applications in games and along with that, retail and E-commerce. It powers such solutions as AR Mirror and Virtual Dressing Room, which allows customers to see without trying on how pieces of clothes, footwear, or glasses, or other items of their choice look on them without trying on. Amazon and IKEA have already put into practice cutting-edge solutions.
Source: Play.google.com
IKEA Place mobile app lets users put 3D versions of furniture in real rooms over the smartphone camera. Virtual furniture is easy to turn at any angle and place in any corner. Consumers can now find out in advance whether an interior item will fit into a place and whether it will look beautiful with the overall design.
7. Visual Search
As a part of the computer vision field, visual search draws the attention of B2B and B2B companies of various sizes. The AI in the computer vision market is projected to hit $25,32 billion by the year 2023. AI-enabled visual search engines, like Google and Kiddle, ASOS, to name a few, transform the future of e-commerce today.
Visual search is a proven and useful application of AI in E-commerce. Industry leaders utilize it to optimize websites and offer a more intuitive customer experience. However, the function is not yet as accurate as text search. The AI algorithm behind the scene needs massive datasets to learn to pick the right options out of millions of images. The technology experiences significant improvement currently, and in a short while, it will be used at its full capacity. So, it is high time to optimize your website search engine for image-heavy queries to get prepared for the future.
8. Automated Product Tagging
Machines can learn to identify different visual attributes automatically, which can be useful for product tagging in a catalog. For instance, a leather jacket can get the tags “long sleeve,” “black,” and more automatically. It is a time-saving and swift process that only requires approval from a human employee. Automatically generated tags are essential for text or visual search, targeted recommendations, and smooth customer experience as a whole.
Automated product tagging assists with managing catalogs and improving the searchability of items across the web. Moreover, it comes as a great help as it allows automatic suggesting similar purchasing items based on customer preferences. That capability can increase the size of an average order.
9. AI Integration into CRM
To gain leading positions in the market, retailers can harness the benefits of AI in E-commerce regarding the creation of more efficient sales processes. Automated problem-solving solutions are the key to streamline strong sales processes and let AI do this work far more efficiently than humans. Integrating AI into your CRM can facilitate you getting in touch with customers at the right time and on the right platform. AI-enabled voice assistants can address customer queries and solve a range of some most common issues while completing multiple tasks simultaneously.
Such technologies as speech recognition and natural language processing empower well-known assistants Siri and Alexa and also chatbots to replace humans. And artificial employees progress in doing it better and better. Custom-tailored speech recognition solutions with the capability of integration into the existing CRM is the way to provide new opportunities for your sales team.
10. Useful Insights into Customer Behaviour
Unsurpassed customer experience is one of the cornerstones of a successful company. To achieve that milestone, retailers and e-commerce providers can leverage AI to analyze customer data, assess, and predict customer behavior.
AI helps marketers monitor to what extent the website is user-friendly or whether the language of emails and chatbot-generated answers is engaging enough. Machines can automatically gather comprehensive data about the way users navigate the site, pages they click first, the level of engagement, and more.
Also, AI can successfully monitor money transfer activities and ensure errorless operations and servicing users 24/7. Consumers can get instant answers to simple FAQs. All those customer actions can provide marketers with valuable data on behavior. Automated systems collect that data and then let human analysts make data-driven strategic decisions based on customer preferences and habits.
11. Price Optimization
An optimal and competitive price stems from customer preferences. Self-learning AI-driven algorithms analyze massive amounts of data and suggest the best pricing options. The longer a company uses such algorithms, the more precise the suggestions get. The reason is that AI solutions learn from historical data.
However, implementing AI can not solve all the matters. Business owners should have a clear understanding of the business goals and take into account the development perspectives. In this case, it will be possible to load AI solutions with meaningful tasks and use the inferences properly to get valuable results.
For example, Walmart and Amazon use AI price optimization capabilities to fine-tune their existing pricing strategies. That is another way new technology assists in satisfying and anticipating customer desires to end up maximizing revenue.
12. Brand Monitoring and Reputation Management
Among the applications of AI in E-commerce that we overview in this article is monitoring brand visibility and customer feedback on products and services. What your customers think about your brand dramatically impacts the whole strategy of your business.
Source: Pexels.com
Browsing through social media is a time- and resource-consuming daily task. By adopting AI, you can fully automate this task and provide your marketing team with more time for creative and intellectual tasks.
AI will help you estimate the scale of customer satisfaction by detecting and analyzing positive, neutral, and negative reviews online. It is fantastic if your brand receives only words of praise. But even if you offer top-notch products or services, competitors may attack your brand by posting and sharing fake unfavorable reviews. Automating the process of searching and detecting brand mentions in a fake context, you can manage and support the good reputation of your brand.
Running a marketing campaign, you can employ AI to assess the results. Algorithms can monitor brand exposure during mass events and collect relevant data to help you understand whether your investments into ads have paid off or not.
Bottom Line
The benefits of artificial intelligence in E-commerce and online retail that your company can enjoy are diverse and depend on the niche your business occupies in the market and the goals you set to achieve. In this article, we have covered only a range of ways how you can implement AI to get rapid and tangible results.
InData Labs offers expert consulting on developing custom AI solutions for E-commerce and retail. We are here to help you decide on a solution that will perfectly augment your business strategy, provide teams across departments with task automation options, and let in advanced technology to revamp your business in line with the latest tendencies.
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Have a project in mind but need some help implementing it? Drop us a line at info@indatalabs.com, we’d love to discuss how we can work with you.
