In many industries, artificial intelligence (AI) is seen more as a buzzword than a tangible solution to accelerate outcomes. In fact, resources are commonly used to establish what AI can and can’t do – eCommerce is an exception to this.
In eCommerce, brands have invested in the power of AI. The trend is only set to grow, with a compound annual growth rate (CAGR) of 42.8 per cent in retail and eCommerce between 2019 and 2025. Whether it’s informing pricing strategies and product promotions, or satisfying the demand for more nuanced customer journeys, there’s no shortage of applications in eCommerce.
While use-cases may be too specialised to drive widespread adoption in other industries, in eCommerce, AI enables merchants to add a personal touch to the way consumers buy their goods – convenient given consumer demands for flexibility and consistency across multiple platforms.
So, how are eCommerce merchants turning this technology from a buzzword to a panacea and what can other sectors learn from it?
The eCommerce use-cases
To begin with the most well-known solution - chatbots automate community management, customer engagement and even sales leads. According to Gartner, the average person will have more conversations with bots than with their spouse by 2020. Meanwhile, 70 per cent of white-collar workers will interact with conversational platforms on a daily basis by 2022. AI-enabled bots provide eCommerce merchants with a scalable solution which works around the clock, using natural language processing (NLP) to help people find the right product or make complaints. Equally, they are integrated with organisations’ internal APIs to provide visibility over product availability or assist employees with customer engagement.
Elsewhere, AI helps brands to build meaningful relationships with their customers by making sense of increasingly large volumes of data. When a consumer visits a website, they leave behind a trail of digital breadcrumbs, much of which has been left untapped. However, AI allows retailers to rapidly sift through transactional data to help employees generate insights from trends, purchasing patterns and marketing leads, and turn them into improved decisions.
In the digital era, retailers must be able to contextualise, optimise and narrow down search results for their buyers. AI enables merchants to leverage cookie data and provide consumers with highly tailored offerings. By utilising natural language processing capabilities, image, video and audio recognition, retailers can home in on what it is their customers really want.
Clearly, there is no shortage of use cases for AI in eCommerce. While some are more obvious than others, what is certain is that it enables merchants to provide customers with seamless experiences while enabling employees to do their work more effectively. So how can AI be leveraged successfully?
Laying the foundations
AI is nothing without data. It derives intelligence from the vast quantities of information possessed by organisations, meaning data science and data engineering become crucial. However, deriving insights from this data is by no means easy, and organisations need to ensure that they have the necessary foundations in place to apply analytics.
The problem is that this data is often extracted from fragmented and siloed sources, meaning there is a need to make data more accessible – this requires coherent integration structures. What’s more, screening and aligning this data is a manual process and preparing data can take up a significant amount of time and resources.
Additionally, much of the data needed for AI to perform requires perishable insights. By this, we mean insights where the value degrades over time and which need to be detected and actioned as quickly as possible. Therefore, if companies struggle to collect sufficient amounts of the necessary data, it can quickly be rendered useless.
Preparing data is a complex process, particularly as large organisations tend to have their information spread across multiple sources. This all needs to be aligned if AI is to yield the hoped-for results. This means that data quality becomes a key challenge for eCommerce merchants to overcome, as poor data could prove detrimental – so, when it comes to implementing AI, do the rewards outweigh the challenges?
When to invest
eCommerce stands to benefit tremendously from AI. Already, we see companies shape the buying and selling experience for both shoppers and sellers – AI is forecasted to be worth $27 billion in retail alone by 2025.
Customer experience will be the most significant beneficiary of developments in AI. With consumer adoption of technology and increasing demands for personalisation driving adoption, merchants can’t afford to sit tight. While the technology is costly and difficult to implement, those early adopters will reap the rewards.
Whether or not eCommerce merchants can truly benefit will depend on how prepared they are. Before investing in AI, retailers need to think about the business case, whether there are opportunities to exploit, and whether they have the right data, people and technology.
Ultimately, there is a lot of preparation to do before AI can begin producing results. Organisations need to ensure they have clean, accessible and high-quality data from which they can derive meaningful insights – only then can they ride the hype.
Richard Mathias, Senior Technology Architect, LiveArea