What are the benefits and challenges of AI in e-commerce?
Businesses gain from e-business by being able to access customers globally at a low cost and without regard to location. Improve your time management and communication skills to become more adaptable and efficient. However, there are drawbacks as well, like expensive maintenance expenses, technological constraints, and security vulnerabilities.
Six Benefits of Artificial Intelligence for the Ecommerce Industry
Many large e-commerce giants, including Amazon, Sephora, and IKEA, are already leveraging the benefits of AI and machine learning to streamline their operations. Plus, your business can make the most of it. Here’s how:
1. Product Recommendation
One of the most important ecommerce metrics for retailers is average order value. The AOV of your ecommerce business has a direct impact on the revenue generated and can be improved with the help of artificial intelligence.
AI can use collected data to influence customers’ product purchase decisions based on knowledge about products searched, previous orders, and browsing habits. If you provide relevant product recommendations, customers won’t be able to ignore them and will end up spending more in your online store. A win-win for your business!
2. Powerful search experience
One of the main reasons customers leave your ecommerce store is because they can’t find the product they want. Online businesses typically have large product catalogues, making it difficult for consumers to find what they are looking for.
Therefore, creating a robust and accurate search experience is essential. Artificial intelligence is a technology that can help you achieve what you need. It helps create a search engine that acts as a sales representative by providing customers with the right products.
Alternatively, e-commerce businesses can also integrate AI-powered search software like Doofinder and SearchUnify to deliver a better search experience.
3. Better customer service through chatbots
With the help of AI, e-commerce businesses can respond to customer inquiries 24/7, increasing conversion rates and sales.
As customer demands increase and patience becomes scarce, it is essential for e-commerce businesses to be responsive and provide fast customer service. Chatbots provide a personalised customer experience by directing customers to specific product pages or FAQs to help them find the best answers to their questions.
4. Optimised price
Pricing plays an important role in B2B as well as B2C businesses. You can also change your prices based on supply, demand, and many other factors to find the best price for your business. AI can help you do this efficiently.
With access to the right customer data, AI tools can predict the right price and discount amount for products to maximise sales and profits.
5. Effective marketing
Ecommerce marketing is all about understanding buyer behaviour and adapting your offers accordingly. Ecommerce marketers can use AI to understand their customers and learn their preferences easily and effectively, segmenting them into different groups for effective marketing.
Providing personalised content and marketing can also increase customer retention rates.
6. Trend prediction
That’s right. Artificial intelligence can help you predict the future and tailor your offers
accordingly. Post-pandemic, many businesses want to plan their inventory with real-time and historical data in mind. AI can help you do this in a profitable way.
You can use it to identify future sales and demand patterns based on customer behaviour so you can plan inventory and prepare your delivery team accordingly.
Ref: Rathnakar Reddy
