AI to Have Larger Role in eCommerce
Artificial intelligence (AI) already has a large role in eCommerce. But as the digital marketplace gets more competitive, expect AI to be used to greater advantage.
The coronavirus pandemic upended the ways many companies are doing business. While many filed for bankruptcy or closed shop, many also remain and continue to flourish. They are the ones who either had an active online presence before the pandemic or quickly pivoted online in the early months of the pandemic.
eCcommerce emerged at the top of the heap among online businesses. In 2020, American retailers enjoyed $861.12 billion in sales, an increase of 44 percent over the previous year.
With more businesses moving online, the digital marketplace is becoming more competitive. This means all available tools are being used to have an edge over competitors. Artificial intelligence (AI) is one of the tools that continues to evolve and is being increasingly utilized by eCommerce companies.
Robots and eCommerce
Even before the pandemic, Amazon was already using robots in its warehouses to fetch items for workers to pack and ship. This year, Walmart announced its intention to build warehouses in its stores and have self-driving robots fetch groceries for workers to bag and shoppers to pick up at curbside.
Robot vision AI enables the robots to pick the necessary items from bins. Manufacturing companies use the same technology when robots pick up jumbled items from a conveyor belt and pack them in a certain arrangement. They can also reprogram the robots to do damage detection and segregation at the same time. As eCommerce grows, more companies will automate their warehouse packaging.
Robots can likewise deliver goods. Amazon is close to its goal of using drones to deliver small items to customers, pending full compliance with new regulations from the Federal Aviation Administration (FAA). Once self-driving vehicles are also fully operational and approved for use by the government, they can transport larger packages for delivery.
Long before delivery of the product to the client, AI can be present every step of the way, beginning with marketing.
Price is a major factor for many consumers. An online retailer can use AI to do a quick research on competitors' pricing and make their own prices competitive. They can implement dynamic pricing which means the price changes from time to time based on demand, supply, competition price, and subsidiary product prices. This is sometimes called surge pricing, demand pricing, or real-time pricing. The price can also change based on a customer's purchase habits.
Using AI, an online retailer can present targeted offers to its website visitor based on the visitor's browsing behavior. For instance, a limited-time sale price can pop up when a product is browsed.
A recommendation system will add more options for the visitor. AI can display items similar to what the visitor is looking at. Such personalization increases the chance of a sale. It is best to add an AI-powered search engine on the website so that internal searches turn up accurate and personalized results.
Online retailers can use AI content generation to create product descriptions and to customize these, as well, for each visitor's interests and preferences. Customer reviews on the website are powerful marketing tools. Companies can use AI to filter fake reviews by verifying that reviews are from legitimate customers.
AI chatbots and voice assistants are available 24/7 to answer queries from customers or solve problems. Using the chat history, an online retailer can identify leads that it can follow up on through email marketing. Payment systems using AI are very convenient for consumers and convenience results in more sales. With AI, an online retailer can accept payments across various platforms.
An online retailer needs to streamline its systems from sales to inventory updates to the supply chain. Without an integrated system, inventories can run low, and backlogs of orders can occur, which can backfire as customer displeasure.
Using AI, a sale can automatically update inventory and send an alarm once inventory reaches a certain level. This in turn triggers a reorder for the product long before it is sold out. This way, there is no gap in sales, especially for fast-moving products. On the other hand, AI-powered demand forecasting can prevent overstocking of certain items and having cash tied up in inventory.
AI and Human Power
At this point in our history, the strength of AI still lies in how its human user maximizes its powers. If not deployed properly, it will not produce maximum profit.
Online retailers must keep up to date with innovations in AI and how they can use these to the greatest advantage in their business. In the crowded digital marketplace, the one who knows how to wield this tool best will come out the winner
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