The Impact of AI on Ecommerce: Benefits and Examples

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Love it or hate it, artificial intelligence (AI) has become the talk of the town.

Whether it’s the uproar surrounding ChatGPT, or AI’s burgeoning battalion of uses – from neonatal intensive care to predicting the next food crisis – the technology hogs its fair share of the headlines, especially in regards to AI website builders.

But there’s one industry, in particular, where AI is changing the game for the better – without any of the controversy.

We’re talking, of course, about ecommerce.

AI in ecommerce is reshaping the way online businesses price, market, and sell their products. And redefining the way these companies operate – from ordering and storing stock to responding to customer queries.

So what is AI, what are its benefits in ecommerce, and how can your business leverage AI to sell smarter, smoother, and more strategically?

Let’s take a look.

What Is AI?

AI stands for artificial intelligence.

Now with widespread purposes in – and implications for – modern life, AI refers to the ability of machines to perform tasks that were once the domains of humans alone.

Learning, reasoning, perception, problem-solving: things that formerly needed our gray matter to achieve can now be done by computers. (Typically much faster than we’d be able to do them, too – and with far less margin for error!)

How to Use Artificial Intelligence in Ecommerce

AI can interpret and analyze data, make decisions, then take action on those decisions – a skillset which makes it ideal for applications in ecommerce.

So how can you harness the speed, simplicity and seamlessness of AI to change the way your ecommerce business operates?

Let’s take a look.

Pricing Optimization

When it comes to running an ecommerce business, pricing your products can be one of the toughest tasks you’ll face – especially if you’re new to the game, and don’t have an established market or product.

Fortunately, AI can help.

AI algorithms analyze several factors – including your competitors’ prices, your inventory levels, and current demand – to price your products dynamically. AI dynamic pricing means adjusting prices, in real time, according to the current market factors. If demand is low and stock is high, prices might go down; if it’s the opposite, they’re going up – along with your profits.

On top of dynamic pricing, AI can also help optimize your pricing. This involves analyzing historical sales data: chewing over patterns and trends, and spitting out the optimal price for your product. With these AI-enabled figures, you’ll be able to figure out the price point that generates the most sales – without losing any customers through overpricing your products.

Skyscanner dynamic pricing
Ever wondered why that cheap flight you saw a week ago is never quite as affordable as it was last time you looked? Yep… that’s dynamic pricing at work!

Personalized Product Recommendations

Providing a personalized shopping experience is more important than ever, with 71% of consumers feeling frustrated when that experience is impersonal.

Introducing AI, then, feels like a paradox. Making the shopping experience more personal – by outsourcing the work behind it to a robot? Well, hear us out.

Personalizing a buying experience requires a lot of legwork – and AI analytics can be used to do just that. Its algorithms can crunch huge amounts of data – including user behavior on your site, plus their purchase history and product preferences – to understand exactly what your customers are interested in.

You can then use this data to offer up product recommendations that’ll be right up their alley.

Better still, AI can lean on something called natural language processing (NLP) – the field of AI that allows computers to understand and generate human language. With NLP, AI can interpret your customers’ feedback, reviews, and comments on your site to get an even deeper understanding of their preferences and interests. Not bad, eh?

Customer Service and Virtual Assistants

When your customer has a query – be it about a product they’ve bought, or one they’re considering buying – they want answers. (And fast!)

52% of customers, in fact, prefer companies that offer live chat assistance.

And if it’s 24/7? Even better.

But of course, paying someone to provide around-the-clock online customer service isn’t always feasible – especially if you’re a small business. When would you eat? When would you sleep? When would you go to the restroom?

Well, AI does none of those things – which is why virtual assistants (such as Amazon Alexa or Apple Siri) and chatbots have become so popular. Chatbots use NLP to replicate the service experience your customer would have through a live chat tool – only it’s all automated.

A chatbot can interpret the customer’s request, understand their problem, and provide a response – whether that’s directing them to a support article, asking for further information, or offering a solution then and there.

AI in ecommerce? It’s time to start the conversation!

Decathlon AI chatbot conversation
AI-driven chatbots use natural language processing to interpret a customer’s request, then provide them with product recommendations and further suggestions. (From Hootsuite.)
Interested in using an AI customer service system? Check out our article on the 6 Key Ways AI is Benefiting Customer Service for a more in-depth guide to this.

Smarter Logistics

Artificial intelligence in ecommerce doesn’t only benefit your product, pricing, and customer care. It can also boost the logistics of your ecommerce business’s operations: that is, how you order, store, and ship your inventory to your customers.

AI in logistics can help your ecommerce business:

  • Optimize shipping routes: taking into account factors like distance, weather, traffic, and delivery deadlines, AI can help you slash delivery times – and transportation costs.
  • Forecast more effectively: by analyzing market trends and sales data, AI can predict future demand for stock: helping you place better orders, reduce the ill effects of stockouts, and improve the efficiency of your supply chain.
  • Manage your space: by getting to grips with your ecommerce warehouse data – for example, your inventory levels and order fulfillment rates – AI can streamline your warehouse operations. Reducing costs, speeding up fulfillment, minimizing “dead” storage space – and boosting your bottom line!

Remarketing

These days, winning customers isn’t simply about marketing. It’s about remarketing – selling to customers again, again, and again. It’s about using a set of strategies to engage people who may have interacted with (but not necessarily bought from) your brand, and lure them back into your business’s ecosystem.

And yes, you guessed it – AI can help.

Some of AI’s remarketing strengths – personalized product recommendations, dynamic pricing, chatbots – we’ve already discussed. But there’s a couple more we’d like to bring to the table.

The first? Predictive modeling.

Here, AI crunches customer data to predict which of your customers is most likely to make a purchase – and, most importantly, when.

The second? Retargeting. AI marketing tools can help you identify customers who’ve abandoned their cart in a previous session with your site – allowing you to re-engage them with an ad, an email, or a deal or discount tailored uniquely to them.

Airtasker remarketing email with image, text, and CTA
This author briefly browsed Airtasker the other day, looking for quotes for a “man with a van” for an upcoming house move. Mere minutes later, this was in my email inbox – an excellent example of AI-powered remarketing at work!

Find Out More

Looking for practical tips for using AI in your business? Our list of 25 Best AI Prompts Examples will help!

Benefits of Using AI in Ecommerce

We’ve seen some strategies and examples of AI in ecommerce. But is it right for your ecommerce business? Let’s whizz through the benefits of AI in ecommerce to find out:

  • A personalized approach: AI can analyze your customers’ behavior, preferences, and purchase history to recommend the products most relevant to their needs.
  • A high-quality customer experience: with chatbots answering queries and providing 24/7 support, AI can really improve your customer’s experience.
  • A more secure way to sell online: AI can identify fraudulent transactions, and stop them from happening: safeguarding your customer’s data, and protecting you from the financial and reputational risk of chargebacks and customer disputes.
  • A more effective marketing thrust: AI can optimize your marketing campaigns: figuring out the best channels, timing, and messaging for engaging your customers.
  • A hands-off style: with AI doing all the stuff you don’t want – or don’t have time – to do, you’ll be able to focus on what matters… growing your business!
  • A boost in Google’s rankings: AI in SEO offers many ways to help your rankings. For example, by using AI keyword research tools to optimize the content on your site, you can give your ecommerce SEO a leg-up – and rise to the summit of the search-engine results pages.

AI in Ecommerce: Top Tips

So – now you know what AI can do and why you need it, let’s explore our top five tips as to how you can go about introducing it to your ecommerce business.

  • Define your AI goals: first up, you’ll need to understand which areas of your ecommerce business stand to benefit most from AI. Operations? Marketing? Customer service? This will help you understand where to start in your AI journey, and which arms of your ecommerce business to prioritize.
  • Choose the right AI solution: with your goals and pain points identified, do your research and pick the AI tool that works best for you.
  • Start small, and work up: going in guns blazing with a blanket AI rollout isn’t a good idea. You need to start small – testing, tweaking, and tuning up your AI solution in a controlled environment – before gradually scaling it up. This way, you can get a handle on any issues early on, and know about them… before your customers do!
  • Ensure your AI tool plays well with others: as the “new kid on the block,” your AI tool needs to integrate with the systems – such as your CRM, your marketing tools, and your inventory management software – already underpinning your ecommerce business’s success.
  • Always iterate and optimize: as we’ve touched on already, AI is a constant process – not one you can simply “set and forget.” You need to continually feed it data to get the most out of it, and be monitoring it ongoing to ensure it’s performing at its peak.

AI in Ecommerce: Summary

AI is still a topic that divides opinion. Some love it; some hate it. For some, it represents a utopian new future; for others, it’s a thing to be feared and loathed in equal measure.

But for ecommerce business owners, AI should represent one thing above all else – excitement. After all, the possibilities of AI in ecommerce are already thrilling – from chatbots and remarketing to smarter logistics and pricing optimization – and evolving every day.

The future of ecommerce is here, and it’s two letters.

All you have to do? Embrace them!

FAQs

You can! And, as it turns out, that trend isn’t just the future – it’s the present. Many website builders, such as Wix, harness AI to ask questions about your needs, then construct the foundations of a website based on little more than your responses alone. (It’s called Wix ADI… and we think it’s fantastic!) There’s also AI graphic design tools if you want to add visual elements to your site design.

To learn more about the relationship between web design and AI, explore our article on why AI is the future of web design.

You can – and if the publicity surrounding ChatGPT is anything to go by, many businesses are – especially seeing as popular web builders like Wix are introducing AI text generators. But we wouldn’t necessarily recommend relying on AI for your website copy. After all, there’s still no substitute for the personality and panache a good human writer can achieve.

However, we know hiring a human writer isn’t always affordable for businesses on a tight budget. In this case, you can use AI blog writer tools to help out. Or, you can use AI keyword research tools to identify which core terms your audience of existing and prospective customers are searching for around your brand and industry.

Written by:
I’ve written for brands and businesses all over the world – empowering everyone from solopreneurs and micro-businesses to enterprises to some of the ecommerce industry’s best-known brands: including Yahoo!, Ecwid, and Entrepreneur. My commitment for the future is to empower my audience to make better, more effective decisions: whether that’s helping you pick the right platform to build your website with, the best hosting provider for your needs, or offering recommendations as to what – and how – to sell.

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