Benefits of Artificial Intelligence in the eCommerce Industry

The eCommerce industry is growing at an impressive pace.

Back in 2017, eCommerce accounts for nearly $2.3 trillion in sales, and according to Statista, the number should hit a whopping $4.5 trillion by 2021.

Also, about ten percent of the retail sales in the United States come from eCommerce, and even this number is expected to grow by 15 percent every year.

What could be driving the current growth in the eCommerce industry? Well, among other things, artificial intelligence seems to be playing a crucial role.

According to a survey of over 1,000 eCommerce retailers in China, over 80 percent of the merchants have adopted one or more AI tools in their business. That’s not surprising.

Thanks to the recent rapid development and deployment of machine learning, computer vision, and reinforcement learning, we now have new eCommerce solutions. This is especially true when considering the improved marketing standards.

AI integration now helps retailers identify patterns and datasets to create a personalized experience for buyers. This unique approach to marketing is more effective than any we’ve ever had.

Also, online stores can now offer high-tech experiences such as chatbots and voice assistant. But there’s more.

5 Benefits of AI in the eCommerce Industry

From NLP technologies in product search to machine learning algorithms for dynamic pricing, here are five benefits of AI in the eCommerce industry.

1. Product Searching

Product searching may be the most important feature on any eCommerce platform.

It allows customers to find products that match their interests through keywords. As you may have guessed, AI plays an important role here.

Product search uses a combination of Natural Language Processing (NLP) and computer vision to enhance search by keywords and images. The ranking algorithm on eCommerce platforms also uses reinforcement learning technologies to deliver better search results.

2. Personalized Product Recommendation

Aside from providing the best outcome during a product search, the eCommerce industry also depends on machine learning and NLP techniques to engage customers.

The AI models can analyze a specific customer’s browsing history and shopping trends, then make product recommendations that’ll fit their needs.

3. Dynamic Pricing

Many eCommerce platforms, such as Amazon, use dynamic pricing tools for product sales.

Powered by big data and machine learning algorithms, dynamic pricing adjusts product prices in real-time based on certain factors. These include the inventory, as well as supply and demand projections.

Also, the model can help predict future prices too.

4. Fraud Risk Management

Retailers in the industry are already using machine learning technologies to identify potential fraudulent credit card transactions. Not only does it prevent and control risks in real-time, but it also ensures secure online payments.

5. Warehouse Automation

Artificial Intelligence use in eCommerce has extended beyond websites into the warehouse. Instead of the traditional forklifts and stock managers, the modern warehouse is populated with AI-powered robots that work round the clock.

They do everything – whether it’s boxing purchased goods or preparing the product for shipment.

Although AI doesn’t currently drive delivery trucks, it’s only a matter of time.