Small and medium-sized ECommerce businesses are looking towards AI and machine learning as a means to make more profits in a less margin business. Gartner predicts, “By 2022, at least 5% of digital commerce orders will be predicted and initiated by AI”. 80% of all customer interactions in ECommerce will be handled by artificial intelligence. The key reason why artificial intelligence and machine learning is more relevant for ECommerce is ECommerce by design is a volume-based business. A volume-based company brings along immense volume and variety of business data. This data can’t be analyzed manually to make smarter business decisions. In the cluttered ECommerce space, the more intelligent business decision will decide the fate of the business in the long run.
Future of SMB ECommerce Using AI
The business decisions that are taken by the critical decision-makers based on their implicit knowledge, experience, and gut feel will not serve the purpose. Early revenue stage ECommerce companies have to do something that others in league aren’t doing yet. Adopting artificial intelligence for making simple decisions in marketing, and operations go a long way in shaping the future for ECommerce companies.
Amazon, Rakuten, Alibaba, and all the other more prominent local and global brands in ECommerce are investing in AI and machine learning.
What the future holds for SMB ECommerce companies using AI today is the continuous business model innovation in times of steep competition. The ECommerce business owners can’t go after the customers of the competition. But they can do a lot to learn more from their customers using machine learning.
Build Conversations at Scale
A real business asset is the one that works without intervention. Conversations are what drive most transactions in ECommerce. AI, with its natural language processing capabilities, is well placed to help you turn your chatbots into conversation chat agents. With AI, your ECommerce company’s chatbot can now handle more sophisticated conversations with customers. The idea is to get started, experiment, and leave perfection for later.
Make Smarter Product Recommendations
Either the business head or the product line head decided which products to recommend to the customers when they search or buy a particular product. Product recommendations can add clutter to the customer experience if not well served. An ECommerce company needs to learn the behavior of their customers in terms of their preferences. Learning customer behavior at scale (even by 100 customers) is possible using machine learning. Instead of making guesses about which products to recommend to customers, you can let AI do that job for higher chances of upselling.
Identify Loyal Buyers from Churning Customers
Building a set of the sticky customer base is one of the most critical jobs for someone who is running an ECommerce business. With higher competition in ECommerce space, the customer loyalties are shifting to those who offer more discounts or better customer experience. Identify your churning customers from your loyal customers helps you build a more predictable business line. Customers leave clues that the machine learning algorithms can learn and tell you in advance whom to engage in priority to retain their business.
Forecast Sales and Demand
Most sales and demand forecasts are target driven, and aspirational due to which they are seldom achieved. Investors, business owners feel more in control when the actual performance meets the estimates, or it exceeds that. Every transaction on ECommerce leaves more data that can be humanely analyzed, even if you have about 50 customers in a week. AI helps you analyze your demand and sales data based on global, local, and seasonal parameters and help you make a precise demand/ sales forecast. With AI based demand forecasting, the ECommerce businesses are expected to be more accurate with their targets and steps to be taken to achieve it.
Predict Discount Levels and Pricing
Today discounts drive loyalty. However, offering discounts round the clock means that the ECommerce is headed for doomsday. Based on the basic profitability metrics, the ECommerce platform can set their upper cap on cut and a lower cap on the net price. Varying the rate between these two lines based customer’s propensity to purchase, willingness to pay can be done at run-time using the application of artificial intelligence.
Identify Fake Reviews
Customers put reviews, mostly when they are super happy or highly annoyed by either the product or the service they purchased online. Customers, as well as competition, puts negative reviews so that they can turn new prospects away from the product or the platform. With the help of machine learning, your ECommerce platform can quickly identify a fake review from authentic ones and mark them for filtering. Application of AI in detecting the counterfeit reviews helps improve the credibility of the ECommerce platform.
AI to do AI in ECommerce
One of the most common arguments in ECommerce is that the SMBs lack the skill set or budgets to hire skill set in AI. The good news is that the AI has evolved to handle itself so that ECommerce SMBs can employ non-data-science professionals to run artificial intelligence projects.
Datoin is a self-service AI to do AI platform for ECommerce SMBs. Assess the value of your data using AI today using Datoin, try now.