Use Cases of Artificial Technology In the Ecommerce Industry

E-commerce is companies that buy and sell products over the internet. People consider it a disruptive technology because, within a few decades, it has found a place in most prominent industries. Furthermore, one can purchase almost anything through e-commerce, which is why the e-commerce market is highly competitive.

Experts project the e-commerce industry to reach roughly $5.55 trillion in 2022, and the figures will multiply in the next few years. E-commerce accounts for at least 22.3% of total retail sales worldwide. The global pandemic has been a great booster for the industry as people were over their smartphones during that time. Also, the drop in internet prices in most countries has been a reason for its rise.

In such a booming industry, technological advancements are a necessity. Thus, AI or Artificial Intelligence has to play a significant role in developing the e-commerce ecosystem. So, let's learn how AI is and continue shaping the global e-commerce industry.

What Is Artificial Intelligence?

A branch of computer science deals with building intelligent machines capable of performing tasks that usually require human interference. Machine learning and Deep learning are the two main sub-branches of AI, and these fields are revolutionizing all other sectors. AI is creeping its way into various sectors easing the tedious and time-consuming work in various departments.

‘Can machines think?’ is not a question anymore. The answer is yes, and we are living in that era.

Use Cases Of AI In The E-commerce Industry

E-commerce is a booming industry, and AI plays a big part in developing the ecosystem.

Let's check out some of the AI use cases in e-commerce.

1. Effective Searching

Every e-commerce company has an array of products in its listing. A new customer to the website may get baffled about where to look for the product they want to buy.

Here, the search box comes in handy. Modern e-commerce websites use Natural Language Processing (NLP) technique.

It helps suggest what the customer may be looking for and correct something if they misspell it. Even if there isn't a perfect match for the search term, the search results deliver results that closely match the keywords. It is one of the best examples of an AI use case.

2. Re-ranking

It is a widespread use case of AI in e-commerce websites. Re-ranking means ranking the products on the website again and showing those products first, which may lead to a conversion. The algorithm tracks the customer's browsing behaviour to show the best possible result on the product page.

It also tracks which product sells higher for a particular keyword and automatically places the product at a higher position when a potential buyer searches for the keyword.

3. Hyper-personalization

It is a way in which e-commerce websites show a specially curated list of products for the customer rather than showing them a list of products they probably won't like. For example, streaming services like Netflix and Amazon Prime use this feature by showing the 'You May Also Like’ section.

The algorithm tracks the clicks, search terms, and things added to the cart to understand the customer's choices.

4. Merchandising

Gone are the days when the people working in the backend of an e-commerce company had to add synonyms and other words that would redirect the person to the product. In today's time, e-commerce websites are using an AI-driven modern merchandising solution.

5. Pricing Strategies

Image source: prisync.(com)

You know that AI can help personalize the products that may attract specific customers. However, AI can also change prices and show a person A some price and another person B some other price. It changes the prices according to the demand and elasticity of the products. Robust AI algorithms will come to know what price you want faster than you think about it.

Due to the data pool, AI can alter the prices, see at what price point sales start to happen, and fix the price accordingly. However, by tracking your browsing behavior and the prices of the products kept in your cart, the AI may start showing you related products in the same price range. It is known as personalized pricing.

6. Insights

If you are the owner of an e-commerce platform, AI will help you immensely in keeping track of the demand and supply happening in your business. In today's time, you need to maintain fewer excel sheets because the AI in the system tracks a vast amount of information collected from the customers that visit, check, and buy items from the website. It is a great boon for the website owner because it gives them the liberty to formulate a better business plan. It is a lot like how Google Analytics works for all the websites on the internet.

7. Product Recommendations

One of the best use cases of AI in e-commerce is recommending products to customers. The AI tracks how a person surfs the website and realizes the products the customer may be interested in. For example, if you wish to buy a toothbrush from an e-commerce store, you would also look for good-quality toothpaste. So the AI would show you the top-rated toothpaste you might think of buying. The method makes a customer buy more, thus helping the company make more profits. Amazon is a prime example of recommending excellent products.

8. Advertisements

AI comes to your rescue if you have an e-commerce store and wish to run ads on it. For example, a customer searches for a toothbrush online and visits a few online stores. The next time he visits a website, the ad for your website comes on their screen. It is a great marketing tool for most companies around the world. Google Ads is a dominant force in the field of online advertisements.

Final Thoughts

As the internet continues to grow and people increasingly become aware of the e-commerce world, AI and e-commerce will continue thriving. In the modern world, both these technologies go hand in hand. If you want to learn the real-life applications of AI, you should check out this guide on AI top-rated documentaries.

The smooth experience you have in e-commerce stores like Amazon is because of the excellent usage of AI algorithms. AI use cases in e-commerce will also thrive as technological advances occur.