skip to Main Content
Artificial intelligence is evolving commerce experiences

What is AI and How Can It Be Used in eCommerce?

BLOG

AI – artificial intelligence – is the catch-all term used to describe machines that can think for themselves with a certain degree of intelligence – reacting, in some cases, like humans. These systems exhibit behaviour including planning, learning, reasoning, problem solving, knowledge representation, and perception.

Any computer program can be deemed AI if it does something that we would normally think of as intelligence in humans. However, many technological applications labelled as AI are in fact just examples of clever software.

What is AI?

A lack of understanding is partly to blame for the slow uptake of AI technology – it’s become a catch-all phrase often mocked as a gimmick or marketing term. Yet it is increasingly being used to create effective and legitimate business tools, and it’s worth having clarity on the complex terminology:

Narrow AI – Focused on a narrow task such as processing natural language or personalising advertisements for customers. These smart systems address specific needs. This is also called weak, vertical or applied AI.

Machine Learning – This is a subset of narrow AI. It enables programs to learn by training, instead of being programmed with rules. It is powered by algorithms and is driving a lot of the developments, including natural language processing, data mining and image recognition. Quite often AI and machine learning are used interchangeably.

General AI – This term is used for AI that has the cognitive abilities and comprehensive knowledge that makes it indistinguishable from humans. We’ve not reached this stage yet. When it happens, this AI will have superior speed and ability to process data than humans.

Neural networks or Deep Learning – These systems are inspired by the workings of the human brain. We learn through a network of nerves and thought pathways. Computers are now doing the same through artificial neural networks. These networks are ‘trained’ to accurately classify data. They can now generate realistic movie CGI or help cars drive autonomously, translate text more efficiently or detect fraud in bank accounts.

AI in eCommerce

AI is increasingly shaping the buying and selling experience for both shoppers and sellers. It is adding both intelligence and personalisation to the way we purchase and trade goods and services.

Customer experience will be the most significant beneficiary of developments in AI. Consumer adoption of the technology will be a key driver for its success, with personalisation a catalyst to winning over buyers. By 2020, the average person will have more conversations with AI-powered bots than with their partner, according to Gartner.

“Now corporations can mine data sources efficiently for new sales leads and remarket to existing customers using AI.”

Advertisers’ Use of AI for Digital Ad Tactics

AI in retail marketing infographic LiveArea

% of respondents. Source: Econsultancy

It is likely that in the coming years a hybrid model will evolve that utilises the best of man and machine in the eCommerce environment. Using each other’s strengths, AI can complement human intelligence, such as:

Optimising search – Contextualising, optimising and narrowing search results for online buyers is crucial. AI can utilise natural language processing, visual search, and audio recognition to hone in on what customers really want. AI software can tag, organise, and search all forms of content.

CRM – Customer relationship management and targeting customers – In the past, vast tranches of customer data have been left untouched, with little ability or knowledge in how to make sense of trends, purchasing patterns, and marketing leads. Now corporations can mine these data sources efficiently for new sales leads and remarket to existing customers using AI.

Chatbots – Bots that interact with customers and sales leads are becoming mainstay interactions with shoppers, both online and on mobile devices. AI works 24/7 to provide on-brand experiences using speech and text. They can help people find the right products, make complaints, check whether goods are in stock and assist in payments.

Personalisation – The more a corporation can appeal to individual needs, the more likely a browser will become a buyer. AI can assist in promotions based on previous user activity. Recommendation engines are now powerful tools allowing people to find products more quickly.

Market insights – AI can be used effectively by sales managers, and make a difference to the bottom line. It allows more accurate forecasts of what customers are purchasing and when, and can monitor sales trends and unfulfilled leads. It can pre-empt purchases and deliver sales insight.

Inventory and product management – AI is increasingly being used to manage stock both virtually and in warehouses. In an age of instant gratification, the management of inventory and speedy delivery is paramount. AI is being used to optimise sorting mechanisms, delivery schedules and product cataloguing, as well as supply chain management.

Competitive intelligence – AI is not only being used to generate intelligence about people’s businesses, it is also being used effectively to create insight on competitors. Omnichannel commerce providers can be made aware of what competitors are doing and react in real-time. Monitoring competitors’ product mix and pricing is paramount.

LiveArea

LiveArea is an award-winning global commerce services provider. Our comprehensive portfolio of capabilities combines strategy, design/UX, technology, and digital marketing to bring commerce to life. For more than a decade, emerging businesses, and leading brands have turned to LiveArea to grow and transform their commerce journeys.

Cutting Through the Hype - LiveArea's Artificial Intelligence Whitepaper

Learn more

AI is seen as the ‘defining technology’ of our times. Despite evident benefits in automation and customer experience, businesses have been slow to adopt.​ Download LiveArea’s ‘Artificial Intelligence – Cutting Through the Hype’ whitepaper and demystify AI, exploring how to embrace it as part of a digital transformation strategy.

RELATED ARTICLES