AI is the most impactful technology of our times. Its influence, even when compared to previous technologies, is unparalleled.
IBM, the market leader in the AI industry, reports that 90% of comrades looking to stay ahead of the curve consider AI the first option. So if you want to get ahead of the competition before they eventually catch on, you need to consider the option of AI technology.
As we speak, AI is prevalent in many different fields. Its universality extends above and beyond to even eCommerce: which is the industry I’m going to be discussing in this post.
Ecommerce and artificial intelligence are a match made in heaven. It provides automated inventory tracking, fraud management, personalization, and a whole lot more for those using it. Being a relatively modern concept, AI implementation in eCommerce is not a piece of cake. However, with time, it can give serious dividends back to your business.
Let’s look at the five ways you can use AI to drive up your eCommerce profits.
Intelligent Demand and Stock Levels Prediction
This section right here is the reason why AI implementation in eCommerce is such a big deal. Inventory management is the most essential (and often the toughest) aspect of eCommerce. I say this because when done right, it can make your business succeed and fail if done the wrong way.
AI helps you lessen the headaches of dealing with stock shortages and surplus. In addition, you don’t have to track everything by yourself since the business process automation software (if it has AI capabilities) can help you track your inventory levels and warns you when you’re going above and over the inventory line.
AI helps businesses minimize losses and help you achieve the best inventory balance.
But wait, that’s not all. It also helps you forecast demand and adjust inventory levels for those forecasts.
Using data mining and predictive analysis (skip to section 3), it can predict when the demand for a particular range of product(s) will go up or down. With such forecasts, you can check where you need to add more inventory and reduce it.
Inventory management is a game of Zen. First, you need to maintain balance. Hopefully, with automation solutions, you can manage your inventory levels, check demand, and make better decisions for your business.
Implement Dynamic Pricing Models
Another common eCommerce feature that most stores have implemented is dynamic pricing. It’s one of the most powerful tools to have in your store.
Based on current pricing trends, competitor pricing, and the seasonal value of a product, dynamic pricing utilizes AI to add new products. It allows you to charge customers market competitive prices without having to price all your products every time there is a change in any of the three metrics I’ve written above.
Giants like Amazon have used this pricing method, which changes their pricing every ten minutes. The main benefit to using dynamic pricing in your store is that it allows you to charge competitive prices and keep your profits high without you having to worry about the competitor’s prices or the seasonal variations in pricing.
Utilize Predictive Analysis
One of the best tools for future decision-making comes in the form of predictive analysis. A statistical technique that uses AI and data mining to predict future events, predictive analysis can prove detrimental to your processes when implemented in your eCommerce store. Moreover, it also helps you understand your customers, their preferences, and their interactions with your store.
You see, each customer has a unique purchasing journey, and you cannot expect to map out each journey and make a decision based on it. Predictive analysis helps you bypass that by providing you with a general overview of customer behavior. It helps you set multiple variables through which you can recommend your customer’s products.
Personalized Product Recommendations
AI helps you gauge user preferences to provide personalized product recommendations. A more detailed explanation of how this all works is based on the concept of the historical approach algorithm.
You see it almost everywhere on the internet now, from YouTube recommending you videos based on your watch history and preferences to Pinterest showing you images similar to those you’ve already seen before.
On an eCommerce store, you shouldn’t look beyond amazon to see its application. Even searching for a particular product would power up the algorithm to recommend you products you’ve already purchased.
The major benefit of using this history-based algorithm is its ability to provide an automated, user-friendly experience. In addition, when provided with similar products based on their niche, they are more than likely to purchase products based on the niche.
AI-Powered Data Analytics for Fraud Protection
If you’ve worked on an eCommerce store hard (and smart) enough, chances are, you’re going to gaining sales. The profit metric is high for eCommerce stores, going upwards to a 209% year-to-year growth.
But here’s the thing, companies aren’t secure in the current business landscape. Because of that, there is a need to be proactive and protect yourself against credit cards, affiliate partners, promo abuse, and other forms of fraudulent activity. It’s harmful to your brand and your overall legitimacy.
Above everything else, securing your website’s payment system is the most important. ML and AI tools are highly effective in detecting and taking care of such scams with relative ease. With their user tracking systems, they can check which user is entering information for a scam and a legitimate user. Answering these queries helps you decide better and make supervised decisions on the matter.
Ecommerce owners are always on the lookout for ways to improve the user experience. Of course, that’s what keeps the cash flow coming into a store. But to get ahead of the competition, especially in this digital landscape, you need to have a solid automated technology at your behest.
Fortunately, AI for eCommerce is your prime solution on the matter. With a bit of ingenuity, you can turn your whole eCommerce operation into an automated system that can help you boost conversions and improve sales.