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Artificial Intelligence (AI) implementations in e-Commerce: facts & use cases

Girish Chandra May 31, 2019

Artificial Intelligence Emerging Technologies Digital Commerce eCommerce AR/VR

What was once mostly experimental has become a mainstay of many e-Commerce organizations—Artificial Intelligence (AI) is playing an important role in revolutionizing and moulding e-Commerce the way we see and experience today. Leaders like Amazon use AI to maintain their competitive advantage in many areas including customer service and overall experience. Amazon also wins here because it does it right – and at scale.

This e-Commerce giant is pushing the limits on the power of data and AI. And why not! After all, AI enables an e-Commerce website to recommend products uniquely suited to shoppers and enables them to search for products using conversational language or images, as though they were interacting with a person. These personalized online experiences powered by AI will be the new normal – expectation present-age online shoppers carry even while they are in search of their favourite products and services in the marketplace.

Recent analyst reports suggest that by 2020 60% of digital commerce organizations will use some form of AI with a focus on improvement in customer satisfaction and experience and reduction of costs and increased revenue. It also says 5% of the orders will be predicted and initiated by some form of AI.

Additionally, emerging technologies like voice-based orders using devices, wearables, internet capable consumer appliances, AR/VR will open up new channels for doing business. Some of the key areas where AI is used in e-Commerce include: offer recommendations and personalizations, inquiries management, customer classification, reviews, analytics, predictions and forecasting. On the other side, it would be heavily used for price management, inventory and logistics management areas.

Technology giants like Microsoft, Amazon, Google etc and many other niche players have come up with cognitive technologies and templatized algorithms that help in image processing. They have started tapping into speech processing, voice recognition, Natural Language Processing (NLP) and data technologies to process massive data and also to predict.

There are some proven powerful ways to use Artificial Intelligence (AI) in e-Commerce. Some visible AI implementations that I have seen include:

  • Chatbots and recommendation engines

AI-based bots gather/analyse/train customer intelligence, create profiles, and also build intelligence about products and services of digital commerce organization. Bots handle questions, recommend products based on real-time interactions and even compare products.

  • Sales analytics

AI can get more in-depth with its analytics. Analysis of massive data sets is possible with AI algorithms. Leading digital commerce companies use these proven methods like deep learning, statistical programming and predictive analytics to capture their customers' behavior. Sales analytics also helps in organizing and managing the inventory, especially with the products that have a higher demand.

  • Voice, speech devices

Voice-activated assistants are becoming common in the home, either in pods such as Amazon’s Echo, Google Home, and the Apple HomePod or on mobile devices with Cortana and Siri. It’s predicted that by 2020 half of our online searches will be conducted through voice commands.

Global online retailers such as The North Face and GWYN (Gifts When You Need) made use of AI to enable customers to find the perfect products by asking questions that were answered by users. Their voices were subsequently analysed alongside additional information. In such scenarios, AI is used to respond to customers’ needs in finding the perfect product or service.

Consumers today can even order a Starbucks coffee through commands to an AI chat interface.

  • Image recognition and visual search engine

The visual Search engine is one of the most exciting parts of Artificial Intelligence in e-Commerce. It is an immersive AI driven technology that enables users to discover what they want with just a click. Visual search reads images to find color, proportions, size, and shapes, in some cases text to identify product names and brands. This offers an advantage over keyword matched search, in which, results are based on searcher’s ability to describe a product. More often than not, this does not go as planned. Image recognition and visual search engine is increasingly being used in fashion retail today with the biggest brands leveraging on this trend.

  • IIoT powered devices

Edge devices will be more intelligent and will make everything smart. These devices will listen, see, and hear many things around them and gather enormous amounts of data. This data will then be used in multiple business cases.

Integrating AI into your retail business can feel like a daunting task. But, the convergence of AI in your e-Commerce strategy will change the very way we buy and sell online. AI implementations in e-Commerce can bring extraordinary efficiency in consumer knowledge, sales, supply chain, customer service and automation. We are fast approaching a time when most of the orders will be predicted and initiated by AI, do you have this in your digital commerce roadmap?

e-Zest is a leading digital innovation partner for enterprises and technology companies that utilizes emerging technologies for creating engaging customers experiences. Being a customer-focused and technology-driven company, it always helps clients in crafting holistic business value for their software development efforts. It offers software development and consulting services for cloud computing, enterprise mobility, big data and analytics, user experience and digital commerce.