The first quarter of the 21st century has very much been the age of AI — or at least the age of its rise to prominence. Whatever technology or business sector you look into today, AI is likely doing some work there.
From self-checkout cash registers to chatbots, artificial intelligence has permeated the modern world, and its appeal is hard to resist. Research by Tractica suggests that AI revenue on the global market is expected to reach close to $37 billion by 2025.
Giants such as Microsoft and Google have been heavily investing in artificial intelligence for years — Google’s purchase of DeepMind for more than $500 million back in 2014 comes to mind. With acquisitions such as this, it is plain to see the potential of this rising technology.
Other Silicon Valley giants, such as Yahoo, IBM, and Facebook, have since also expressed a clear focus on developing AI, so we can expect our world to become increasingly affected by artificial intelligence in the coming years. This is a great opportunity to get more superior website performance.
Using Artificial Intelligence in E-Commerce
E-commerce businesses have also entered the race, with more and more of them using AI to provide an enhanced customer experience, generate new leads, and get a better understanding of their prospects and customers.
But how exactly can AI be used in e-commerce, and where could this technology lead the online shopping sphere in the future? Best website development agencies use AI to build, design, and maintain custom websites. That’s what we’re here to find out how.
Below, you’ll find our take on the three most potent ways in which e-commerce businesses can apply AI to their development and use it to dominate the industry in 2022 and beyond.
Chatbots are AI-powered communication software tools that interact with customers and respond to their questions via a chat box embedded on a website.
Most e-commerce stores worth their salt have chat boxes where you can quickly get in touch with a customer support agent. Since their invention, these boxes have relied on human representatives to communicate with customers, but chatbots have begun to take over a big chunk of this responsibility.
Over the last few years, many apps have emerged, allowing companies to supplement or even wholly replace customer support representatives with AI chatbots. The technology has experienced a rapid adoption for a few key reasons:
- Chatbots enable companies to operate on multiple platforms rather than their website alone. For example, the same chatbot tool can be used on various social media platforms, extending its reach to prospects who have not yet visited the website itself.
- They can offer round-the-clock customer support through the on-page chatbox. There’s no need for your sales reps to pull red-eye shifts any longer.
- Bots can deliver more accurate details about your products more quickly than any human could.
- E-commerce stores can proactively contact browsing prospects rather than wait for questions.
- Companies can cut costs by eliminating complex cross-platform apps and reducing the number of human hours needed.
- Chatbots are always awake in all time zones and can speak different languages, strengthening your connection with international customers.
- Data collected by chatbot apps can give e-commerce businesses deeper insight into the behavior of their customers and prospects.
All of this is not to say that chatbots can completely replace human beings in B2C interaction — at least not yet — but they do have their place in the e-commerce space.
They have already proven themselves as handy support tools for sales and support representatives, and customers certainly don’t mind getting quick responses, even if they are a bit robotic.
Dynamic Product Pricing
Changing your pricing based on demand is a great way to optimize your profits. Many online stores use dynamic pricing strategies for this exact reason, increasing their overall revenue and ensuring consistent sales even when the market for their products is not exactly “booming.”
This is hardly a new concept. Price adjustment based on supply and demand has been around since the beginning of commerce. In fact, it has been the foundation supporting some of the biggest trade empires in history.
What is new is the fact that this entire process can now be offloaded on artificial intelligence software. Regardless of the industry, businesses used to rely on pricing experts to update the costs of their goods and services dynamically. Artificial intelligence has made huge differences in this practice.
Now, e-commerce stores, airline companies, and others can let their AI bots entirely run the dynamic pricing process or have the software help their human experts make more optimal price changes.
If you simply let the prices of your products remain the same at all times, you could be leaving a lot of money on the table. According to research, price optimization software can improve gross margins by as much as 10%.
This doesn’t mean you should be sneaky about the price increase or blatantly charge some customers more than others.
No matter how subtle you think you’re being, these things tend to come out to the surface one way or the other, which could ruin your reputation, not to mention making a permanent dent in the relationship you have with your loyal customers. When it comes to pricing strategies, it is best to be transparent.
Content and UI Personalization
Imagine showing different homepages to different users based on their behavior.
You could present one homepage to a loyal 32-year-old male customer who mainly shops for tech gadgets using his desktop and an entirely different one to a 23-year-old female prospect browsing fashion accessories from her smartphone.
With AI, all of this is possible. You could offer a completely personalized user interface and content to each of your customers, depending on their interests, past behavior, preferred device, and other factors.
If you think this is just a gimmick, you clearly haven’t thought about the possibilities hard enough. There are so many marketing benefits to serving up what is essentially a different website to your users. Here are three that come to mind:
- Increasing conversions by showing content and products that appeal to a specific customer. For instance, the loyal customer from our example above won’t be happy to see the e-mail subscribe form for the umpteenth time.
- Sending out notifications based on recent purchases, abandoned carts, and other actions on and off the site.
- Using VIP loyalty points, coupons, and other rewards to keep customers coming back.
Some people like to see as many options as possible, taking their time to browse the store, while others want a clean interface that enables them to get to the exact item they’re looking for and move on with their day.
An example of a personalized interface and “product” suggestions that we’ve likely all seen is Netflix.
If you share your account with another member of the household, you’ll quickly find that your homepage looks nothing like that of your husband, daughter, or mother-in-law.
According to Netflix, this approach brings results. The streaming giant says that 80% of the content watched on the platform comes from these personalized recommendations.
Similar product recommendation engines are also common in e-commerce.
These tools recommend products to customers based on their interests. This not only helps customers discover new products, but it can also improve business for the stores in the following ways:
- Reducing shopping cart abandonment
- Boosting overall revenue
- Improving conversion rates
- Increasing the average order value
You can display recommended products in various locations around the website, send them via e-mail, or include them in retargeting ads all over the internet.
Wrapping Up — Is Artificial Intelligence the Right Direction for Your E-Commerce Store?
From personalized interfaces to product recommendations, artificial intelligence can improve the lives of e-commerce brands in various ways. AI and automated tools can not only help you boost profits but improve the way you communicate with your customers and build brand loyalty.
Artificial intelligence software can be challenging to implement if you’re inexperienced. Still, with a bit of help, you could integrate the types of tools outlined in this article quickly and efficiently. Just make sure to keep track of the results and improve your AI stack as you go along.
- 3 Best Board Portal Software Solutions for a Big Business
- Useful Tips That Every Business Owner Will Want To Know About
- 6 Tips To Improve Your Business
- 4 Tactics That Can Help You To Grow Your Business
- 5 Main Benefits Of Remote IT Support For A Small Business
- How Can A Cost Reduction Benefit Your Business?