E-commerce retailers are reaching the peak of the hype curve with the adoption of artificial intelligence (AI) technologies. The vast majority of e-commerce businesses agree AI will continue to transform the e-commerce industry and redefine financial and operational benchmarks for success.
Today, the world is changing fast and it’s no longer about just pursuing AI—it’s to adopt AI at scale to reach new levels of personalization, precision, and growth. It’s widely anticipated that AI is set to go into turbo drive in the next couple of years with giants such as Amazon, Google, Facebook, Microsoft, and Yahoo already investing heavily in new AI initiatives. In fact, Business Insider suggests that almost 85% of customer interactions will be managed by bots by as soon as 2021.
How AI can help e-commerce businesses?
The use of AI is transforming the E-commerce industry by enabling three important factors:
- Personalization: Personalization is one of the most important paths to value creation in retail. For maximum gain, e-retailers can use AI to identify their highest-value customers and target them by studying their behavior.
- Accuracy: AI allows e-retailers to optimize business processes and operate with better precision from the customer to the bottom of the supply chain.
- Growth: AI can affect the top and bottom lines of e-commerce business — businesses embracing machine learning, data analytics, and AI typically have more growth.
Major E-commerce AI Use Case:
- Chatbots and other virtual assistants.
- Enhanced User Experience.
- Personalized ads and product recommendations.
- Smart supply chain and inventory management.
I will cover these in detail in a later article.
Many e-commerce businesses are already benefiting from AI by better understanding their customers, generate new leads, and provide superior customer experience. For instance, 35% of Amazon’s overall revenues are generated by AI-based upselling and cross-selling product recommendation system. When e-commerce business adopts AI across retail functions and processes at scale, it can unlock superior value and transform with certainty. There are four main areas e-retailers should focus to unleash AI across the business to rapidly achieve value at scale.
- People: E-retailers need to lead from the top with a human-centric approach and an overarching strategy. It requires appropriate sponsorship, funding, and commitment of resources to transform into a data-driven organization.
- Data: With multi interaction and touchpoints businesses today have an enormous amount of data. A good data strategy with—clean, secure, and actionable data—is the fuel to drive AI at scale.
- Platform: A platform-based approach allows e-retailers to achieve superior speed and scale and enables innovation. Collaborations and partnerships are essential for e-commerce platforms, AI systems, and teams.
- Governance: E-retailers need business processes to move from AI experiments to scale. Effective governance ensures guidelines that help e-retailers to establish the highest value use cases for AI, to help prioritize, fund, and scale.
E-commerce businesses can move from AI experimentation to rapidly drive value at scale by focusing on these four critical areas. New benchmarks for operational and financial success will emerge from superior capabilities for prediction and precision. Organizational culture will evolve to become more data-driven.
AI makes it possible to analyze millions of interactions every day and ultimately target personalized offers down to a single customer. The e-commerce businesses that move to AI at scale with speed will outperform the competition by strengthening customer relationships and creating new paths to growth. Will you be one of them?