In the fiercely competitive world of e-commerce, every moment matters for businesses. The risk of losing customers permanently grows with each passing second. While there's still a chance to adapt to the ever-changing landscape, the window of opportunity is shrinking faster than a melting ice cream cone on a sunny day. To prevent the loss of current and potential customers, online stores must wholeheartedly embrace emerging trends and integrate AI tools into their strategies. Neglecting to incorporate these powerful tools can pose significant challenges for brands striving to thrive in the market. Stay one step ahead, by unleashing the power of AI tools and triumph in the whimsical world of e-commerce.
In this article, we will explore the top 10 AI tools that eCommerce companies need to adopt to stay ahead of the competition and cater to the evolving demands of their customers. These tools will help optimize various aspects of their online operations and ensure they are well-equipped to thrive in the rapidly changing eCommerce landscape.
Benefits of AI in eCommerce
By the beginning of 2021, e-commerce sales reached nearly $5 billion, and experts predict it will exceed $6 billion per year by 2024.
With over two billion online shoppers already, and the number rapidly growing, ecommerce customers have become savvy and expect a flawless shopping experience. This is where artificial intelligence tools can be valuable for e-commerce businesses of all sizes and types. AI goes beyond being a fancy toy for large companies. It can impact every aspect of an e-commerce business, from managing inventory to enhancing customer service.
10 AI Tools Needed for eCommerce Companies
1. Product Recommendation Engines:
A product recommendation engine uses AI to suggest products based on what customers are viewing. Also known as the reco engine, these tools track user behavior on e-commerce websites and suggest products that the user might be interested in.
For example, if a customer is browsing for shoes on an e-commerce website, the recommendation engine might suggest related products such as socks that complement the shoes and shoe polishing kits to maintain their quality.
A high-quality e-commerce recommendation engine can have a significant impact on the conversion rate.
Types of product recommendations engine:
- Collaborative Filtering Algorithms: Collaborative filtering algorithms analyze user behavior data, compare similar actions, and predict user interests without relying on machine learning, and are utilized by platforms like Amazon, Facebook, and LinkedIn.
- Content-Based Filtering Algorithms: These algorithms utilize user profiles, item descriptions, and keyword analysis to provide personalized recommendations, and incorporate user voting to fine-tune preferences.
- AI-Powered Recommendation Engines: Considered the future of e-commerce, these engines are currently being developed by various companies, continuously learn and update themselves, and are expected to be highly efficient in generating recommendations.
Example: Visenze- Visenze is an AI powered platform that empowers retail merchants with smart recommendations, smart search and smart tagging. Visenze’s use cases range from enhanced visual search, product tagging, smart product recommendations, and merchandising analytics.
2. Virtual Sales Agent in eCommerce:
Virtual Sales Agents are transforming how eCommerce brands connect with customers, offering personalized assistance and boosting sales.
These smart AI shopping bots serve as reliable shopping companions, effortlessly helping customers find the perfect products. They understand customer needs and preferences, providing customized recommendations and answering questions, resulting in a smooth shopping journey from beginning to end. Virtual Sales Agents are transforming how eCommerce brands connect with customers, offering personalized assistance and boosting sales.
These smart AI shopping bots serve as reliable shopping companions, effortlessly helping customers find the perfect products. They understand customer needs and preferences, providing customized recommendations and answering questions, resulting in a smooth shopping journey from beginning to end. Moreover, they also offer exceptional customer support, promptly addressing inquiries and ensuring a seamless shopping experience.
Virtual Sales Agents go beyond their initial role by excelling in up-selling and cross-selling strategies. They identify opportunities to enhance revenue per customer and effectively implement them on a larger scale. By automating the entire purchase process, these agents enable eCommerce brands to provide outstanding customer-centric experiences, leading to increased brand loyalty and improved sales performance.
Example: Haptik- Haptik is an all-in-one GPT-powered platform that provides conversational AI Solutions to help customers find the right information at the right time through a channel of their choice.
3. Visual Search:
Visual search is a straightforward concept: customers can search for products by uploading images. When an image is entered into the search bar, the search engine will find the most suitable products that match the image and offer additional suggestions. These suggestions may include products from the same collection, similar products, or alternative brands.
Gen Z & Millennials love taking quick photos of products they like to find where they can buy them and how much they cost. These young people have grown up with smartphones and prioritize speed above everything else. If online shopping isn't fast enough, it fails to hold their attention, which is a major problem.
Example: Nosto- Nosto commerce is an experience platform that makes it easy to quickly deploy fully personalized, integrated commerce experiences with fine-tuned control of merchandising rules — across product recommendations, content, triggered overlays and popups, category pages, and more.
4. Demand Forecasting:
Demand forecasting in eCommerce involves utilizing past performance data to predict future sales. By analyzing the factors behind successful or poor sales of individual products, businesses can optimize their strategies for future success. It also helps in pricing strategies, inventory management, risk mitigation & better marketing campaigns
To achieve effective demand forecasting, eCommerce brands must monitor relevant metrics and combine them with their subjective insights. The ultimate objectives are improved inventory management and a more robust cash flow.
Example: Peak AI- Peak AI is a cloud AI platform that provides a feature set that allows technical and commercial teams to build, deploy, and manage AI applications at scale across their entire business.
5. Pricing Optimization:
Pricing optimization tools help ecommerce businesses enhance their revenue and profitability. These tools assist retailers refine their pricing strategies by analyzing marketing data and customer behavior by considering factors like demand, competition, and seasonality. With the ability to dynamically adjust prices and offer personalized discounts, ecommerce businesses can stay competitive and achieve higher sales. Pricing optimization tools empower online retailers to make data-driven pricing decisions and adapt to market changes effectively.
Example: Price Fx- PriceFx is a pricing optimization platform that enables businesses to unlock their full pricing potential. With cutting-edge technology and advanced analytics, PriceFx enables companies to streamline pricing processes, make data-driven decisions, and achieve optimal revenue outcomes.
6. Customer Segmentation and Personalization:
Segmentation tools allow businesses to categorize their customers into distinct groups based on shared characteristics, behaviors, and preferences. This tool enables targeted marketing and personalized experiences for each segment, resulting in improved customer engagement, satisfaction, and ultimately, higher conversion rates.
By utilizing customer segmentation, e-commerce businesses can gain valuable insights into their customer base. They can identify common attributes such as demographics, purchase history, browsing behavior, and engagement patterns. These insights enable businesses to create segments, or groups, of customers who exhibit similar characteristics or interests.
Once the segments are established, the personalization aspect comes into play. With a customer segmentation and personalization tool, businesses can deliver customized experiences to each segment. This includes personalized product recommendations, tailored marketing messages, and targeted promotions. By understanding the unique needs and preferences of each segment, businesses can provide relevant and timely offers, increasing the likelihood of conversion and repeat purchases.
Example: Amazon Personalize- Amazon Personalize is a fully managed machine learning service that uses your data to generate item recommendations for your users. It can also generate user segments based on the users' affinity for certain items or item metadata.
7. Fraud Detection and Prevention:
Fraud detection and prevention refers to leveraging AI algorithms to detect and prevent fraudulent activities within e-commerce transactions. This technology analyzes vast amounts of data in real-time, identifying patterns and anomalies that indicate potential fraud. By proactively detecting and blocking fraudulent transactions, businesses can protect their revenue, reduce chargebacks & fraudulent transactions, maintain customer trust, and minimize financial losses.
Example: Shield- Shield is a mobile-first fraud detection with real-time actionable risk intelligence. Their proprietary AI and ML engine is capable of detecting thousands of device, network, and behavioral data points to return the most comprehensive picture of risk on your ecosystem.
8. Sentiment Analysis:
Utilizing AI-driven sentiment analysis tools to gauge and understand customer sentiments and opinions expressed in online reviews, social media posts, and other forms of customer feedback. By analyzing language and emotion, sentiment analysis helps businesses gain valuable insights into customer satisfaction, brand perception, and overall sentiment trends, enabling them to make data-driven decisions and improve their products and services.
Example: LocoBuzz- A comprehensive customer experience management platform, which allows you to get real-time understanding of your customers, competitors, campaigns and influencers through the power of modern social listening.
9. Augmented Reality (AR) Shopping:
AI-powered AR tools are revolutionizing the e-commerce landscape, bringing a touch of magic and innovation to the shopping experience. With these cutting-edge tools, you can step into a world where virtual try-ons, interactive product tours, and immersive virtual showrooms are at your fingertips. Visualize how furniture will look in your living room or try on clothes without having to step into a fitting room. These tools leverage the power of AI and augmented reality to make shopping more engaging, personalized, and delightful.
Example: AR Shopping on Google- Google's new AR shopping feature makes it much easier to find your foundation match. Developed with guidance from beauty brands, this new photo library features 148 models representing a diverse spectrum of skin tones, ages, genders, face shapes, ethnicities and skin types. Backed by Google’s technology, this library is a big step toward changing the way people shop for makeup online, helping you better visualize what different products look like on you.
10. Voice Commerce:
Integrating voice-based AI technology to enable customers to make purchases and interact with e-commerce platforms using voice commands. By leveraging natural language processing and voice recognition capabilities, voice commerce provides a convenient and hands-free shopping experience, allowing customers to search for products, place orders, and obtain information through voice interactions with virtual assistants or smart devices.
Example: Voysis- Voysis is a company specialized in voice recognition and natural language understanding technology. Their AI-based solutions allowed users to interact with devices and applications using voice commands, making the experience more intuitive and natural. They have developed advanced deep learning algorithms and neural networks to achieve accurate voice recognition and comprehend complex user queries.
In the fast-paced world of e-commerce, AI tools are a must-have for businesses to stay competitive and meet customer demands. From product recommendation to voice commerce, these AI tools empower e-commerce companies to excel in the digital landscape. To unlock their full potential, accurate data labeling services like TaskMonk are essential. Embrace the power of AI tools and data labeling to revolutionize your e-commerce journey and achieve remarkable growth.