AI in Ecommerce: How to Maximize Your Investment in 2021 and Beyond

It’s undeniable.

The success of any ecommerce business is tied to its foundation.

Think about it. Most ecommerce businesses are like beautiful…well-painted houses.

Attractive to the eye…but it can’t stand the storms of change.

AI in Ecommerce is an excellent example of this.

Many ecommerce businesses make AI investments in digital commerce that don’t pay off.

Instead, these AI investments end up being “little trophies” that are admired by the competition — with no real return on investment.

Here’s an uncomfortable truth:

No platform or software can be successful unless it’s integrated into the foundation of your ecommerce business.

Surprising, isn’t it?

AI in ecommerce should be part of your core strategy and not just another add-on to your business. But how can you implement this?

First, let’s explore various trends relating to AI in eCommerce.

AI in Ecommerce— 4 Adoption Trends You Can’t Ignore

Including AI in your strategy requires that you first understand adoption trends.

Why? You want to put your efforts in the right direction.

Trend #1: AI Adoption is Soaring

Forrester predicts unprecedented growth in adoption in 2021.

About 35% of companies expect to “double-down on workplace AI.”

And that’s not all.

25% of companies expect to “stretch AI to new frontiers”

Trend #2: Hype Vs. Reality

According to research by KPMG, 64% of players in the retail industry feel that AI is more hype than reality.

But shouldn’t this be discouraging?

No, it shouldn’t.

This trend provides an opportunity for AI in Ecommerce—if done right.

Including AI in your business strategy can be a source of competitive advantage.

Trend #3: Employee Preparedness

79% of C-suite level leaders are confident in employees’ preparedness for adoption.

However, only 38% of lower-level managers are optimistic.

So, what’s interesting about this?

Lower-level managers are more likely to work with employees daily and better grasp their skill sets.

This shows a disconnect between levels of management on how prepared they are for AI adoption.

Trend #4 Impact on Retail Industry

About 80% of players in the retail industry believe that AI is already helping with customer service issues.

And this trend applies to ecommerce.

So are there benefits to AI in ecommerce?

Let’s find out, shall we?

3 Benefits of AI in Ecommerce

There’s no doubt. AI is beneficial for all businesses.

All businesses stand to benefit from AI in the following ways:

Creates better customer experiences-
Improves decision-making
Helps innovate more products and services
It helps achieve cost savings
Operate more efficiently/increase productivity

However, it’s essential to highlight the specific benefits of AI in ecommerce.

Business intelligence

Ecommerce businesses gather and process a lot of data.

But there’s a catch.

For this data to bring value, it needs to be analyzed.

Then, ecommerce companies can use data for problem-solving and creating solutions that address business challenges.

AI in ecommerce can help with business intelligence.

How?

Ecommerce companies can put collected data in different categories such as behavior, action, and product.

This makes it easier to identify customer reactions to your products, spot customer churn, and establish your strengths and weaknesses as a business.

And that’s not all.

Analytical insights can help with creating the right targeting strategy for your specific audience.

The result?

Better sales conversions and enhanced customer loyalty.

Enrichment of Product Data

Here’s the truth: All data is meaningless unless it is analyzed and put to good use.

AI helps with the enrichment of product data.

But what is data enrichment?

This combines data from internal sources (first-party data) with external sources (third-party data).

Enriched data is a valuable asset as it is more useful and insightful to the business.

Product data enrichment involves adding relevant information to products and catalogs to help customers find relevant products easily.

Enriched product data can help improve search engine traffic.

Moreover, enriched product data is useful for recommender systems.

Rich data sets can boost recommender systems.

Think Amazon.

Data collected helps Amazon come up with a personalized web page.

And that’s not all.

Amazon’s recommendation engine generates plenty of recommendations based on user data and past purchase history.

Therefore, ecommerce companies can successfully use AI to increase conversion rate, increase customer engagement and reduce transaction time.

Search optimization

AI in ecommerce enhances search.

Search solutions that use semantic data help customers find what they’re looking for–faster.

The reality is that customers don’t speak in keywords.

Search optimization can also improve operational efficiency.

When customers find what they’re looking for, they’re unlikely to clog customer support lines with queries.

AI has a place in ecommerce.

So what are some of the applications?

Let’s find out.

AI in Ecommerce—Surprising Applications

There are many use cases for AI in eCommerce.

But here’s the surprising thing.

Conversational AI supports many of these technologies.

So what’s conversational AI?

Conversational AI is the set of technologies behind automated messaging and speech-enabled applications that offer human-like interactions between computers and humans.

Conversational AI can communicate like a human by recognizing speech and text, understanding intent, deciphering different languages, and responding in a way that mimics human conversation.

Some of the technologies supported by conversation AI include:

AI-Powered Chatbots
Voice Assistants
Digital Assistants
Product Configurators

So how can you maximize these investments—while transforming your business?

Let’s explore more.

AI in Ecommerce—How to Maximize Investments in Digital Commerce

1. Build an AI-Ready workforce

Here’s the reality.

No business can succeed without the human factor. This is why commerce businesses need an AI-ready workforce.

Ecommerce businesses can achieve this by taking the following steps:

Clearly define responsibilities for ownership of AI platforms:
Knowing which team members are responsible for various platforms can help incorporate AI platforms when making strategic decisions.

Develop an accountability plan:
Establish the key KPIs associated with AI tools and platforms. Functional teams can then tie these KPIs to expected performance outcomes. It is also essential to determine how you’ll trace back results to the initial need for the investment.

Create a culture of learning:
New AI tools and platforms require training. Creating a learning culture involves an environment that prioritizes equipping teams with the resources to succeed with adoption.

2. Get the Right Data

Once you’ve trained your AI system on cleansed and standardized data, the AI can then begin increasingly extracting and standardizing data on its own, pulling what it needs from both digital and physical sources.

3. Highlight the Impact

AI requires human intervention and insight to be truly effective. Don’t just set it and forget about it.

Understand the costs.
AI costs are much more than the talent and price of the platforms. Additional costs may include gathering, cleansing, and labeling data costs.

But if you accurately assess the costs, you’ll be better able to direct efforts with the most significant ROI.

Pick a suitable operating model.
Choose an AI operating model that ensures a consistent approach across your company.

Take opportunities to integrate AI platforms that work across the business. For example, eCommerce companies may benefit from embedding AI capabilities within business units.

The more aspects of the business it is in — the more impact it can have.