AI in eCommerce: Things You Must Know About

The slow growth of eCommerce has been boosted during the pandemic, hasn’t it? The eCommerce opportunity for merchants increased by 43% at that time. 

Moreover, the usage of AI has expanded after the pandemic as well. But the fact is, as eCommerce users increased, the risks and difficulties also boomed.

Nowadays, eCommerce business owners must simultaneously deal with unique customer expectations and high traffic. To tackle all these things, many eCommerce businesses have turned to rely on artificial intelligence devices to help them understand their customers better.Do you know anything about how AI can be used in eCommerce? Here are a few ways that AI could help your business. But first, learn what AI is and what it can do for you.

AI in eCommerce: Benefits and Aspects

AI stands for artificial intelligence. This refers to a computer-operated machine that tries to replicate the human brain more competently. AI has several positive benefits.

One of the key benefits of AI in eCommerce is that it can complete different tasks more quickly and accurately than humans. The automation process of AI allows computers to manage their functions very smoothly. When AI controls something, the chances of mistakes decrease.

eCommerce businessmen now use artificial intelligence to forecast customer purchases based on their past behavior, buying patterns, demographics, etc. Though eCommerce intelligence is used to do more than just recommend products, It is also used to run chatbots, evaluate real customer feedback, and customize the consumer shopping experience.

Additionally, AI can do data mining and natural language processing accurately. So there is no doubt that by using AI, businesses can better meet client needs. This article will try to explain how AI can be used in eCommerce.

Top 5 Ways AI Can Benefit Your eCommerce Business

eCommerce sales touched about $5 billion by the beginning of 2021, and experts predict that number will have increased to over $6 billion by 2024 with the help of AI. It is not surprising because AI generally has a few positive aspects in eCommerce, and nowadays, those aspects are visible.

#1. The Role of AI in Preventing eCommerce Fraud

eCommerce fraud refers to any illegal activity that occurs in an online store. Business owners bear the expense when anything illegal occurs, which lowers profits.

In 2021, online merchants worldwide lost a record $20 billion because of digital theft. So, you will never know if you could be the next victim. Different types of fraud can happen in eCommerce, such as credit card fraud, account takeover fraud, friendly fraud, refund fraud, and triangulation fraud.

An eCommerce business owner should determine his business’s risk factors and find an effective fraud prevention method that can help his business.

And the good news is that those impediments can be found in AIs.Artificial intelligence can identify doubtful activity by evaluating data from millions of online transactions worldwide.

For example, a customer may have placed an unusually high number of orders quickly, provided an incorrect address, or skipped other mandatory fields. The human eye simply can’t detect and judge such issues in a minute.

But AI can find fishy transactions and protect businesses from fraud attempts. This cuts down on losses and makes it easier to get credit.

How Does Artificial Intelligence Detect Fraud?

Modern technologies like AI and ML make eCommerce businesses more profitable in the short term. Similarly, they can solve the problem, like a frustrated entrepreneur in an eCommerce store. Artificial intelligence (AI) can analyze millions of internet transactions in a single minute.

Now you can ask how AI and ML detect them.

The key point here is that fraudulent transactions differ greatly from authorized ones. ML systems can recognize these trends. When an AI tool recognizes someone as fraudulent, the organization checks their COD record, RTO percentage, and manual reviews. If there is nothing available, the consumer can be a victim of fraud.

Moreover, every customer’s regular habits are monitored by AI algorithms. This algorithm can immediately evaluate massive transactions and the processing of new datasets. Therefore, they can identify unusual or potentially harmful behavior quickly.

#2. AI helps businesses personalize the customer experience.

Artificial intelligence’s primary role in eCommerce is to simplify customization. Artificial intelligence (AI) and machine learning (ML) extract product interest from individual users of an online service.

For instance, an artificial intelligence (AI)-powered tool can be used in mobile apps, automated email campaigns, or chatbots. In these processes, they do data mining and gather information from different types of customers. which ultimately helps businesses personalize their products according to their customer’s tastes.

#3. AI Assists in eCommerce Pricing Strategy

It takes time to find a price that works for both the buyer and the seller. Each product’s price is based on several factors, such as production costs, customer capabilities, and competitive offers. AI and ML can help you think about this problem in a completely new way.

Modern data analysis tools can gather information from multiple sources to calculate prices. AI tools are set based on location, preferences, and customer choice. In addition, the algorithm performs customer segmentation and real-time optimization, which lets merchants apply customized pricing strategies.

#4. AI-Based Inventory Management

The key to effective inventory management is figuring out how much stock we should have to meet market demand without ordering excess products.

In addition to managing stock levels, AI also facilitates warehouse management with the help of robotic automation. Artificially intelligent robots have many advantages over human workers, such as the ability to store and get inventory any time of day or night and immediately ship orders for online purchases.

Where traditional inventory management only keeps track of the current stock level, AI-enabled inventory management keeps stock based on typical yearly sales patterns, upcoming trends of consumer interest, and problems with supplies that could affect stock levels.

#5. Product recommendation by AI

With the help of AI, store owners can customize their product recommendations for each customer and let them search for items using natural language or images.

This level of customization highlights a weakness of traditional stores and shows how AI drives the retail sector toward e-commerce as a revenue growth driver.

AI that has access to customers’ big data, which includes details about their purchases, searches, and online activity, is now influencing their decisions.

Artificial intelligence can also use visual data to suggest similar products to people based on what they have already looked at.

Moreover, with AI, customers can see what other shoppers have viewed or purchased. Each customer’s browsing habits can be customized according to their needs. Furthermore, recommendations based on similarity can be shown to you that you need to be aware of.

Bottom Line

The impact of AI is undeniable in the field of eCommerce. With the help of AI nowadays, eCommerce businesses are just solving numerous problems. If you are just one of them, use an AI-powered tool for your business.