Technology is getting advanced at a fast pace. Machine learning, artificial intelligence, augmented reality are some of today’s tech buzzwords. You will just get overwhelming to think of the ways these breakthrough technologies can do. No one would have been thought that one day, computers will make decisions by learning and recognizing the patterns. Today, machine learning is being used in the ecommerce world, to learn the users’ behavior and preferences. It tests and quickly adapts, using the information to refine its ways to reach your target audience.
Let’s talk about the role and the most significant machine learning applications that are accountable to shape the ecommerce sector.
Retail Ecommerce and Machine Learning Statistics
With a huge transformation in the past few years in the ecommerce industry, machine learning seems to be a solid game changer for the whole ecommerce sector. It feels like the ecommerce world is constantly in the phase of reinvention. Just to keep things into perspective, here are a few statistics about the role of machine learning in the retail ecommerce sector.
- As per the research from Statista, the global sales generated by the ecommerce sector were subjected to around $4.88 trillion. It means the ecommerce industry will grow at a rate of 20% each year.
- Mobile ecommerce is booming more rapidly and accounts for around 70% of total ecommerce traffic in 2018.
- A study from Gartner predicts that AI will manage more than 80% of customers’ interactions by the end of 2020.
Machine Learning Applications
The blog will introduce you to five of the most influential machine learning applications in the ecommerce sector. Let’s get started:
Product Recommendation and Promotions
Unfortunately, customers are not always easy to understand, and that is where machine learning comes to help in the form of product recommendation engines (PREs). Seeing the massive customers’ data and the increasing number of users, analyzing and predicting what customers want seems impossible. So, the companies need to search and map the relevant chunk of information to the individual as per their taste and preferences. Thanks to the predictive analysis that has made it possible to determine the key recommendations for the customers. The machine learning algorithms in the PREs take into account the key customer data including their buying history, and preferences, etc. to refine the accurate recommendations for the individual customers.
Apart from product recommendations, machine learning also contributes to serving the ecommerce sector with dynamic pricing features. Today’s smart online shoppers tend to buy a product by comparing it on several online shopping stores and finding the best discount codes. This is the reason, ecommerce stores opt for dynamic pricing options. Machine learning models allow you to adjust the product prices by taking into account several factors such as competitors’ prices, product demand, customer preferences, and other features.
Prevention of Fraud
Another great machine learning application in the ecommerce sector is revealing the scams, to prevent the companies from fraud-related issues. To predict fraud attempts such as transaction drawbacks, fake accounts, and so on, machine learning proves to be highly effective. The approach of machine learning to detect fraud has received huge publicity and attention recently. The algorithms of machine learning can easily detect scams and other fraudulent activities and prevent the company in advance from a huge loss.
Intuitive Search and Display
Another most exciting machine learning application is its ability to deliver an intuitive search experience for the shoppers. Users visit your site with the high intention to buy something. Ensuring your customers find exactly what they want from you is critically important to provide them with a great customer experience and close the sale. This is where machine learning comes to provide you with an enhanced search engine experience. The improvements of machine learning are not just restricted to show you the accurate search results but also the relevant products that you might be interpreted in. This feature opens a wide door for the ecommerce industry to increase their sales.
Improved Customer Support
As an ecommerce business owner, you must be aware of the importance of great customer support. Having continual customer support service ensures to keep your website alive and help to increase your conversion rates beyond your imaginations. In today’s fiercely competitive ecommerce world, companies must need to facilitate their customers and solve their queries on how and when they need it. One way to offer round the clock service is to hire a large team of customer support representatives that is not a viable option even for the largest companies. Chatbots are one of the biggest examples of AI and machine learning in the ecommerce sector. The intelligent bots offer assistance to customers and solve their product related queries efficiently 24*7.
Managing Supply and Demand
Managing your supply chain and management is a must-thing to survive your online store in today’s competitive business market. When you dig deep into the ecommerce, like other business domains, it’s about matching the demands with supply. As an ecommerce business owner, you must ensure having the right stock of products in the correct amount to meet your users’ needs effectively. With the fact that customers’ needs and demands change over time, the more proactive your supply chain management means the better your sales. Being able to forecast the changing customers’ needs is a way to stay ahead of the curve, and this is possible with machine learning.
To thrive in the rapidly booming ecommerce industry, your online store should be as agile as possible. This can be possible only via incorporating an innovative technology such as machine learning in your store. The applications of machine learning in the ecommerce sector are numerous and its benefits are increasing with no signs of coming slow. Investing in machine learning technology is therefore essential. If you still have not any plan to implement this state-of-the-art technology into your ecommerce website, you are already several steps behind your competitors. So, it would be right to say that machine learning is the future of ecommerce.