How Machine Learning Is Revolutionizing eCommerce Business
Ecommerce has always been an industry disruptor. Technology has become more sophisticated than ever when we talk about Artificial Intelligence or Machine Learning. Every business is now able to perform plenty of things with advanced systems that were once only possible for humans to achieve. They are helping organizations to function properly and make better decisions than ever before.
The constant evolution in technology has made the field of play extremely interesting to watch. Therefore, advanced technologies such as Machine Learning (ML) and Artificial Intelligence (AI) are changing the scenario of the game.
Artificial Intelligence is not a futuristic technology anymore. Instead, it has taken its place in many industries. Machine learning is a subset of artificial intelligence and a study of algorithms that enables software to think and behave like humans without the need for coding.
Almost every industry today, including e-learning, real estate, shopping is leveraging machine learning to solve real-time problems, moving beyond customer segmentation. The COVID-19 pandemic has propelled this development for many organizations as well.
As per the report by Servion Global Solution, 95% of all customer interactions will be controlled by AI-driven technologies by 2025.
Machine learning is helping every software development company take the customer experience to the next level. The advanced technology helps them generate greater revenue in ways that they never could have achieved before. There are many ways in which the potential of machine learning can be unleashed for eCommerce businesses.
However, here are some facts that enlighten you with the current state of the eCommerce industry and how machine learning is impacting it:
- As per the report, the revenue from retail eCommerce sales worldwide is expected to reach $6.45 trillion by 2022. This means eCommerce will grow at a rate of 20% every year.
- Mobile eCommerce is growing rapidly. Therefore, 70% of total eCommerce traffic will be generated by mobile devices.
- As per the study by Gartner, by 2020, AI will manage more than 80% of all customer interactions and will generate over $120 billion in revenue.
Machine Learning: The Future of eCommerce Business
Before we proceed further, it’s important to understand the difference between Artificial Intelligence and Machine Learning.
- Artificial Intelligence: Machines that are able to perform certain tasks by understanding human behavior and pattern.
- Machine Learning: A subset of artificial intelligence, machine learning is used to improve performance through experience over a period of time.
Well, now we should begin.
Now, let us look at some real-life examples of machine learning that is reshaping customer experience in eCommerce.
In the eCommerce industry, machine learning helps customers to purchase the product as per their behavior. It analyzes their search results and data every time they shop on the website, taking into account personal preferences and purchase history.
Moreover, AI-enabled chatbots interact with customers through virtual avatars. They understand their query and feedback and fine-tune their response for accuracy.
With the AI tools, it helps you recommend products to which customers, when, and what marketing channel has the best chance of conversions.
- Offers personalized product recommendations, guides customers to purchase products they are looking for.
- Notifies them if your product is out of stock and shows similar products.
- Offers 24×7 customer support service.
The increasing popularity of eCommerce in the past few years has accelerated business owners across domains to leverage the power of machine learning for improving customer experience.
Amazon has proved that its Recommendation Engine helps them generate 35% of its sales. However, it takes a lot of computing power to find the right sales patterns and understand shopping behaviors.
As per the report by Salesforce, 58% of users say chatbots have changed customer service expectations.
Chatbots generally work as sales agents who help customers to guide them and answer their questions with utmost accuracy. Chatbots are designed to interact with customers which improve the customer service experience.
It solves customer problems and allows the business to generate leads round-the-clock. This way, businesses can scale up their growth without putting efforts into human resources.
Additionally, machine learning-enabled chatbots can track visitors, understand their patterns, and try to convert visitors into customers.
ML-enabled chatbots can analyze customer’s patterns like their purchase history, location, area, interest, gender, age, and others to give them customized rewards, offers, and promotional discounts. Also, it helps boost online sales through recommendation engines as well.
Online users usually keep their eye on the price. If they have to pay for a product as equal as in-store, they will online store at one go. Also, they will compare your products and their price on other platforms before making a purchase. They will look out for the best deal.
Let’s give you an example. Suppose, if you are planning to buy a product and you are performing steps to order it. However, you are not making a final decision to purchase the product and keeping it in your cart. After some days, you will see the price drops on that product. Well, this is done through ML. The ML tool keeps track of products and keeps changing its prices, determining the best price for all products for users.
The more data you have, the higher chances of being stolen. The eCommerce stores have a vast amount of sensitive data of the users. These data include a user name, contact details, bank and card details, and many more. In such a case, even a small mistake in the data cloud may lead to a significant amount of data loss.
However, with the implementation of machine learning, you can prevent fraud. Machine learning will identify patterns in data, understand normal behavior. If it finds something unusual or wrong in the pattern, then it will notify users.
Machine learning helps eCommerce giants secure their crucial data by simplifying it into small chunks that could be easily managed. The business now finds it easy to manage their data and secure it from online thefts.
Everyone loves when a business offers them a personalized solution. As per the study, around 52% of the customers switch brands if they feel that the company is not making enough effort to personalize their experience.
Machine learning is playing a great role in Amazon’s continued success in the e-commerce business.
AI tools analyze the shopping patterns of customers. Once they analyze their interest and other factors, it will come up with their favorite products and offer that they would be interested in. Eventually, AI makes the customer much involved and engaged in your eCommerce site, and hence their chances of buying the products increases.
Machine learning is here to stay for the eCommerce industry. It has some potential to reshape the eCommerce industry by providing effortless services to customers. It will enable retailers with advanced intelligence that is drawn from real-time data instances.
Many eCommerce businesses are embracing machine learning and delivering much value from it. There are endless possibilities and opportunities for machine learning in eCommerce. So, you can also expect machine learning to become an integral part of effective online retail. Get in touch with the eCommerce development company to integrate machine learning for your business.
About the Author!
Divyesh Gohil is the Technical leader of Estatic Infotech, a leading web and android app development company in India. He is an avid reader and also likes to share his view on different technology and marketing techniques via different blogs and articles.