In 2020 eCommerce is forecast to grow to 15.5% of retail sales worldwide (50% share growth from 10% in 2017) with over 2 billion people shopping online.
On the other hand, customers are bombarded by terabits of information daily, reducing their attention span to that of a goldfish. Or less, to be more exact (human: goldfish - 8: 9 seconds).
How do you win in this ever-evolving domain that keeps inventing new systems and gimmicks to keep the customer engaged in their online store?
We have a recipe for creating a successful highly-converting eCommerce business:
- Master all the hi-tech eCommerce solutions available now: chatbots, Artificial Intelligence, Machine Learning.
- Keep an eye on the emerging technologies and adopt early those that yield results upon trial.
Let’s look at some examples of chatbots, AI & ML technologies in eCommerce.
ML, AI, And Chatbots – What’s That About?
Let's quickly go over all definitions, so we are on the same page before we proceed to understand the role of AI and machine learning in eCommerce
What is AI?
Artificial Intelligence (AI) is an ability of machines to analyze & interpret external data so as to arrive at conclusions directed to achieve certain predefined goals. The topic is widely controversial, with Elon Musk suggesting that AI should be controlled by the government in order to prevent a potential threat to human species.
In simpler terms – Artificial intelligence is deployed when computers go beyond providing insights into analytics based on past data, and take a step further by giving suggestions, making future predictions and prescribing certain actions.
What is Machine Learning?
Machine learning is a subset of AI that focuses on machines making predictions and forecasts about the future, without being programmed, but rather by being trained on big data sets and learning through experience.
Unlike AI, machine learning requires no prior programming, so its application is much wider and more exponential in its reach. Artificial intelligence was only able to do primitive pre-programmed tasks before the emergence of ML technology.
What are chatbots?
AI chatbots for eCommerce have stormed into the industry and managed to bring amazing results across a number of major KPIs, like customer service processing times, case resolution success, marketing automation, lead generation, and more.
Chatbots are a software application designed to sustain an online conversation, essentially mimicking interaction with a human agent. Chatbots are widely used in marketing & customer service departments. They can be used in text or text-to-speech environments.
Chatbot technology is based on AI, and utilizes a branch of it known as Natural Language Processing (NLP) involving text-to-speech algorithms.
How do Machine Learning, AI, And Chatbots Change the eCommerce Industry? Key Benefits follow.
Beauty Is Found in The Image: Search Products By Image
Visual search is a cool kid of the AI tech stack. Love the T-Shirt you notice in a café? Fancy the same shoes for your little one, as that toddler on the playground is wearing? Good luck googling “cute blue shoes with helicopter print”!
Well, things are becoming so much simpler due to the extensive use of AI in eCommerce! Just take a snapshot of the item you liked, and let technology come up with the best results via visual search. In all likelihood, you will be served exactly the same offering and deals as those available on the net.
Amazon does it. And that’s just the beginning.
Keep It Personal With AI
Personalization is the trend that is not going anywhere. If anything, we will see brands big and small customizing their content more and more granularly with communications and content that resonates with this specific customer.
Another example of the use of machine learning in eCommerce is Rare Carat. This online jewelry store used IBM Watson technology to create Rocky, a chatbot, that helps a novice diamond buyer wrap their head around multiple characteristics for a personalized purchasing decision.
Clients are guided through the all-important diamond price-forming notions like clarity, polish, color, cut, carat, depth, price, and origin before being presented with the best-fitting options.
Increase Sales by Recommending Items That Resonate
Recommendation engines are probably the most powerful application of Artificial Intelligence to date with Netflix and Amazon’s algorithms responsible for as much as ¾ and ¼ of views and sales respectively.
The technology takes 3 parameters into account in order to suggest products for customer’s review:
- Events (all clicks made by a user are remembered by the system, registering site activity)
- Ratings (each of the events is assigned a weight depending on its proximity to conversion, e.g., purchase is higher than a comment or product page view)
- Filtering (depending on the settings, different engines may use three methods):
- Collaborative (market basket analysis technique)
- User-based (user’s choices & behavior on site are taken into account)
- Hybrid (a mix of the two methods above)
Complex Logistics that Operate Like Clockwork
With millions of SKUs in online shops, hundreds of people involved in logistics, multiple vendors helping to store, pack, deliver products, smooth logistics are a powerful competitive advantage. Buyers often include delivery price and timelines in their purchasing decisions.
Machine learning, powered by big data, is a major player in the success of the modern logistical solutions that keep eCommerce running 24/7 delivering billions of goods from warehouses all over the world.
These are just some examples of machine learning use in eCommerce and related logistics:
- Supply Chain Planning
- Peak Hour Planning
- Warehouse Management
- Demand Prediction based on predictive analysis
- Supplier Relationship Management
- Workforce Planning
- Logistics Route Optimization
- Computer Visions Technology (reads barcodes)
Enhance the Brand Experience
User experience might sound like something ephemeral, but a great customer experience boosts loyalty and helps improve client retention. If you feel taken care of here – you don’t have much incentive to shop around.
Sephora pioneered the realm with its application Sephora Visual Artist, that uses both augmented reality (AR) and AI technologies to allow customers to try makeup on, and combine and suggest different color shades for their face and skin tones.
Review Management that You Can Trust
Astroturfing, the practice of pretending an opinion originates from a grassroots member, while in fact it’s sponsored, may affect customer experience negatively.
Amazon knows how valuable real reviews are nowadays and does everything possible to ensure that real verified customer reviews get well-deserved preference. Reviews that are upvoted as helpful also get more prominence due to machine learning algorithms,
Chatbot-Powered Lead Generation
When talking about the use of chatbots in eCommerce, chatbot lead generation deserves an individual chapter.
It’s so easy to pop a question to a customer who started interacting with your website: What’s that you are looking for?
Armed with this data, chatbots can then send chat blasts to a segmented group of customers. In this manner, they can target them specifically according to their known preferences, drastically increasing open and engagement rates.
Marketing companies charge insane amounts of money to ascertain your client's preferences and expectations. When a product is based on and/or aligned with users’ worldviews, the chances of success are so much higher from the very start. The chatbot technology enables thousands of surveys to be sent out to your clients’ Facebook Messengers in a few clicks.
If enhanced with a touch of creativity, and delivered in the right tone of voice with thorough personalization, such surveys will be taken as fun and elevate brand awareness.
Customer Loyalty: Worth Chatting For
Chat your way to increased customer loyalty. Not a joke. Welcome to the 21st Century.
In fact, services like MobileMonkey enable eCommerce entrepreneurs to create a chatbot loyalty program.
Users can sign up via chatbots, receive promotional messages, and get customized suggestions.
Closing the Deals
Users do have an issue with Chatbots so far.
You are right, it’s a trust issue. Bots may be perceived as less empathic and knowledgeable.
When their non-human identity is disclosed, that may impact sales rates negatively.
If chatbots are undisclosed at the time of communication or prior to it, they are more efficient in closing sales: 4 times more efficient (400% growth!*). This stat is sourced by a study involving 6200 customers.
* If only there was a way to increase conversion by 400% on every step of the funnel!
Gain Insights with Assortment Intelligence
Being out of stock or out of price is always a bummer. You worked so hard to attract the client to your store only to feature zero availability on the product page.
The market is ever-evolving and offering trendy items is a sure-fire way to gain status as a trendsetter, build a loyal clientele, and increase sales.
Monitoring a competitor’s assortment is a breeze now using machine learning technology in eCommerce. Always being in the loop about new arrivals and trends is one of the indispensable ingredients of a successful online store.
AI & Chatbots Examples in eCommerce: How the Big Guys Do It
This lingerie & clothing eCommerce Aerie was more than delighted when they integrated a gamified chatbot into their sales funnel. The chatbot brought double the number of users to the company than all social media combined in a short period.
Users are met with a choice of images: this or that? Offering to confirm which outfit they like better. In a few images, users are then presented with a recommendation based on their preferences.
H&M created a bot that is designed to help both a user and the brand.
This chatbot functions to ascertain the client's preferences in terms of style in order to provide personalized suggestions based on previous choices. But more importantly, it also collects public opinion on different items that customers can upvote and rate.
This is a dream come true for all shoppers and marketers – to have that full of immersion into the client's preferences.
The British classics vendor may be over 100 years old, but when it comes to the contemporary best eCommerce chatbots, it is on the list.
They introduced it during the fashion weeks, so it created a bit of PR buzz. The initial feature was about the show itself: users were invited to get a behind-the-scenes glimpse of the action and the new fashions.
Now the chatbot has a feature to allow pre-ordering items, exploring gifts, and even getting invited to Facebook streaming of live shows.
Feel like chatting with a live agent? Certainly, M’am. This is Burberry, after all.
How Do You Implement AI & Chatbot Technologies In eCommerce?
Savvy marketers understand the benefits of using chatbots for retail and eCommerce. How do you go about implementation of this useful tool in your online shop?
- Preparation & market knowledge is vital and fundamental: see what's going on the market and find out whether your competitors are benefiting from chatbot solutions at this time. Learning from abroad is a great idea – check out best practices and best chatbot examples from Europe, Asia, and Latin America.
- Investigate the technical offering: are there ready-made solutions & chatbot software? What are the highest-ranking ones? Which ones have been on the market for a while? Which ones have great use cases? What’s their pricing policy?
- Send a few RFPs to your short-listed candidates for custom chatbot development for eCommerce. It is not unusual for retail mobile application development companies to provide an attractive rate based on their low season or a need to beef up their portfolio.
- Plan the features you need your chatbot to have.
- Sign the contract and start collaboration.
Solutions for eCommerce: Development
If you feel like your company needs to get going with chatbot development, Zoolatech would love to help you implement this smart business idea.
The use of chatbots in eCommerce is in its early stages, but the evolution will benefit both eCommerce businesses and their customers.
Feel like outsourcing the development of your unique best-in-class chatbot to a team, eager to raise your left brow with the reasonable estimate and your right brow thanks to our boutique-quality execution?