Integrating AI – The power of people plus technology


By Cameron Furmidge, Head of Insights, Luzern eCommerce.

Arguably the most difficult task in retailing is achieving customer loyalty. Making the first sale, with special offers, clever marketing and seductive product promises, is one thing. Gaining the trust of the consumer so they will come back to your offerings above others, is a whole different ball game.

Ecommerce platforms, online marketplaces and brands with an online presence have benefited beyond imagination in the last decades from the advances of technology. But in terms of trusted opinions and recommendations, these are still perceived to be more valuable, honest and useful if they come from people rather than technology. However, with the rise of AI, retailers can now leverage the responses left on ecommerce sites by customers to both enhance the business performance, improve the customer experience, and raise loyalty levels.

Amazon has been a trailblazer in recognising the advantages of AI, employing it and machine learning (ML) to assist sellers in enhancing product selection and user experiences, as well as optimising logistics. ML utilises statistical techniques, including algorithms, to enable AI to learn from data and make predictions or decisions.

Using AI to analyse the wording used by customers in reviews and recommendations means common sentiments and phrases can be quickly identified. What was once a very time intensive task to categorise and group negative reviews into buckets such as product defect, late delivery and quality issues can be done in minutes, with the information then being used to improve product descriptions, highlight keywords and enhance SEO.  The reviews and recommendations are the data that becomes far more valuable once analysed and utilised to enhance the online presentation to make the customer experience more targeted, make it feel more personalised by using language familiar to the customer.

Customer experience can also be enhanced by using AI to streamline the sales process by automatically integrating customer data, automating responses to abandoned shopping carts, and more. Customers can have the option to engage with a virtual online assistant to address simple queries and complete purchases more easily. AI can analyse purchasing patterns and provide product recommendations based on consumers' browsing behaviour.

Among the myriad issues that online marketplaces grapple with, forecasting demand is a critical one. AI applications can address this challenge by identifying and scrutinising consumer data to predict future demand and avoid the dreaded ‘out of stock’.  The escalating costs associated with unsold inventory pose a major obstacle to the profitability of many online marketplaces. AI assists marketplace operators in minimising the risk of both overstocking and understocking. AI applications achieve this by taking into account location-specific demand, analysing and correlating demand trends, and promptly recognising and responding to consumer demand for specific products.

The profoundly relevant outcomes generated by AI in response to search queries can exert a substantial influence on the revenue of ecommerce operators, be it in the B2C or B2B sector. This holds particularly true for B2B commerce, where 92% of transactions originate from search, underscoring the pivotal role of AI in this context.

Sellers are deploying various models that incorporate AI. Identifying common trends can be achieved much faster with the use of AI, enabling retailers to quickly spot both positive and negative themes unfolding. A rising number of complaints, quality issues and returns linked to a particular product or range can be immediately highlighted, and appropriate action taken – removal from the site, automatic discount offers for different products sent to affected customers, and so on.

AI is being used to continuously discover new and innovative applications for online marketplace sellers as people become more savvy with its use, its adoption grows and technology advances. Who knows how the ecommerce landscape will evolve in the coming years – it is a fascinating sector to be in.

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