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Artificial Intelligence (AI) is firmly becoming a word for everyday use. We can track its presence almost in every app and in non-obvious places. No wonder global businesses wish to implement this technology to enhance their products. AI allows not only to automate processes but also to tracking inconsistencies, and malware helps in price selection and recommendations, and better interacts with customers. The results industries achieve with the help of Artificial Intelligence are beyond expectations. Due to the global switch to remote and online, the e-commerce sector is as demanding as ever. People are buying more and opening new opportunities for bad actors wishing to take advantage of a lucrative market.
Annually the number of security and fraud attacks is rising. In response to this, companies are trying to ensure business and clients. Yet traditional software cannot track the sophisticated moves of hackers, and it takes hours and days for ordinary workers to track and note all the suspicious actions. This is where AI comes in handy. This article will tell you about the benefits your e-commerce business can gain with AI technology.
AI and security
According to Statista, since the pandemic, small and medium enterprises (SMEs) and large online retailers reported fraud attempts raised 80-82%. Another research shows that businesses worldwide lost $20 billion due to e-commerce fraud attacks in 2021. The E-commerce market is facing more and more complex ways of fraud. It is expected to reach $69 billion by 2025 for its detection and prevention.
With the help of AI, this process can be more smooth and more seamless. Thanks to machine learning and deep learning algorithms, the detection of anomalies and weak spots, and preventive scenarios will get you high-precision results and save you money. There are three fraud types that companies are facing often:
- Identity theft – when hackers obtain access to a user’s ID, bank accounts, or payment information and use it to buy things on an e-commerce website.
- Merchant fraud – when bad actors create fake online stores, like one-day pop-up shops, and drive traffic to them with Facebook or Instagram ads.
- Chargeback fraud – when a customer requests a refund for a legitimate purchase under the pretext that they didn’t receive the product or that something was wrong.
What are the benefits of AI for e-commerce?
Artificial Intelligence opens new business opportunities. Not only does it help to save costs with enhanced fraud protection, but it also introduces new ways to communicate with customers. Here, we’ve gathered only a few options to gain a competitive advantage.
Better user experience
The usage of virtual assistance and chatbots that use language processing and machine learning technologies are not new but highly effective when it comes to user experience. We all are probably acquainted with Google Assistant, Amazon’s Alexa, and Apple’s Siri. For e-commerce, implementing these assistants is crucial because they can be used 24/7 and handle users’ questions effortlessly, thanks to AI enhancement. This implementation gives companies a great competitive advantage and customers a personalized approach, especially if it’s not a worldwide language of use. Virtual assistants can perform various tasks from product research to listing to managing inventory. For customers, it’s a quick and easy way of getting information and necessary assistance.
Personalized product recommendations
Thanks to AI, it is easier than ever to collect and analyze customers’ data to offer them the most suitable products. Personalization is a key factor that leads to customer loyalty and a higher possibility of future purchases. Websites and online shops recommend certain items with machine learning analyzing their purchase history. This information allows retailers to deliver a personalized experience, implement a marketing campaign, optimize pricing, and generate customer insights.
Thanks to AI, retailers can more easily and precisely establish a product price based on supply and demand. With data access, this tool can predict which product should go with a discount, which price is more suitable for the buyer, and what is in demand. With AI in this sector, it is almost impossible to lose.
Thanks to vast data access, AI systems can explore complex and varied options for customer engagement quickly and instantly optimize their performance. This means marketers can set parameters and learn to achieve precision. AI enhancement enables operators to understand their customers better and identify new trends.
The predictive powers of AI help better establish logistic processes and forecast transit times, demand levels, and shipment delays. In addition, smart logistics uses real-time information, RFID tags, and the like for inventory management and better forecasting demand. ML algorithms make the industry smarter, automated, and enhanced.
Future of AI in e-commerce
AI opens new opportunities for e-commerce. It’s impacting how retailers sell their products and offer a more personalized and better shopping experience. AI technology also helps identify and analyze customers’ behavior to engage and retarget them. Automated systems are quickly replacing standard ways of customer-retailer communication, from emails to chatbots — no wonder the e-commerce industry is quickly adopting AI technologies. By 2025, Tractica predicts that the profit generated from the direct and indirect application of AI software will increase to $59.8 billion. The increasing adoption rate is driven by many factors, such as new customer demand, cost-effective and personalized customer service, and the need for more accurate insights into customer trends.
▪ 86% of decision-makers state that in 2022, artificial intelligence is a “mainstream technology”.
▪ The use of voice recognition is important as 22% of users prefer talking to an AI voice assistant instead of typing.
▪ In another report, 75% of IT leaders stated that the usage of AI technology will help enhance security.
▪ The global Conversational AI market size is expected to grow to $13.9 billion by 2025.
▪ Facebook Messenger hosts over 300,000 active chatbots. Chatbots are also one of the most popular methods of implementing AI in eCommerce. (Hootsuite)
▪ Gartner predicts that by the end of this year, artificial intelligence will handle 15% of all customer service interactions in the world, without any interference from their human counterpart.
AI technologies quickly evolve and emerge in different industries, from healthcare to logistics and e-commerce. It gives businesses a competitive advantage but also automates their workflow, enhances sales, allows them to analyze and optimize their prices, and predicts situations. If you’d like to learn more about how your e-commerce business can prepare itself for an AI future, you can count on Proffiz.
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