Optimize Your E-Commerce Workflow with Artificial Intelligence (AI) and Automation
If you are running an e-commerce business, you will agree that it is nothing short of running a marathon. It has to be continuously and consistently monitored to ensure that everything runs smoothly.
If we look at the e-commerce market, it is growing at a CAGR of 18.9% from 2024 to 2030. This indicates a possibility of new businesses appearing in the market, which further leads to stiff competition and the survival of the fittest scenario. And that’s where AI can make a difference.
Whether you are a new e-commerce venture or an existing one, the integration of AI is necessary for you to overcome manual bottlenecks, scaling issues, and more. By automating content generation, providing targeted recommendations, and streamlining customer service, business owners can boost their e-commerce operations, thereby taking out the market competition. Read ahead to learn how!
Understanding Automation and AI in E-Commerce
The role of AI and automation is significantly high in e-commerce, especially now when content creation is faster and customer support can be automated.
E-commerce Automation
Automation in your e-commerce business will include the use of intelligent tools and systems to perform repetitive, time-consuming, or data-driven tasks without any human intervention.
Automation boosts operational efficiency, accuracy, speed, and scalability; all these elements are helpful for you to stay competitive in today’s fast-growing market space. Some of the use cases of e-commerce automation include
Automated Order Fulfillment & Warehouse Robotics
Customer Support & Chatbots
Personalization and targeting
AI in E-Commerce
If you use AI in your e-business, it can harness advanced technologies, such as ML, NLP, predictive analytics, and computer vision. The technologies can be helpful in several ways, including
Anticipating customer needs
Automating complex workflows
Deliver deeply personalized shopping experiences at scale
According to industry data, 84% of e-commerce businesses are already using AI in some form, which has led to a 15% boost in conversion rates and reduced shopping cart abandonment by 20%.
How are Automation and AI Impacting E-Commerce
By taking care of repetitive tasks and powering intelligent, proactive decision-making, AI and automation can easily place you at the lead of the e-commerce market. Here are some noteworthy use cases.
Personalized Shopping Experiences
Personalization backed by AI can help your e-commerce brand in several ways, including designing homepage layouts to product recommendations.
These steps are taken based on the analysis of user behavior. With the help of AI, Saks Global boosted revenue per visitor by up to 7% and lifted its conversions by nearly 10%. These dedicated experiences deepen engagement and drive more loyal, higher-value customers.
Chatbots & Virtual Assistants
Unlike the human workforce, AI chatbots and virtual assistants can enhance your e-commerce operations by offering 24/7 instant support, handling FAQs, guiding purchases, and boosting satisfaction. Today, these chatbots can handle more comprehensive and conversational user queries for an enhanced user experience. Amarra, a global special-occasion gown brand, uses ChatGPT for handling 70% of customer inquiries.
Inventory Management
With the help of AI algorithms and automation processes, you can predict demand, balance stock levels, and optimize fulfillment across channels. This helps in overstocking and the availability of necessary inventory items on time. Taking the previous example of Amarra, the company uses AI to study historical data and seasonal trends to predict stock demand. This has helped the brand reduce overstocking by 40%.
Fraud Security
Data threats and approving invalid orders can eat into the revenue and reputation of an e-commerce brand. With AI, business owners can prevent this by analyzing transactions in real time, which allows them to identify suspicious patterns that may indicate fraud. A great example of AI used for fraud detection is MasterCard. The firm witnessed a boost of 300% in fraud detection rates, and it also reduced false declines by 22%.
Visual & Voice Search
Predictive Analytics for Sales and Trends
These two are very convenient features offered by e-commerce giants like Amazon. Users can either snap a picture or just provide a voice input in their native language to search for the product. At the backend, smart AI systems can analyze the input and display the relevant results. According to some industry stats, 36% of consumers have used visual search.
Ideally, automation is backed by AI, and with this combination, you can forecast product demand, optimize their pricing, and identify emerging trends. Thanks to predictive analytics, this can be done based on historical data, seasonality, and external factors like weather. There are several brands that have witnessed a forecast efficiency improvement of 20–30% with AI.
AI-Based Image Generation and Editing
With the use of generative AI, creating images has become a piece of cake. Yes, not all the AIs are accurate in this, but some models provide just the right visuals rapidly and cost-efficiently. Brands like Zalando are using Gen AI to produce imagery faster for their e-commerce business. So far, AI and automation have reduced the time (3–4 days from 6–8 weeks) to produce the visuals and their cost (by 90%).
AI-backed Content Generation
Besides images, Gen AI tools can also help in generating other content types, such as
Product descriptions for the site and Google feed
Marketing email generation
Social media post
Banner generation
Blog posts
The rapid content generation with AI can help brands save time and boost consistency across all marketing channels.
Use Cases of AI and Automation in E-Commerce
With the use of AI and automation, several brands across the world have streamlined their inventory management, demand forecasting, packaging optimization, and other processes.
1. A jewelry brand enables product search via NLP. A well-known jewelry brand uses powerful natural language processing capabilities to help customers find the diamonds that they are looking for. The brand enables customers to search for the product by typing. Instead of using complex filters or sliders, you can just type what you want, and our intelligent system will do the rest.
For example, the customer may type, “2.5 carat round diamond under $5000 with excellent cut and D color.”
AI easily maps your words to find the exact match for the provided query almost instantly.
2. Sephora excels at personalization with AI. The makeup and skincare products brand has invested in an AI recommendation engine that merges the power of collaborative filtering, content-based filtering, and deep learning techniques.
These techniques are used to study several aspects of user behavior to provide personalized product recommendations to them. The AI engine studies the following factors.
Search queries
Browsing history
Click-through rates
Abandoned carts
In-store purchase history
Quiz results
3. IKEA uses AI and automation for demand forecasting and reducing logistics costs. With the power of AI and robotics, IKEA implements an automated warehousing and distribution system. This technology-backed system ensures that operations are efficient and accurate; that directly reduces costs and delivery times.
According to a study, the use of automation can reduce logistics costs by 40%. Moreover, the brand also invests in AI-powered “demand sensing” technology that improved the overall forecast accuracy by 5% in a pilot in Portugal.
4. Marks and Spencer uses AI to be a style guru for the shoppers. Marks and Spencer, which is a multinational retail brand, uses AI to suggest outfit choices to its shoppers. As a part of efforts to boost its online sales, the brand uses shoppers’ body shape and style preferences to curate choices. The shoppers also have the choice to provide their data on their size, body shape, and style preferences to get a personalized experience.
Conclusion
Today, the use of AI and automation has become a necessity, not just for e-commerce businesses but for all of them. As we have seen, AI and automation can…..
The Complete Blog Published at Qualdev: Transform Your E-Commerce Workflow with AI and Automation