Artificial intelligence is impacting customer choices, using the knowledge of previous purchases, searched products and online browsing habits to provide a personalised feel.
By Marko Salic, CEO of the Argility Technology Group
Before we get into the role of artificial intelligence (AI) and where it is set to take digital commerce, I think we should begin by unpacking a definition of digital commerce – what does it mean?
It can be defined as the process of selling and buying products and/or services using digital channels. It includes the people, processes and technologies necessary to execute the offering of product, promotions, pricing, analytics, customer acquisition plus retention, and customer experience at all touchpoints throughout the buying journey.
This definition can be applied to all sectors of business irrelevant of area of operations, so it includes banking, retail, automotive, etc. Sector is irrelevant in a world of digital transformation at the speed of COVID – all businesses seek digital channels to market their goods.
Today, digital channels have been expanded to relate to digital transformation that is inclusive of people, processes and technologies used throughout the customer buying excursion.
In the retail sector, online sales are no longer an option, but a necessity for brick-and-mortar businesses. On the consumer side, the COVID-19 crisis has caused a structural shift of demand toward digital commerce that is likely to continue in the years to come.
As far back as 2017, Gartner research reported on the results of a survey of 307 digital commerce organisations globally, in an effort to understand AI adoption and investment plans in digital commerce.
The research firm noted that 70% of the companies surveyed reported their AI projects as successful. Three-quarters of respondents said they were seeing double-digit improvements in the outcomes they measured.
The most common metrics used to measure the business impact of AI were customer satisfaction, revenue and cost reduction, for which respondents cited improvements of 19%, 15% and 15%, respectively.
Knowledge of updated technologies will be key in the race for a competitive-edge in digital commercial markets.
But that was back in the day – when global pandemics were confined to Hollywood movies predicting a viral takeover of the planet – pure science fiction – we thought. COVID-19 served to produce a sudden shift with lasting consequences, including the exponential acceleration of digital adoption.
Machines are taking over?
Pandemic or no – AI driving digital commerce is not only here to stay but forging ahead. Examples of this include companies such as Facebook and IBM that have expressed their interest in developing artificial intelligence as a new source of business, plus the purchase of DeepMind by Google, as far back as 2014, reinforces the point that the business world is well on the way to being run by AI and machine learning.
Knowledge of updated technologies will be key in the race for a competitive-edge in digital commercial markets. Technologies that are emerging include live telephone and online conversations predicted to leave consumers with a perception that they have just had a live chat with a human being, when in fact they have been interacting through an automated bot response.
Automation, of course, has made great inroads in enhancing customer experiences and has in many ways been the pathfinder leading to AI interventions. Machines may or may not be taking over but it is certainly apparent that both industry and consumers want them to – to achieve a successful interaction.
Great Learning lists examples of the powerful ways in which AI applications will dominate the e-commerce industry in 2021. Examples include a predicted increase in the volume of voice searches, with busy people relying on voice assistants like Alexa and Siri to check their daily schedules or find out about a product to buy online.
Conversational chatbots are an easy way for customers to ask questions regarding products – examples include Starbucks and Dominos, which are said to be using this method to great advantage.
Recommendation systems are described as one of the easiest ways to convert AI capabilities into sales. Statista reports that mobile sales are reflecting a serious rise; research conducted in 2019 estimated that by the end of 2021, 73% of e-commerce purchases will happen through mobile devices. Statista further reports that Instagram has one billion monthly accounts that are selling actively through their social media handles.
Successful digital commerce strategies can be achieved through analytics providing marketing and data-driven insights that aim to build and optimise brand performance on digitally commercial sites. Gartner agrees that companies need to ask themselves how do they refine a digital commerce strategy while at the same time optimising performance.
AI is transforming digital commerce
As you can see, this is being achieved via many avenues, including chatbots and other virtual assistants constructed using AI and producing more intuitive responses and enabling better customer experiences.
Intelligent product recommendations is one of the major applications of AI in e-commerce – it essentially produces personalised product recommendations for online shoppers and is said to increase conversion to sale rates by 915%.
In fact, personalisation is rated as one of the most effective issues to come out of the use of AI in e-commerce and is the reason it lies at the core of online marketing. Combined with the use of big data, AI is impacting customer choices thanks to its knowledge of previous purchases, searched products and online browsing habits. In terms of back-office functions and inventory management – through AI the right levels of stock are maintained to fulfil market demand.
Businesses failing to prepare for commerce led by AI, virtual reality, augmented reality and holograms, for example, are on a perilous path to extinction.
Source: IT WEB