Go anywhere today, the essence of AI and Machine Learning is spreading in every sector. In 2018, 28% of retailers had implemented AI or ML in some way, and no wonder experienced an astonishing boost compared to 2016. The numbers are increasing and by the end of 2021, we might see even more impressive statistics.
With these rising numbers, it would be not wrong to say that ML is conquering the eCommerce sector too especially, where sales are happening every day. This means that the availability of business has to be there for the customer and, this is when AI becomes a demand.
Many eCommerce stores or businesses are already using ML or AI for better understanding whereas the rest have noticed the importance of using AI in eCommerce and about to adopt it. To generate more prospects to provide better user engagement, the eCommerce business is joining hands to machine learning.
How is Machine Learning Used in Retail eCommerce Sectors?
Machine Learning allows Etailers by optimizing prices, collecting customer data, and by making logistic processes smoother and more effective. The ability of Machine learning to streamline the retail industry reduces costs and build a stronger relationship with customers.
Here’s the list of businesses that have used Machine Learning to up their retail game.
- Amazon – The world’s largest retailer
- Used to forecast demand
- Identify crook purchases
- For better promotion
- Asos – an online fashion outlet
Used to track customer’s shopping habit
- To optimize delivery routes
- Provide streamlined checkout
- Recommending product based on user history
How Does Machine Learning is Bringing a Great Change in eCommerce?
Whether it’s eCommerce or other businesses, a great user experience is a must, and that just what machine learning is offering. Yes, the future is here, and the future is machine learning, a technology that once sounded futuristic is nowhere as smart businesses also have realized its importance and why it’s not an optional tool in today’s technological world. They have begun implementing ML in order to create the easiest possible user experience for their customers.
It is estimated that in upcoming years, a consumer’s relationship with a business will be managed without interacting with a human. Well, the internet is there to provides consumers with an amount of information and options, but it also makes conversions harder for businesses, either because of abundant options or price matching. With ML, businesses can use algorithms to gain insight into the wants and needs of the consumer.
Applications of Machine Learning in the Retail industry
Now, let’s see how Machine Learning has a powerful effect on the retail industry or Etailers. Here’s the list of application which being already used with Machine learning and bring a remarkable change in business.
Stock and Inventory:
To ensure a successfully running business, we need to make sure that there are streamlined stocking and inventory management in a fast and automated manner. ML is one of the choices you can consider because it helping retailers the chance to purchase online and offline data to predict inventory needs in real-time. This information could be used to create a daily dashboard of suggested orders for purchasing. And no wonder ML will help you with the form of cameras that can detect the number of items of a particular product throughout the entire store just by looking at it very soon.
Predict Customer Behavior:
This is like a blessing! Yes, the technology ML also has a vital role in analyzing customer data and predicting future behavior. Etailers can use this data to better understand the requirement of their customers by assessing the price range of their previous purchases, recommending items that they may be interested in.
Machine learning algorithms can generate suggestions for products that are complementary to items they are purchasing instead of simply pushing a hot item that is completely unrelated to what they are buying. Further ado, Etailers can use add-on options for daily products that they may want to buy on a daily, weekly, or monthly basis if they’re happy with the product.
Predict Behavior for Marketing Purposes:
Machine learning plays a vital role in tracking behavior for marketing purposes, it can be used to define how well a product sells based on the position it’s in relative to the rest of the store. One of the best ways to predict how customers react to a certain product is by cameras as it detects the walking patterns and the direction customers face when walking down the store.
Improved Customer Service:
Superior customer service always means a healthy interaction with a customer, which can be easily implemented with chatbots or live chat, and that already works well in the eCommerce industry. We know that chatbots are for instant response and used to answer a question of customers to provide a great shopping experience. But it becomes a challenge for small and medium-size retail businesses to manage customer service representatives and monitor chats.
While adapting to machine learning can help in implementing an intelligent chatbot that can respond to all the queries put forth by the customers. These intelligent chatbots know how to help customers with the right information and manage online chat sessions. We can also use chatbots in social media platforms by training to post and support.
Finer Product Search:
Machine learning technology is not only limited to a single benefit as we can also improve product search by generating relevant search results for the shoppers and by increasing onsite product visibility. Again, with machine learning algorithms, we can focus on conversion rates, product margin, and customer ratings. These algorithms help you understand what the shopper is looking for instead of what the shopper has typed or searched. Hence, these systems provide product search results that your shoppers are likely to want and buy.
Superior Product Pricing:
This could be a major benefit for your eCommerce business profit because an algorithm that is used in machine learning tech can also analyze and understand the demand for a product, customer behavior patterns, and pricing trends to set the best price. This will help you in order to enhance the profit and meet the goals of your eCommerce business.
Companies know that accurate pricing can make or break their business but ML now has the ability to offer dynamic pricing options, which means that the price of certain products changes over time through an algorithm that considers a range of pricing variables. With this technology, Etailers can benefit by generating the right price at right time without losing a purpose of main goals such as profit or revenue. By doing this, ML can easily adapt to changes in the market and enhance a company’s ROI.
Identify Crook Purchases:
One of the common concerns of large-sized Etailers nowadays is to detect and management of fraudulent transactions. Well, attackers are the daily challenge for Etailers, and no wonder these crooks are ruining eCommerce businesses by breaking every security line that Etailers made. And businesses are using software to prevent their stores but somehow, they still lacking and couldn’t manage to secure. In this case, machine learning technology can help analyze the fraud pattern and resolve the issues by predicting the fraudulent transactions or fraud patterns.
In Making Right Decision:
Machine learning technology can also help in making the right decision for your eCommerce businesses. They can predict the demand for a product, identify the inventory and stocking problems, classify products and identify keywords, manage marketing campaigns, estimate the cost of shipping and packing, and enhance sales.
From the above-mentioned applications, it is clear that an increasing number of businesses are now relying on Machine learning technology for pushing business conversion, growth, and customer engagement. In the future, we can see more innovative ways to use Machine learning for specific business contexts.
Need help on how to increase the profit margin and seek a top place in the eCommerce market? M-connect Media can help you do that by guiding you on how to implement Machine learning technology for your online retail business. Consult our eCommerce experts today!