Understanding AI & Data Analytics
We know that prediction is complex and would be more complicated when it comes to predicting human behavior. In this digital era, where every click, purchase, and interaction leaves a data footprint, the synergy between AI and data analysis has become the catalyst for transformative success.
As eCommerce businesses navigate the online marketplace’s intricacies, harnessing the power of intelligent algorithms and insightful data interpretation is the key to unlocking unparalleled business growth.
Join us on a journey through the landscape where bytes meet buying behavior, algorithms decipher trends, and innovation thrives on the insights that propel eCommerce enterprises into the future. Welcome to a world where data is not just information but the fuel of AI and data analysis that stochastically drives innovation and shapes the eCommerce landscape of tomorrow.
Artificial Intelligence (AI) and eCommerce
Artificial Intelligence (AI) is defined as “the theory and development of computer systems able to perform tasks that normally require human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages.”
– Deloitte
Artificial Intelligence (AI), along with cognitive technologies (including Natural Language Processing or NLP, Machine Learning or ML, Robotic Process Automation or RPA, and complex algorithms), can help businesses understand human behaviors, predict their requirements more accurately, make informed business decisions, and optimize customer experience (CX). Artificial Intelligence has the capability to impact each component and function across businesses. We can bucket that into thriving for eCommerce’s future without extrapolating AI.
Let us look at the edge, which is powered by the entire ecosystem of Artificial Intelligence (AI) in the eCommerce world.
1. Targeted marketing with personalized advertising
Personalization pops up with more targeted marketing when eCommerce businesses use audience analysis, data, and buying behaviors in the most humanized way possible. Advanced AI uses customer insights and various facets to identify and customize content and ads for better engagement and interactions. AI-powered analyst engines use data and behavioral analysis from different touch points to bring more meaningful information that marketers can use for targeted campaigns and gain better ROIs.
2. More value to customers and increased customer retention
Nobody knows exactly how these personal AIs became a part of our smartphones and ended up being part of our lives to add value. The interesting part is that these AIs will gradually know absolutely everything about us. Then, there are the AI-enabled omnichannel personalization strategies that add value at each level of customer interaction. Delighted customers increase customer retention rate and give a positive word of mouth.
3. Seamless sales process and efficient automation
AI enables eCommerce brands to attain a seamless process where user data can efficiently initiate the follow-up process, customized product recommendations, personalized ads, and exclusive deals to convert them into customers. With the help of little or no human intervention, AI brings automation to repetitive processes that outpace manual human work. This enables eCommerce owners to invest resources in other essential processes and save time and costs.
Artificial Intelligence (AI) Applications in eCommerce
Adopting and integrating Artificial Intelligence (AI) into eCommerce business operations can pace up the transformation leap to proper eCommerce businesses for the future. Brands can simplify data analysis, make more informed decisions, automate processes, and enable more seamless transactions.
Let us explore some AI-powered applications that will revolutionize the way eCommerce business operations in the future.
1. Dynamic pricing
Dynamic pricing strategies are not new to the eCommerce world. However, the use of AI-enabled dynamic pricing is a revolution. AI can adjust the pricing in real-time for better conversion rates based on specific demand, competitive pricing, and visitor behavior. Amazon uses the AI-enabled dynamic pricing model of millions of products multiple times a day to ensure users get the best deal and maximize profitability for Amazon.
2. Sales and demand forecasting
In the research by McKinsey & Company, it has been concluded that “Continue to invest in detailed, real-time customer analytics to monitor and react to abrupt shifts in consumer demand,” so eCommerce brands can more accurately optimize the pricing and forecast demand to maintain inventory and logistics. With AI, eCommerce businesses can leverage historical data analysis, trends, and demand patterns to forecast demands and optimize the allocation of resources for better business operations.
3. Personalized product recommendations
Artificial Intelligence (AI) is brilliant when it comes about personalized offerings. It understands what humans want from tech and delivers it using browsing history, past behavioral analysis, purchase history, and even audio analysis to design personalized offerings, follow-up emails, and discount offers. Spotify, the leading music streaming app, uses AI to offer a personalized experience; you can check out their ‘Discover Weekly’ services that pick 30 tracks based on your past preferences, search, and browsing history. Spotify brings an annual campaign based on users’ listening preferences, trends, and preferred artists in a compilation named ‘Wrapped.’
4. Smart logistics and supply chain management
The AI ecosystem is there to boost the existing logistics and supply chain management in the ‘smartest’ way possible to outpace the competition and avoid ‘Out of Stock’ and ‘Delay in Delivery’ situations. eCommerce businesses are also time-sensitive; customers want their products delivered quickly. However, managing stock as well as ensuring timely delivery across locations is challenging, thanks to AI. With the use of AI, business owners can more accurately predict demand, optimize inventory, and automate delivery.
Data Analytics and eCommerce
Data, which has absolutely everything about you, may know absolutely everything about you. Data gathered from multiple data sources about customers, products, and market trends can be useful to identify customer concerns and business challenges and empower businesses to make informed decisions. Data analytics for eCommerce helps to extract and process metrics of online consumer behavior to make eCommerce competitive in the landscape with an extra edge with informed decisions. With eCommerce data analytics, businesses can find the bottlenecks and redefine their strategies at various levels of business operations.
Let us look at how powerful data analytics is for eCommerce businesses.
1. Find and predict trends
eCommerce data analytics applications use business data as an interconnected system to get a deep review and analysis to find various trends in your business operations. It helps to understand how business performs and predict future trends to plan further moves.
2. Review and optimize pricing models
Pricing models are essential to define an eCommerce business’s sales figures and profitability. Modern eCommerce data Analytics enable brands to review the pricing of each product and find the optimal price customers are ready to pay among different customer segments due to the price-sensitive nature of customers.
3. Understand customer and marketing data
Data dilemma is a real challenge for marketers when they have a pool of data from getting lost in the abundance of data. Where to start, what to search, and everything necessary are questions they need answers to before moving further into strategies.
Users browsing history and interactions during the customer’s buying journey reflect a lot about them that can be useful in defining marketing strategies. eCommerce data analytics helps brands understand customer and marketing data to get insights about growth, engagement, and revenue. With these analyses, marketers can get real-time stats, understand what is working quickly and more productively, and then make more informed decisions.
Data Analytics Applications in eCommerce
Data Analytics (DA) for eCommerce is constantly collecting and processing the data to show us things when we ask for them for business insights. It will present the reality of customers and their interactions with businesses through various analyses.
Let us talk about those data analytics applications for eCommerce businesses.
1. Descriptive Analytics
It is considered the core of data analytics, which describes and summarizes the data points constructively to find trends, patterns, and relationships. eCommerce businesses can increase the conversion rate by defining the Key Performance Indicator (KPI) dashboards, monthly revenue reports, and sales leads insights.
2. Predictive Analytics
Uses the current and historical data of customers and visitors to define logical predictions and forecasts about risk assessment sales prognostics, identify the possibility of lead conversions, and prepare accordingly.
3. Prescriptive Analytics
It enables businesses to make informed planning decisions by analyzing past performance and future trends to find the future moves that require achieving future targets. eCommerce businesses can improve scheduling, improve customer experience (CX), earn customer loyalty, boost revenue, and streamline production lines to avoid last-minute glitches.
To Summarize...
As we said above, the role of Artificial Intelligence (AI) and Data Analytics is how they granularly approach the insights and give a meaningful output to simplify jobs for eCommerce business owners and marketers. Insights from this analysis fiercely advocate for future developments, trends, and a transformation in the way customers interact with eCommerce stores to quickly adopt it to stay ahead in the businesses.
We at Krish, as a leading full-service global digital commerce agency with our legacy, commitment, and enriched experience of 20+ years, enable brands to transform their eCommerce experience for the future of shopping. Our eCommerce-focussed marketing automation servicces and Analytics & Insights guidance can help you leverage these transformative forces and be ready for the future.
Get an exclusive expert consultation to explore how to thrive in the fierce eCommerce competition. Connect with us now.
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Minal Joshi is a content marketer at Krish with a flair for eCommerce and Digital Commerce aspects. She is a MarTech fanatic with a knack of writing with which, she helps brands to curate, create, & commence digital brand positioning. Sharing insights via articles, case studies, eBooks, Infographics, and other forms of content creation is what she lives for. Being an ardent traveler, when not writing, you'll find her sipping coffee into the mountains or petting a stray.
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