Ecommerce makes shopping more convenient, but it’s not easy for retailers to acquire and retain loyal online customers.

Competition online is fierce and dominated by behemoths like Amazon. The economy and consumer spending habits are both volatile, and meeting customers’ expectations in an omni-channel marketing environment is complex.

For your eCommerce retail channel to thrive, you need to understand, anticipate and adapt to changing conditions, trends, and customer preferences.

Embracing technology is how retail is evolving to meet this challenge. In particular, the application of artificial intelligence (AI) technologies has enormous potential to improve the profitability of online stores.

Here’s five use cases for how AI is changing online sales for the better | Benefits of AI in eCommerce:

1. Personalised and precise shopping

AI-driven tools allow you to engage customers with personalised information or offers, which drives more conversions and brand loyalty.

One of the most obvious applications is recommendation engines, which is how Netflix is able to predict shows we might like to watch. Sophisticated filtering of your site’s product portfolio, based on customer data, lets you present relevant, contextualised and highly specific product recommendations.

Applied well—with thought given to placement and usability—product recommendations can grow eCommerce revenues by as much as 16 percent.

AI can also improve the search functionality on eCommerce sites, helping users find exactly what they want, faster. Intelligent search tools not only draw on past behaviour, but ‘learn’ about customers, infer details that aren’t included in search terms, and adjust search results accordingly.

Visual search is also being enabled by AI—shoppers can upload an image and be presented with search results that match, without having to type a word.

2. Machine-assisted discovery and sales 

Virtual assistants, chat bots, and personal shopping assistant apps help people save time and energy while shopping online.

AI-powered assistants are being developed by brands looking to get a foothold in their market—because convenience and immediacy matters to today’s consumer. Assistants may leverage devices like virtual home assistants (e.g., Amazon Echo Dot and Google Home Mini), social media platforms, or be integrated with eCommerce websites.

Virtual, automated and algorithm-driven interactions are not impersonal thanks to the growing maturity of AI and techniques like natural language processing

For instance, Ticketmaster launched an assistant for Facebook’s Messenger app in 2017 to make it easy to discover events and seamlessly buy tickets. Based on questions like, “What’s happening tonight?”, users get specific details delivered automatically by the bot in a conversational tone—that’s engaging and helpful

3. Smarter purchasing and stock management

Configuring business systems to capitalise on AI and machine learning can improve what happens behind the scenes to ensure customers get the goods they want, when they want them.

Purchase planning and inventory management are both critical for success in ecommerce. You can’t make sales and dispatch items quickly if you don’t have stock on hand. If you run out of stock too quickly, you’ll lose sales and also risk frustrating consumers.

You need to be able to reliably predict turnover and plan purchasing to allow for shipping lead times, seasonal changes, and product trends—enter AI-enabled demand forecasting.

Because your customers are online, you can access copious amounts of data—including behaviour on your site, search history, and competitor pricing—to feed into AI tools to enhance your decision-making about what to stock to buy, and when, in order to meet customer expectations.

4. Optimising the user experience in the eCommerce platform

When shoppers have their needs met more intuitively, it reduces friction in the buying process.

That’s why clever retailers take eCommerce user experience (UX) very seriously. Understanding what your customer’s goals are and how they experience your website, allows you to design better interfaces and interactions.

You need insight into customer’s needs before you can design tailored AI-powered solutions to address their needs. AI can then underpin and improve UX across your customer touch points.

For instance, you might collect information about the behaviour of website visitors that click your ‘Add to Cart’ button, then use that data to create algorithms that adapt your site dynamically for individual customers, at scale.

AI tools can also help you predict future behaviour at scale and follow-up with the right customers through personalised emails or advertising, in real-time

5. Detecting and preventing fraud

The convenience of online shopping also makes life easier for fraudsters. Two key ways this manifests is credit card fraud and fake reviews. Both cost online retailers big time.

Fortunately, improving accuracy and reducing risk are two areas where AI shines.

AI solutions that detect patterns and learn from every credit card transaction are better able to detect sophisticated and ever-changing cybercrime techniques. Models that use a wide variety of data points can also adjust as people’s habits and lifestyles change, helping minimise false positives (thereby avoiding inconveniencing your customers)

Stopping fake reviews will improve trust in your brand and products. A survey found 86 percent of customers were influenced in their buying decision after reading a negative online review.

Machine learning models are superior to humans in being able to distinguish between fake and genuine reviews. If your eCommerce site relies heavily on reviews, developing ways to prove their veracity by using AI is a wise move.

Invest in your digital ecosystem for AI-enabled eCommerce

Achieving healthy earnings from eCommerce channels depends on getting the fundamentals right as well as innovating. That means running a lean operation with optimal stock levels, excellent usability, and being able to proactively provide the experience customers expect.

AI solutions can give you the edge, as the use cases I’ve covered above show.

However, retailers must embrace digital technologies intelligently—and commit to ongoing innovation—to get the greatest return on their spend on marketing, business systems, inventory, and their team.

One of the barriers is often building out your team’s software development skills in a competitive IT talent market—which is why outsourcing technical skills can be a cost-effective strategy

One thing is clear, standing still is not an option when artificial intelligence capabilities are poised to revolutionise eCommerce.