No Turning Back: 4 Ways that AI Has Permanently Changed Selling Online
Brands that learn to harness these four technological superpowers will have a major leg up on their competition. Will you be one of them?
Selling on Amazon – as well as on many other online marketplaces – has dramatically increased in popularity over the last decade. A big part of that jump has had to do with powerful marketing strategies – incorporating sophisticated data sets – that allow brands to target their intended selling niches more effectively.
Entrepreneurs are finding it easier than ever to use artificial intelligence and machine learning to their advantage in 2023. It’s become a major ecommerce trend.
AI, and machines that “learn” are two terms that seem more suited to a Hollywood movie or a science fiction novel. However, in today’s fast-moving ecommerce landscape, they function as two brand new pillars of modern online selling.
But what does this mean for your online business?
This post details four big ways that artificial intelligence, including platforms such as ChatGPT, have permanently changed online selling.
Personalized Shopping Will Become the Norm
Social commerce has opened the door to a whole new set of potential data points.
The revolution of AI in ecommerce is most evident in the personalized shopping journeys it helps craft the customer experience for each user. AI’s ability to process vast data sets makes every interaction, from social media platform engagements to shopping cart additions, a valuable piece of data.
AI and machine learning models are instrumental in compiling these insights, and allow entrepreneurs to write a business plan tailored to each user, ensuring a holistic view of user preferences, buying habits, and potential future needs.
Every click, search engine result, voice search, or purchase represents critical information. AI technologies are then able to compile these tiny details to create a view of the user’s preferences, buying habits, and potential future needs.
Remember those times when you browsed for products or services, and moments later, saw a recommendation eerily related to your search? That’s AI at work. By predicting what a customer is likely to buy next, these algorithms ensure that relevant product suggestions pop up, increasing the likelihood of a purchase and boosting your conversion rate.
For sellers in categories like health and wellness or cosmetics, this means their product is presented to someone already spending time in that niche and very likely inclined to buy.
What sets AI apart is its ability to learn and adapt. In this case, to your ecommerce business. If a user doesn’t engage with a recommendation, the algorithm notes this. Over time, it refines its suggestions, ensuring that the recommendations are ever-evolving and aligning more closely with preferences when users shop online.
Beyond Just Products
AI’s personalization doesn’t stop at product suggestions. It tailors the entire shopping experience. From the ability to send personalized emails during occasions like birthdays to adjusting the user interface of a site based on user behavior, AI ensures that users feel valued and understood, fostering brand loyalty to your online store.
For brands, this high degree of personalization means increased sales, reduced cart abandonment rates, and a deepened relationship with customers. In a crowded marketplace, such tailored experiences make brands stand out, ensuring they remain top-of-mind for consumers.
AI-Driven Dynamic Pricing Increases the Agility of Your Ad Campaign
Dynamic pricing isn’t just a concept borrowed from economics textbooks; it’s a real-time tool powered by AI, especially in the realms of speech recognition and computer vision.
Amazon uses sophisticated algorithms and machine learning to understand and implement dynamic pricing. Amazon often modifies prices multiple times each hour through the implementation of its massive stockpile of customer data.
Similarly, individual brands can use AI and dynamic pricing to swiftly analyze competitor prices on platforms ranging from Amazon to Shopify, adjusting their strategy in real time to ensure maximum reach and profitability.
Real-time Market Analysis
AI doesn’t clock out at the end of the day. It continually monitors market trends, analyzing data sets like competitor prices, stock levels, and even global economic indicators. Brands no longer need to conduct manual market surveys; AI instantly provides the most current data.
Predict Demand Surges
Seasonal trends, sudden virality, or even global events can cause abrupt demand changes. AI analyzes past and present data to anticipate these surges. Brands in high-demand sectors, such as pet supplies or baby care, can capitalize on these predictions to adjust prices and maximize profits. With seasonal spikes in demand making for more complicated inventory management, this can be a game changer for ecommerce sellers in volatile markets.
Brands no longer have to constantly oversee and manually adjust prices. AI algorithms automatically change prices within set boundaries, ensuring the brand always offers competitive pricing without the constant oversight.
While the primary focus might seem to be on increasing prices during high demand, dynamic pricing also ensures brands don’t undervalue their products. If a product’s quality, reviews, and demand are high but its price is significantly lower than competitors, AI will recommend an increase, ensuring brands don’t leave money on the table.
AI Robots Could Revolutionize Online Customer Interactions
Increasingly, the little AI robots are fielding questions for entrepreneurs determined to develop an early relationship with shoppers.
Expanding your brand’s customer service capabilities is just easier with AI-powered chatbots. Beyond the simple use of using speech recognition, these bots utilize computer vision and machine learning models to ensure that customer interactions, from product inquiries to feedback, are handled promptly and efficiently.
Their real-time capabilities mean that whether a query arises from a social media post or a product listing, the customer is met with an immediate and accurate response. The earlier that you can begin a conversation with shoppers, the quicker you can establish brand confidence and trust.
Unlike human representatives who need breaks, chatbots are always on duty. Whether it’s a query in the middle of the night or during peak shopping hours, customers receive real-time responses. This constant availability enhances customer satisfaction and trust.
Modern AI robots do more than just answer questions; they tailor responses based on a customer’s browsing history and previous interactions. A shopper looking at a specific niche, for example, will receive recommendations and answers specific to that category, creating a more personalized shopping experience.
Data Collection and Insights
Every interaction with a chatbot provides the AI platform with valuable data. AI algorithms analyze these interactions to identify common queries, pain points, and areas for improvement. This continuous feedback loop helps brands refine their offerings and customer support strategies.
With reviews as important as they are to your algorithmic marketplace ratings, this is a critical advantage.
While there’s an initial investment in setting up and training a chatbot, in the long run, it can be more cost-effective than maintaining a large customer support team. Brands can allocate resources more efficiently, focusing human representatives on more complex queries while chatbots handle routine interactions.
While human agents can typically handle one, maybe two, inquiries at a time, chatbots can manage multiple conversations simultaneously. This efficiency ensures that no customer is left waiting, reducing potential frustration and cart abandonment.
AI Will Assist in Making Smarter Inventory Decisions
Computer science – particularly artificial intelligence – is playing a pivotal role in refining the inventory strategies of online businesses. Using predictive analytics, brands can forecast demand, ensuring that best-sellers are always in stock and niche products are ordered in optimal quantities.
This not only reduces overhead costs but also ensures that customers’ desires are met promptly, solidifying their loyalty to the brand.
Gone are the days of manual sales tracking and human gut-based predictions. AI-driven tools analyze real-time sales data, track buying patterns, and even account for seasonal variations. This provides businesses with up-to-the-minute insights, enabling swift adjustments.
Predicting Peaks and Troughs
AI doesn’t just look at past sales—it looks ahead. By analyzing historical data alongside external factors like upcoming holidays, local events, or even changes in weather patterns, predictive algorithms can forecast when sales may spike or dip, ensuring brands are adequately prepared.
Reducing Overstock and Stockouts
By accurately predicting demand, brands can optimize their inventory levels. This means less money tied up in excess stock and reduced storage costs. More importantly, it prevents the dreaded ‘out of stock’ notice, which can deter potential customers and harm a brand’s reputation.
One of the standout features of AI is its ability to learn and adapt. As the system ingests more data, its forecasts become increasingly accurate. Over time, brands can fine-tune their inventory strategies, balancing supply with predicted demand almost seamlessly.
Integration with Suppliers
Advanced AI systems can even communicate with suppliers, automating reordering processes. When stock levels dip below a certain threshold, the system can automatically place an order, ensuring consistent product availability.
Holistic Business Insights
Beyond inventory, AI-driven insights can shed light on broader business trends. Brands can gain a clearer understanding of which products are perennial best-sellers, which ones are losing traction, and why. This data is invaluable for future product development and marketing strategies.
Get Expert Help Staying on Top of the Latest in AI
If you want to make the most of these new uses for artificial intelligence, your best bet is to get started with them as soon as possible. While many of these tools are easy to get started with right away, others require advanced knowledge of how to integrate them into your existing systems and processes.
If you’re already keeping up with the breakneck pace of technological change, you may already be seeing an advantage over those competitors who don’t.
On the other hand, if you feel that you’re already behind the curve and want to get ahead again, Canopy Management’s tech-savvy Amazon experts are here to help. Start the conversation about how you can better use AI to accelerate your Amazon channel growth.
To succeed in a competitive marketplace, you need synergy between the latest software tools and deep marketing experience. Canopy’s full service account management team brings both to the table to accelerate your growth.
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