AI in Retail – What is Artificial Intelligence and How Can It Be Used for eCommerce Growth?

Narrow AI – Focused on a narrow task such as processing natural language or personalising advertisements for customers. These smart systems address specific needs. This is also called weak, vertical or applied AI.

Machine Learning – This is a subset of narrow AI. It enables programs to learn by training, instead of being programmed with rules. It is powered by algorithms and is driving a lot of the developments, including natural language processing, data mining and image recognition. Quite often AI and machine learning are used interchangeably.

General AI – This term is used for AI that has the cognitive abilities and comprehensive knowledge that makes it indistinguishable from humans. We’ve not reached this stage yet. When it happens, this AI will have superior speed and ability to process data than humans.

Neural networks or Deep Learning – These systems are inspired by the workings of the human brain. We learn through a network of nerves and thought pathways. Computers are now doing the same through artificial neural networks. These networks are ‘trained’ to accurately classify data. They can now generate realistic movie CGI or help cars drive autonomously, translate text more efficiently or detect fraud in bank accounts.

Optimising search – Contextualising, optimising and narrowing search results for online buyers is crucial. AI can utilise natural language processing, visual search, and audio recognition to hone in on what customers really want. AI software can tag, organise, and search all forms of content.

CRM – Customer relationship management and targeting customers – In the past, vast tranches of customer data have been left untouched, with little ability or knowledge in how to make sense of trends, purchasing patterns, and marketing leads. Now corporations can mine these data sources efficiently for new sales leads and remarket to existing customers using AI.

Chatbots – Bots that interact with customers and sales leads are becoming mainstay interactions with shoppers, both online and on mobile devices. AI works 24/7 to provide on-brand experiences using speech and text. They can help people find the right products, make complaints, check whether goods are in stock and assist in payments.

Personalisation – The more a corporation can appeal to individual needs, the more likely a browser will become a buyer. AI can assist in promotions based on previous user activity. Recommendation engines are now powerful tools allowing people to find products more quickly.

Market insights – AI can be used effectively by sales managers, and make a difference to the bottom line. It allows more accurate forecasts of what customers are purchasing and when, and can monitor sales trends and unfulfilled leads. It can pre-empt purchases and deliver sales insight.

Inventory and product management – AI is increasingly being used to manage stock both virtually and in warehouses. In an age of instant gratification, the management of inventory and speedy delivery is paramount. AI is being used to optimise sorting mechanisms, delivery schedules and product cataloguing, as well as supply chain management.

Competitive intelligence – AI is not only being used to generate intelligence about people’s businesses, it is also being used effectively to create insight on competitors. Omnichannel commerce providers can be made aware of what competitors are doing and react in real-time. Monitoring competitors’ product mix and pricing is paramount.