AI in Retail – What is Artificial Intelligence and How Can It Be Used for eCommerce Growth?
February 20, 2019
AI – artificial intelligence – is the catch-all term used to describe machines that can think for themselves with a certain degree of intelligence – reacting, in some cases, like humans. These systems exhibit behaviour including planning, learning, reasoning, problem solving, knowledge representation, and perception.
Any computer program can be deemed AI if it does something that we would normally think of as intelligence in humans. However, many technological applications labelled as AI are in fact just examples of clever software.
What is AI?
A lack of understanding is partly to blame for the slow uptake of AI technology – it’s become a catch-all phrase often mocked as a gimmick or marketing term. Yet it is increasingly being used to create effective and legitimate business tools, and it’s worth having clarity on the complex terminology:
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.
AI in eCommerce
AI is increasingly shaping the buying and selling experience for both shoppers and sellers. It is adding both intelligence and personalisation to the way we purchase and trade goods and services.
Customer experience will be the most significant beneficiary of developments in AI. Consumer adoption of the technology will be a key driver for its success, with personalisation a catalyst to winning over buyers. By 2020, the average person will have more conversations with AI-powered bots than with their partner, according to Gartner.