How artificial intelligence and machine learning are revolutionising eCommerce experience?

By : |February 11, 2020 0

Technology has drastically transformed our purchase experience. We’ve come a long way from walking into a store, strolling down the aisles, reading the labels, picking out a product and paying at the counter to visiting a website or app, searching for what we need, adding it to the cart and checking out. We no longer need to leave the comfort of our homes; retail is at our fingertips.

Commerce has evolved to eCommerce, and the ‘e’ stands for more than ‘electronic’. It’s more about ‘easy’ now. It is easier to find the products you desire, compare across brands, purchase them and get them delivered on time. But, ever wondered what happens behind the scenes to create this seamless and ‘easy’ experience?

Imagine if a retailer needs to sell a simple, black office chair. The retailer will first have to describe the product. And what keywords are people using to search a black office chair? Some might just want a black office chair, and some would prefer one with ergonomic features.

The task before the retailer is to describe the product in the best possible way, listing all the possible features. Not just that, the retailer is also competing with other retailers to sell a similar product and price it optimally to scale its sales. Getting in all these details and more, manually, can be daunting. Imagine having to do this for millions of SKUs – every day!

Consequently, retailers are increasingly turning to technology-enabled artificial intelligence (AI) and machine learning (ML) solutions to streamline inventory management and provide a seamless eCommerce experience. Here are some areas where this trend is pronounced:

a) Product set-up

A leading retailer was facing flak from loyal customers for having a very sparse inventory online. They needed to list their products onto their eCommerce platform quickly. Their problem was further complicated by the fact that 70% of their products were private label, so going to competitor websites to get the information was not really an option. Moreover, they had no digital content experience either.

To counter this, algorithms were used to generate creative descriptions of each product via optical character recognition (OCR) and image processing. With this artificial-intelligence (AI)-enabled solution and natural language processing (NLP), automated product descriptions were generated. This reduced the time spent on this task and the retailer was able to reclaim lost online sales worth $6.9 mn, annually.

b) Product matching

Customers are always looking for a better deal – especially online. Retailers need to stay at their competitive best to ensure the sale of their products. They need to have the right product at the right price, and offer the right experience. At this point, matching products correctly across their own inventory and that of their competitors’ is the key.

Unfortunately, eCommerce does not yet have standardised nomenclature, which makes it difficult to compare products across platforms. Manually, it’s time consuming but machines can help.

Machine learning loaded with developed algorithms use the name and descriptions of the products to match them. More recent developments use computer vision to look at the product images to compare the retailer and competitor product to match them.

Algorithms are also used to read the text on the product and its label to extract similar attributes of retailer products and the competitors’, enabling categorisation. These insights help retailers place and price the product strategically to gain margins on the sale.

In case of a large distributor of toys, this shift from gut-based to data-driven decision-making resulted in a 13% increase in margins.

The revolution of eCommerce will continue, fuelled by technology and AI-enabled solutions. Futuristic eCommerce experiences like digital assistants, drone delivery, geotargeting and more, are some indicators of what is to come. One thing is certain – customers will enjoy the luxury of choice, right from the discovery of products to its delivery. The question though is – Do myriad choices offer ease or add complexity to one’s shopping experience?

   Sunil Mirani, Co-Founder and CEO, Ugam, a Merkle company

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