It is forecasted that, by 2020, customers will manage 85 percent of their relationship with the enterprise without interacting with a human, according to Gartner. This is possible due to impressive advances made in machine learning in the past 4-5 years. Also, this happens due to increasing need and desire of businesses to understand and act on large amounts of customer-related data in real-time as they build data-driven business infrastructures.
Machine learning is an iterative process where computers and computer algorithms learn from and are able to independently adapt to previous computations and data they encounter. Machine learning is used to understand vast amounts of data, human behavior, speech, patterns, and to garner data-driven insights.
Machine learning can be used by e-commerce businesses to better understand customers in real-time and for extended periods, so that businesses can optimize and automate their e-commerce systems and experiences. It will increase the conversion rates and customer satisfaction ratings.
Here are some of the benefits that e-commerce business gain by machine learning implementation.
- Make better decisions for entire business
Machine learning algorithms can be integrated with your different databases and systems to help your e-commerce business:
i. Predict the overall demand and sentiment for your products
ii. Detect potential problems with your inventory
iii.Categorize and organize your products and identify keywords
iv. Manage well-targeted and effective marketing campaigns
v. Estimate shipping and packing costs for your products
vi. Refine your customer segmentation and sales funnels
vii. Determine causes of customer churn and abandoned carts
When implementing machine learning, your entire business will have access to easy-to-understand data insights that encourage better decision making across different databases and departments. Each departmentâ??from product development to sales to order fulfillment to customer serviceâ??will be able to make better decisions that impact your business.
- Stimulate improved product searches and recommendations
With machine learning, you'll be able to improve your customers' product searches and recommendations on your e-commerce site. When a customer enters something into a search box enhanced via machine learning on your e-commerce site, they'll receive targeted results based on their behavior and activity on your site, instead of routine results that automatically pop up. The site will essentially learn what the customer means and wants to see when they type something into your search box, rather than only yield results based on the exact words they type alone. Customers will also be shown product recommendations based on their activity and behavior on your e-commerce site, which is as step beyond simply recognizing their previous purchasing history. And, this use of real-time and realistic product recommendations leads to more conversions and sales, as customers are being shown what they're really interested in seeing and buying.
- Use customer service chatbots
Chatbots use machine learning to learn how customers talk, so that they can respond to them via chat windows on a website or through text messaging apps. Oftentimes chatbots can immediately help customers without customers having to call and wait to speak with someone or wait for an email reply. Chatbots are becoming sophisticated enough to handle most customer complaints and concerns, as well as answer common questions regarding how to navigate an e-commerce site and where to find shipping and return policies. Some online businesses are even leveraging chatbots enhanced with machine learning to take orders and collect payments, to make the overall shopping and purchasing process seamless and easy.
- Benefit from real time and dynamic market pricing
To maximize your e-commerce business's profits, you'll want to leverage machine learning to determine the perfect pricing amounts and models for all your products. With machine learning, you'll be able to compare your products' prices to overall market trends and pricing, as well as product demand and customer behavior. All this data and information pieced together will tell you what customers are willing to pay for your products at any given time. You'll also be able to better understand when to host a sale on your e-commerce site and what type of discounts and bargains your customers are looking for and will be likely to respond to, while increasing your conversions and customer satisfaction ratings.
- Implement enhanced fraud detection and prevention
Right now, mostly enterprises are using machine learning for enhanced fraud detection and prevention. But, as more and more e-commerce platforms are being built for businesses of all sizes each month, this use of machine learning will really start to take off and become less expensive for smaller e-commerce businesses to implement. This implementation of machine learning will allow you to locate fraud patterns in different customer bases for your business and will be able to predict when an instance of fraud may occur. Your system will learn things like when stolen credit cards are being used, or when customers wrongly retract credit card payments after they received an item they're not returning.
Leveraging machine learning for e-commerce business increases conversions and customer satisfaction, and helps businesses to stay competitive.