Ecommerce Boom driven by AI, Analytics & Tech

Posted in Marketing & Strategy Articles, Total Reads: 239 , Published on 09 July 2018
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E-commerce, a term which has made its presence felt in really short span of time, is an act of performing the commercial activities of selling and purchasing through technology over the internet. E-commerce industry has grown manifolds during last decade because of large penetration of internet, smartphones, strong network and increasing consumer wealth. 71% of the total number of shoppers worldwide in 2017, believe they would grab a better deal online with a better overall experience compared to shopping in high street stores.

According to Statista, an online statistics market research and business intelligence portal, “In 2017, retail e-commerce sales worldwide amounted to 2.3 trillion US dollars and e-retail revenues are projected to grow to 4.88 trillion US dollars in 2021”. This will mean a cumulative growth of 246.15% growth from 2014 ($1.3 trillion) with China leading the charts, as one of the largest E-Commerce market, followed by US and UK. With technology driving the whole industry, this highly correlates the growth of industry with technological advancements. Operations of an e-commerce industry depends heavily on the technology whether be it the business platform (website and its graphics), online payment (electronic funds transfer), customized user experience through big data, customer relationship management through AI bots and so on. Continuous development in the area of technology, data analytics, and artificial intelligence makes the e-commerce business, not just a dynamic continuous line of work but also tries to make it a better experience altogether for the customers and sellers in the E-commerce market


Image: pixabay


Data as fuel to the growth:

Technology has given a clear edge to boost the e-commerce industry in the past few years and allowed the leaders in the industry and its marketers to gain a comparative advantage over the brick-and-mortar businesses. This has been possible through efficient and effective use of the advancements in Data Analytics and Big data. Collecting data has become easier with advent of e-commerce, social media and web-browsing which collectively being called big data; and this data is extensively used by marketers to predict trends regarding customer preferences by tracking their online browsing pattern, their choices, their views, and their preferences which constitutes data analytics. This can get them a fair idea of customers’ inclination towards certain products. Also, this data can be used to optimize the pricing according to the past buying behavior, needs and preferences of the customer. All this can help the businesses to target the right audiences at the right time at the right place.


Amazon, one of the e-commerce giants uses Hadoop, a native analytics platform for curating and analyzing data. Amazon is known for providing a customized homepage on their application and website to each customer that lands on it. The past searches and buying behavior of every customer is used to provide them with a better and bigger range of products to choose from. This helps Amazon to provide customers with a unique shopping experience and gain an edge over its competitors.


Forecasting the demand has always been one of the key issues for businesses, which can now be easily handled with predictive analysis determining the factors affecting the demand for a particular product. Merck, the globally-known biopharmaceutical company has been efficacious in using the power of AI in forecasting the demand, adjusting the supply chain and ordering quantities accordingly. Geographical and demographical data is also of great use when it comes to determine local taste and preferences along with customization according to the demographic attributes such as age, gender, occupation, education level, income level etc. All this data, is gold to the marketers as it helps to perform coherent market segmentation and targeting the right audience. This can change the marketing scenario from B2C and B2B to B2I i.e., Business to Individuals. Artificial intelligence is providing a medium to ensure brand loyalty and consumer satisfaction through handling customer relationship via chatbots, one of the most popular product of artificial intelligence and making the changes in Customer relationship management allowing the companies to use them and have a competitive advantage. According to Oracle, almost 80% of the businesses want chatbots by 2020. Not just this, the tool is expected to cut the business cost by $8 billion by 2022.Chatbots have changed the way one looks at customer support. Not only text, but these chatbots can recognize voice and interpret it through natural language processing algorithms. This makes them more desired by the modern marketers and big e-commerce players.


Flipkart, another giant in the e-commerce industry created a bot under Project Mira which could talk to the shoppers while they are shopping. Being a programmed software, it provides easy, continuous, intelligent and more personalized 24*7 customer service which tends to make the whole consumer-business interaction experience better. Apparently, the biggest challenge that has been with conducting e-commerce was to make it more of a realistic experience for the buyers as nothing is present in the physical form in front of them before making any purchase decision. However, technology has brought up the solution to this in the form of VR and AR. Usage of this technology can make the process more experiential with positively affecting the user engagement with the product and hence with the brand. It has been predicted that the VR will alone grow to be a $4 billion industry by the end of 2018. Incorporating VR could make the whole shopping experience more immersive in the e-commerce sector and help the companies overcome the biggest disadvantage of lack of physical touch. For instance, IKEA the Swedish multinational which has sold furniture for years in brick-and-mortar shops has now used the augmented reality in a way that could help the company to grow bigger in no time. The customers, instead of going to the shop can open the application on their smartphones and choose and place the furniture wherever they envision it inside their house. This makes their shopping experience more realistic and engaging.

 

This article has been authored by by Nikhil Puri and Grisha Dhingra from Sri Ram College Of Commerce (MBA)


References -

https://digiday.com/marketing/ikea-using-augmented-reality/

https://chatbotsmagazine.com/how-ai-powered-enterprise-chatbot-platforms-are-transforming-the-future-of-work-dceed4cdfe50

https://medium.com/@Aera_Technology/ai-and-the-evolution-of-demand-forecasting-147dd4e783aa

https://economictimes.indiatimes.com/small-biz/startups/flipkart-working-to-make-buying-online-more-like-shopping-at-a-brick-and-mortar-store/articleshow/58055658.cms


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