AI In Ecommerce – A Curve Ball For Online Retail

By Mehreen Siddiqua , Jun 12 2017

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We have witnessed in the past few years how the digital age brought the physical world closer to everyone. Ecommerce industry was born at the term of the 20th century, and while still in its infancy, made tremendous progress. It’s worth noting that the early adopters of ecommerce were not driven by economies of scale or reduced cost but by convenience. This is exactly why Artificial Intelligence will get acceptance in ecommerce. AI will not only transform buyer-seller interactions but also present certain challenges that would keep pilling faster than they are solved.

Before highlighting those challenges, let’s understand key differences in ecommerce.

How Ecommerce Changed The Buyers’ Mindset

As opposed to the retail shopping experience an average customer in ecommerce has a shorter attention span.

The customer is not on ecommerce platform with an intent to purchase every time.

A new phenomenon of shopping cart abandonment started with ecommerce.

A major part of customer care starts after the order is placed as opposed to brick and mortar model

Those were some of the basics about an average shopper that uses ecommerce but the industry has to adapt to the challenges faced after applying Artificial Intelligence algorithms to predict consumer buying patterns. Here’s a possible layout explaining the impact of AI in Ecommerce, particularly in the context of algorithmic trading software.

Visitor browses e-commerce website

Let’s understand the potential problems posed by AI in ecommerce.

Trained Personnel Shortfall

McKinsey estimates that next year the number of data science jobs in the U. S. will reach a half million, but there will be fewer than 200,000 data scientists available. Globally, demand for data scientists is projected to exceed supply by more than 50%. Besides that businesses will need other trained professionals who could design or provide useful aide in creating efficient algorithms for the company. If Artificial Intelligence is set to move out of the test sphere to the practical world, it’s important that the world prepares for it.

However we are expecting a shortfall of scientists and engineers for the job. This could not only limit the growth of AI across various platforms but its ineffective implementation can have bizarre consequences.

Image Source: Freepik

Humans May Become Replaceable

By humans we would like to narrow down to customer service agents who are likely to get replaced in the near future. For now it’s possible to communicate with brands and companies through chat where human CSRs are employed. For instance the Dutch airline KLM’s account on messenger is hosted by humans but chat bots with Artificial Intelligence is soon going to automate customer conversations through AI chat bots. It’s indeed a lucrative offer for brands or companies who wish to save money they would otherwise be spending on human agents.

Image Source: Freepik

Many businesses have been hiring software makers to help keep up with the trend by creating bots. Chat bots may not immediately threaten various jobs but the ones where humans are likely going to be replaced are personal assistants, fast food servers, and social media manager to name a few.

“Thirty years later, the Time magazine cover for the best CEO of the year very likely will be a robot,”

Jack Ma – Founder of Alibaba

Virtual Assistants Lack Personalization

A feature that is under experimentation and is currently added to the ecommerce platforms is virtual assistants. It is a highly intelligent recommendation system which will be specialized, personalized, thorough, preemptive, highly intelligent that have also started to appear in the form of dedicated physical appliances.

So far, collaborative filtering has helped for reasonably popular products that are not driven by personal needs but for the long tail discovery and recommendations. It doesn’t provide the accuracy that’s needed. AI picks up where collaborative filtering left off and can find, recommend and help people discover products based on their past data driven from multiple data sources. However, it will lack personalization that we get from human interaction.

Virtual Assistants lack personalization
Image Source: Ultimate Comic Con

Security Concern Raised By Experts

If normal people including buyers and ecommerce owners are weary of AI, we can say it is just a fear of unknown but when Stephen Hawking, Elon Musk, Steve Wozniak, Bill Gates, step up to express concerns, then we should better listen. The idea of AI turning conscious is ludicrous but it can certainly turn competent, with goals misaligned with ours. Before AI gets integrated into the ecommerce for effective results, some reservations must be addressed. Artificial Intelligence can be used to create and control cyber weapons as well which can bring the ecommerce industry to its knees. Some internet users can users deploy ransom ware attacks or perform video or audio eavesdropping using Artificial intelligence.

“AI-driven technologies that look for internet vulnerabilities may be coming.”

Tomer Weingarten, CEO of security firm SentinelOne

Customer Care And User Experience Under AI Is Ambiguous

A brand can sustain itself on excellent customer care and smooth user experience. Predictive analysis and AL based algorithms will enable the ecommerce sector to provide customer service but to match the human level of customer care will be a real challenge. Also the companies will have to create a human-centric experience between man and machine that builds efficacy, trust, and an emotional bond.

Cogito is quite possibly one of the most powerful examples of behavioral adaptation to improve the emotional intelligence of customer support representatives that exists on the market today. The company is a fusion of machine learning and behavioral science to improve the customer interaction for phone professionals. The auto response systems can appear intelligent and can handle customer service requests in a speedy manner but it will always lack the warmth and care of a customer service rep. more glitches and shortfall of an AI based customer response would unfold in the near future.

Customer care
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My spirit lies in the distant past that I never saw with my own eyes but wish to reveal it to the world there is wisdom in the old adage. My heart lies in a future that is filled with imaginative art, technological advancements and scientific discovery in tomorrow-land. In my present, I want to bring about positive change through simple innovative ideas for businesses, brands, visual graphic designers and the world community at large.


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