The e-commerce industry is now one of the biggest markets in the world. To put things into perspective, global retail e-commerce sales are expected to hit $4.8 trillion by the year 2021 according to Statista.
On the other hand, Frost & Sullivan estimate that B2B e-commerce sales will cross the $12 trillion market by the year 2020. Yet, based on technological advancements, the current estimates are barely a scratch on the gigantic opportunity that this market presents.
The e-commerce market has made shopping easier but it still faces some serious challenges that could be alleviated with the help of disruptive technologies like Artificial Intelligence (AI).
Intelligent search and product customization
One of the drawbacks of online stores is that when you visit their websites, the products that pop-up on the screen are not always the things that you were looking for. In most cases, trending products or those that are being promoted appear first. However, that is now beginning to change with the launch of Twiggle, a software that equips e-commerce platforms with the ability to think like a human being. Twiggle is an AI-powered technology that mimics human behavior to deliver more accurate search results to online shoppers at incredible speeds. With Twiggle, customers are likely to see the most relevant products according to their search history when they visit online retail platforms.
Intelligence e-commerce search has also attracted companies that look to leverage other content-types to speed up the process of online shopping. The US-based Clarifai is one of the top players in this space. The company has narrowed down towards building customer-focused experiences by leveraging video and image recognition technologies to provide application developers with software that can build smart e-commerce apps. Clarifai’s technology uses AI and machine learning to automatically tag, organize and visually search content by recognizing features of the image or video.
One great example is Pinterest’s updated Chrome extension, which allows people to ask Pinterest (NYSE:PINS) to display items related to any photo they select online using its intuitive image recognition software.
One benefit of this is that users do not have to type in product descriptions for a list of related items to be displayed. The image search feature speeds up the product search process, which in turn can lead to increased sales for the online retailer. Customers can also find complementary products based on size, color, brand, and material among others. This allows online shoppers to virtually search and compare products without having to type any data into the platform.
AI is becoming an integral player in online retail such that the need to visit physical stores to sample products physically is diminishing. Even products that most people would rather try them physically before buying can now be designed and custom-made to specifications by entering information digitally thereby eliminating the need for a physical store.
The best example, in this case, is ROSI (Rational Octahedron Selection Intelligence), which is a digital gemologist created by online jewelry retailer RockHer in partnership with IBM (NYSE:IBM) to help buyers to digitally build engagement rings from scratch to finish before buying according to their specifications. This technology ensures that customers get the right product, which limits errors thereby improving the company’s efficiency. Customers looking to purchase wedding rings can enter information about their ring size, diamond cut, clarity and among, others to come up with the perfect ring.
Facial recognition and customer retargeting
Facial recognition technology has been in the market for years now. Smartphones are the most popular gadgets with facial recognition technology, but more industries are beginning to show interest. Retailers are leveraging facial recognition technology and security cameras in stores to monitor customer behavior.
For instance, retailers can use this technology to track customer activity inside the store and then use that data to provide them with targeted offers. With this technology, retailers can determine the areas of their stores where a customer spends most of the time when they visit the store, check which products they stare at or sample the most, and then come up with targetted offers.
And with omnichannel sales and marketing becoming more popular in the retail market, some retailers could soon be integrating the data gathered when the customer visited the physical store to recommend products to the customer through other channels including e-commerce, e-mail, and application notifications via smartphones. This could improve customer experience across all channels.
Voice recognition
Another development that could significantly improve online retail is the use of intelligent voice recognition software. Most search engines have this feature already but in the e-commerce marketplace, things could get more interesting. All the top technology companies Amazon.com Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Alphabet (NASDAQ:GOOGL) Inc.’s (GOOG) Google have all invested in voice recognition software. It is already playing a huge role in driverless vehicles, and most importantly the smart home market.
As the home becomes smarter, a lot of the duties will be performed by machines that will rely on voice recognition technologies. And with nearly two-thirds of all consumer spending attributed to household goods, this means that soon, people will be using Amazon Alexa and its counterparts to order supplies online. Even better, with machine learning in place, Alexa and its rivals could become so smart that they won’t need to be told where to order groceries and foodstuffs. These systems will have learned the owner’s favorite online store for groceries, kitchenware, and toiletries among others.
AI and product deliveries
Then, of course, there is the challenge of same-day delivery. Drone technology continues to gain traction with most of its impact well received in the filmography industry. However, with AI again, product delivery drones could become smarter, which will make it easier for online retailers to gain licenses for drone use in most countries.
The same concept could also be used in delivery vans. Amazon is already experimenting with self-driving delivery vans and with AI in place, soon everything could be done without the aid of human intervention. This paints a picture of just how much more the e-commerce industry could grow in the next few years given the current estimates and expectations on the impact of AI on the market. Artificial intelligence could play a big part in that growth because it looks like it will help to solve some of the biggest challenges the online retail market faces.
Conclusion
In summary, the online retail industry is one of the fastest growing markets in the world. Some could suggest that with the likes of Amazon and Alibaba (NYSE:BABA) seemingly taking up most of what there is to share, there is not much left. However, with disruptive technologies like AI now coming into play, it looks like the market still has a lot of room to grow in the coming years.
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