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How is Machine Learning Transforming the eCommerce Industry?

(Source: gridinfocom)

If you have been active on social media or purchase products from online eCommerce websites, then you must have noticed this thing. Whenever you search for some products online or purchase from one site, suddenly you’ll be getting the ads for that product or website.

Let’s clear something up right away: you’re not the only one because everybody has been getting these ads.

It also happens that you purchase something and get ads for something that might go well with the product. For example, you ordered shampoo and now you are seeing ads for hair oil or body wash.

How does this happen? Does someone sit and keep a watch on what page you are visiting and then customizes the ads for you? Not really.

With the emergence of artificial intelligence, machine learning and big data started playing a big role. These are in many industries such as healthcare, finance, automotive, government agencies, transportation, and retail. It is used in several ways to help consumers make the right choice while buying something, be it online or offline.

But first, let’s see how machine learning really works.

What is machine learning?

(Source: becominghuman)

Machine learning is when you create a program that helps a computer to understand data. Then, you feed the data to the computer and it analyzes, sorts and understands the data on its own. The thing about machine learning is that it keeps learning as new data is added.

There are several algorithms which are used in machine learning, all of them are listed below:

  1. A supervised machine learning algorithm

  2. An unsupervised machine learning algorithm

  3. A semi-supervised machine learning algorithm

  4. Reinforcement machine learning algorithm

Using these algorithms, we are able to analyze large amounts of data very easily, quickly and in a much better way than humans can. Due to this, many people have been voicing their fears and saying that artificial intelligence will steal their jobs. That’s far from reality. In fact, the increased speed of processing data actually helps us make better decisions and makes our work easier and more accurate.

Machine learning also helps us identify probable risks and find unidentified opportunities that could be profitable. It definitely requires additional time to train it properly at first so that the learning process is smoother and more accurate.

Now that you are more acquainted with the topic, let’s take a look at some of the major breakthroughs in the eCommerce industry using machine learning.

How is machine learning transforming the eCommerce industry?

1. Search engine optimization:

(Source: horizonmarketing)

According to a report from 2018, 4 in 5 customers use a search engine when shopping online. As the number of products in the eCommerce websites keeps going up, it is important that the search results are accurate and helpful for the users.

Machine learning can help in several ways to users such as search query predictions, sorting search suggestions as per the history, and putting extra focus on image and voice search. With this data-driven process, we can accurately determine what the users are looking for if we use machine learning.

2. Optimized results:

With machine learning in eCommerce sites, we can sort the search results page in a variety of ways. It could be as per the product category, relevance, sorted by price or featured. The relevancy of the products could be decided by using information from the user’s search engine, search history, order history, and profile information. Results that utilize a user’s data to procure optimized results have better chances of converting into sales rather than randomly generated results.

3. Inventory management:

Machine learning can help eCommerce store with the inventory management of all the products listed on the website. This is a very useful feature of ML in eCommerce because the more the number of products listed, the difficult it becomes to keep stock.

By understanding the sales reports and looking at the number of products left in the warehouse, it can help you determine which products need replenishment and which are still well-stocked.

4. Trend analysis:

It would be weird buying Christmas lights in May, wouldn’t it? ML in eCommerce studies customer behavior and predicts the wave of sales of products. Hence, it can analyze behavior and trends to understand which products will sell more during a particular time.

5. Better marketing strategy:

With predictions and trend analysis, it becomes much easier to understand what products are being sold more and when. Using ML in eCommerce can help you understand the mindset of your consumers better. If you tried to analyze all the data manually, it will not be as effective. Hence, this data and analysis can play an important role in your marketing strategies which can result in a growth in the number of sales.

6. Dynamic pricing:

Have you noticed that if you add a product to your cart and don’t place the order, then the price of the product drops after some time? (If you didn’t know this before, now you know how to get some extra discount!) This isn’t done manually but with the help of machine learning only. By keeping a track of all products, the algorithm specifically keeps changing the prices of all the products for users. This allows them to determine the best price for all the products and suggest. While displaying discounts, an optimal price and giving offers to customers, the ML algorithm also takes care of the warehouse inventory. This is done specifically to maximize the sales and keep a track of the inventory.

The Final Say

Machine learning in eCommerce helps add a new layer of depth that helps companies get the most from their online store. Based on these insights, eCommerce company owners can easily make better decisions, maximize their sales, market their company efficiently and understand the demands of their customers too. Since machine learning algorithms and use cases keep on learning to improve accuracy, there will be many more ways in which it will benefit the eCommerce industry. Therefore, the future of the eCommerce industry is very advanced and highly prosperous.

Pradeep Makhija is a Digital Marketing Executive at Space-O Technologies, an android app development company. He likes to share his knowledge and experience with people around by writing articles related to mobile apps & new technology. In his spare time, Pradeep likes to explore and read more about the trends and needs of a mobile app in different sectors.

Written By

This is Pradeep Makhija, Marketing Executive at Space-O Technologies. I do participate in various online threads to share my knowledge regarding mobile app development and startups.

1 Comment

1 Comment

  1. Jill Everson

    March 16, 2020 at 5:12 am

    Machine learning is something we should all make use of… thanks for sharing 🙂

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