Artificial intelligence (AI) may be mankind's most astonishing creation to date. With its growing presence, its applications have permeated every aspect of society, commerce and even governance.
From the smartphones we carry in our pockets to the banks where we store our money, various aspects of our daily lives are managed and optimized by AI.
But the most successful applications of AI and machine learning have been recognized and utilized in the field of e-commerce. The e-commerce market currently controls a global retail sales share of 14% and is set to become the largest retail channel by 2021. With its booming market, online entrepreneurs are investing millions in digital marketing to build a robust digital footprint, increase their online exposure and generate more revenue. With AI's innumerable benefits now in the picture, it becomes imperative for online entrepreneurs to leverage its powerful applications and maximize efficiency in their online business strategies.
AI is now an essential ingredient in every startup's marketing mix, capable of decreasing business operation costs, delivering improved customer experience and streamlining your marketing tasks. But how exactly can online entrepreneurs use it in their digital marketing strategies?
1. Content curation and search optimization
Content has always been one of the deciding factors in any successful marketing model. Thanks to AI, content can not only be created but also curated according to the targeted customer segment. AI applications have helped online entrepreneurs develop better-performing content, allowing them to reach the right audience with more enticing propositions. With AI, online entrepreneurs have increased the accuracy of their marketing campaigns by eliminating the guesswork human staff had to do. Most AI algorithms use data on user habits, buying behaviors and interactional patterns to select the target customer's areas of interest before presenting them with relevant recommendations. By bringing user-selective content to the customer's search log, AI exponentially raises the probability of conversions.
Netflix, one of the world's biggest media service providers, also uses AI to suggest video content to its subscribers. Eighty percent of what is watched on Netflix is due to an AI recommender.
2. Chatbots and data learning
Chatbots are another key addition to the digital marketing toolbox. With the late intervention of AI, chatbots have a more significant role than ever, offering marketers unmanned customer support services that increase engagement, reduce business costs and improve sales.
Chatbots help online stores run 24/7 customer service, providing answers to basic inquiries in real time, generating unique content for emails, tracking customer behaviors and providing product recommendations. Through artificial intelligence and machine learning, chatbots are now capable of giving humanlike replies to complex queries and using natural learning processing to analyze keywords and influence buying decisions in customers.
Starbucks, one of the biggest names in coffee, uses an AI chatbot for its Facebook Messenger to take complex orders from customers. According to an infographic compiled by FME, chatbots will help save $8 billion in business costs by 2022.
3. Voice search and virtual assistants
Voice-empowered shopping is one of the most discussed technology trends of the last few years. According to PR Newswire, voice shopping is set to increase 20 times over and reach the $40 billion mark by 2022. Currently, an overwhelming majority of online customers use voice search to look up businesses, search products and communicate with brands. Against tradition's textual input methods, voice search has gained significant popularity thanks to its integration with powerful AI virtual assistants such as Google, Alexa, Siri and Cortana. According to Gartner, the year 2020 will experience 30% of all web-browsing sessions without a screen.
Its rising trends have also complemented the growing use of VPA-enabled speakers in homes to perform voice commands for different types of home appliances. Therefore, optimizing your content with voice search is crucial for maintaining a competitive edge in the market and making your online business futureproof.
4. Predictive analytics and sales forecasting
One of the biggest advantages of AI in digital marketing is its ability to predict customer behaviors and forecast sales. Using predictive analytics, AI combines data mining, statistics and sales modeling to predict future outcomes for online businesses. Moreover, with the rise of machine learning and big data, possibilities have further diversified for digital marketers, who can measure their activities more accurately and focus on specific areas in their digital strategies.
For example, predictive modeling has shown impressive results in customer segmentation, using AI to segment target groups that belong to multiple variables. Similarly, predictive analysis has helped online entrepreneurs score leads with better maturation, nurture their campaigns from demographics and behavioral data, and increase their bottom lines with upselling and cross-selling, while allowing detailed research on customer preferences.
Walmart, the American multinational retail giant, observed 10% to 15% increment in online sales for $1 billion using AI sales prediction.
5. User experience and personalization
A good user experience is a defining metric of any successful digital marketing model. Since every online customer seeks a seamless user experience when they interact with an online store, many online entrepreneurs focus on providing tailored UX for their customers to increase conversion potential. However, with a highly diverse online community divided into regional preferences, identifying customer types becomes a challenging task for marketers. With AI algorithms, marketers can personalize their store outlooks for different customer groups, using AI for geolocation and behavior tracking to offer preferential user experience on their stores. This not only self-optimizes the website but improves the store's conversion rate optimization (CRO) and generates a solid brand identity in the market.
A 2017 Evergage survey on personalization in real time showed that 33% of the marketers surveyed used AI to provide personalized web experiences.
With AI's precedence widely acknowledged among online entrepreneurs and corporations, it's also had its fair share of controversy and skepticism in the tech world. But AI is far from causing any life-threatening events at the moment, while its benefits in e-commerce are irrefutable and must be implemented for online businesses to achieve better productivity. By adding these five key AI applications to your digital marketing model, you can not only increase the productivity of your online venture, but largely influence the choices of your customers in online shopping as well.