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Artificial Intelligence in Cross-Border E-Commerce

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AI Cross-border E-Commerce

Unsplash/Igor Miske

The awareness of the potential of artificial-intelligent systems is growing. For instance, companies operating in cross-border e-commerce are increasingly identifying  opportuninites that intelligent algorithms will offer for their businesses in the future. We give you an overview of the most important application areas.

Even though an autonomous and fully self-learning system in e-commerce is not reality yet, the opportunities created by the use of new technologies are immense and will significantly change international trade.

Big Data – collecting and using data

With the help of modern tracking tools, it is already possible to seamlessly monitor user behavior on a website or in an online shop. How and from which sources did the user access the site? Which products is he interested in? Is it an existing customer or a (potential) new customer? How does the user react to offers and/or advertising? These are all important questions, and thanks to AI, companies can unlock an immense potential by answering them. As  databases are growing and actively being used, the knowledge about (future) customers is getting more accurate. As a result, companies increasingly find themselves in a position to respond even better to the needs and wishes of their website users.

Personalization of the shopping experience

The personalization of the shopping experience will become the central challenge for many e-commerce companies in the years to come. Only those who manage to offer their customers a perfect shopping experience on- and offline will be able to succeed in the market in the long term.

But what measures need to be taken? Analogous to stationary retail, companies should address their customers individually and show their appreciation, e.g. in the form of tailor-made offers. A case study by the global electronics mail order company computerunivers in cooperation with the German consulting firm konversionsKRAFT has shown that sales can increase by as much as 18.2 percent with the help of real-time typification and a corresponding address.

Tailor-made product recommendations

In the future of global e-commerce, individualized communication will therefore become an increasingly critical factor for success. With the help of AI, companies can evaluate the data collected on the website and broadcast tailor-made product recommendations to website visitors in real time. Depending on what the user has been looking for, from which page or via which search keyword he was directed to the website, AI  can offer him suitable products within seconds.  If, for example, the user has searched for jeans jackets in a price range between 70 and 100 euros in the past, corresponding products can be suggested to him automatically.

When using AI, however, not only the time factor is decisive. In addition, the algorithms can learn and develop their predictions continuously and autonomously. The algorithm registers whether it was successful with its recommendation or not and adjusts future actions accordingly.

Of course, substantiated product recommendations are also possible without AI. However, the hit rate when using AI is significantly higher compared to that of personalized recommendations without the use of intelligent technology.

AI enables individualized landing pages

With the help of the data collected, not only product recommendations can be individually adapted. Thanks to AI, entire landing pages and product pages can be generated or individualized automatically and in real time for users. This is particularly interesting for websites with an international audience. If a customer from France visits your online shop, AI content can be displayed directly in the French language and in the appropriate design.

The European industry giant Zalando is already working quite similarly. The online mail order company stores the data of your last visit and identifies you as a man or woman on the basis of your first product choice. This enables Zalando to personalize the home page for you and offer you suitable products that match your shopping history. About You, a subsidiary of the Otto Group, has a similar approach. The mail order company offers its customers a personalized shopping experience as well and refers to itself as “Europe’s most personal online shop”.

Predicting purchasing decisions with algorithms

Ideally, AI is able to capture patterns in customer behavior and predict purchase decisions accordingly. For example, algorithms capture if a customer buys underwear every year before Valentine’s Day or decorations for a children’s birthday party at the beginning of May. If this pattern is recognized, conclusions can be drawn and individualized marketing campaigns can be initiated. Even before the customer starts his annual search, the company could recommend new, suitable products (e.g. by e-mail) and thus increase the conversion rate and turnover. These detailed forecasts can be applied along the entire customer journey (i.e. the purchase decision process) and thus contribute significantly to customer acquisition and customer loyalty campaigns.

Individualization in E-Commerce and Data Protection

Even though some of the processes mentioned above, such as pro-actively addressing customers by e-mail, require direct access to the customer, users should remain anonymous until they log in, despite the storage and use of the data. The online shop provides just one out of many points of contact.

Nevertheless, companies should encourage their customers to log in early by using so-called login layers. In the case of computerunivers, this approach was quite successful. For example, 23.8 percent more customers logged into their accounts prior to accessing the shopping cart than before. This gave the electronic retailer more opportunities for personalization and thus allowed them a greater influence on users’ purchasing decisions.

The Basics: Digital Transformation and Big Data

Many of the described scenarios of using AI in e-commerce can also be implemented with various individual software solutions. The advantage of AI, however, is the possibility to control all processes centrally and in real time. After all, software solutions require people to act in the background. With AI, many processes are controlled autonomously and in a self-learning manner. The current technology is so transparent that companies can still see which assumptions and filters the AI applications are working with.

The basis for the successful use of AI in e-commerce, in addition to a successfully implemented digitization, is the existence of a sufficiently large amount of data based on which AI can make decisions.

Conclusion

In order to hold their own in the face of growing competitive pressure in international e-commerce, companies must be able to offer their customers genuine added value in the future. An individual approach or a personalized shopping experience will play an important role that should not be underestimated. It can be assumed that in future, an increasing number of companies will be using the constantly evolving AI applications to optimize their performance in order to stand out positively from the competition in the longterm. Therefore companies should already examine how they can use the potential of AI for their processes.

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