The Role of Artificial Intelligence in eCommerce Logistics
The Role of Artificial Intelligence in eCommerce Logistics
Artificial Intelligence in eCommerce Logistics
Presently as the e-commerce industry is constantly setting new standards for supply chain operations across sectors, logistics companies are also seeking ways to meet the demands by employing innovative technologies. A plethora of Artificial Intelligence (AI) technologies are assisting them in this pursuit. Artificial Intelligence (AI) has the potential to revolutionise eCommerce logistics by streamlining operations, reducing costs, and improving customer satisfaction.
How is AI disrupting the logistics and eCommerce space?
AI has already changed radically how the logistics industry operates now. While you read this, businesses are being enhanced, and innovations are making huge strides to make the sector more productive. AI is transforming the way logistics is perceived as an industry, due to new approaches and advances taking place.
Predicting needs for the future and arming oneself adequately is the need of the hour. Logistics companies can now make precise predictions through the intelligent use of ‘big data.’ Big data offers immense potential and only some of it has been tapped till now.
AI has been used in real-time tracking in e-commerce companies to track their product delivery from start to end. Today, software advances mean all-day tracking is available and is expected. Efficiency is increased with the help of real-time information available at every step of the process involved in managing the supply chain management. With the help of real-time tracking, the identification of bottlenecks has become easier, and real-time reports can be generated.
Advances in E-commerce
From digital transformation and software-as-a-service to virtual reality and artificial intelligence, technology keeps pushing the limits of what e-commerce can do.
With compounding advancements in technology, there’s something new competing for online retailers’ attention every day. You’ll never find yourself at a loss for something new and different to try — the real task is identifying the best opportunities for your e-commerce business.
AI Is Bringing Change to the E-commerce Industry
Artificial intelligence isn’t just a novel technology implemented for its “cool factor.” Implementing AI has the potential to impact any number of business functions across your organisation.
To understand how it could impact your business, it helps to have an understanding of the components of artificial intelligence.
The definition of AI is broad and encompasses data mining, natural language processing, and machine learning.
- Data mining refers to the gathering of both current and historical data to inform predictions.
- Natural language processing focuses on human-computer interaction and how computers interpret natural human language.
- Machine learning concerns using a collection of algorithms to apply experience or provide examples to solve a problem. Deep learning “involves layering algorithms to gain a greater understanding of the data.”
Over the past couple of years, AI technology has matured and become a powerful tool to boost sales and optimise operations. Even many small e-commerce businesses are using technology with some kind of AI capability.
Servion Global Solutions predicted that 95% of all customer interactions will be dominated by AI by 2025. The global AI market is expected to reach $309.6 billion by 2026, at a Compound Annual Growth Rate (CAGR) of 39.7% during the forecast period.
So how can AI transform e-commerce logistics? Here are some practical AI applications in e-commerce logistics you can consider for your e-commerce business.
1. Delivery Time Prediction for E-Commerce :
One problem that e-commerce businesses often encounter in the logistics process is unreliable delivery time. Accurate delivery time predictions allow businesses to build trust with customers, thereby increasing customer retention. It also avoids complicated tracking updates to save time and effort.
LogixPlatform provides innovative first-of-its-kind logistics services, such as date of arrival predictions with the power of an AI-enabled machine learning engine. This aggregates data to provide e-commerce businesses with real-time predictions and proactive delivery updates upon checkout. As the date of arrival prediction engine improves, it can provide an accuracy of 90% to provide an accurate date of arrival.
2. More targeted marketing and advertising :
Personalization is a top priority, according to surveyed retailers, but only 15% say they’ve fully implemented personalization across channels. Stand out from the crowd with a more personalised message and have one-to-one conversations with your customers.
Advances in AI and machine learning have enabled deep personalization techniques to customise content by the user. By analysing big data from purchase histories and other customer interactions, you can zero in on what your customers really want and deliver the message that will most resonate.
3. Increased customer retention :
Delivering targeted marketing and advertising messages personalised for their customers can increase retention. McKinsey’s omnichannel personalization research indicated there’s a 10-15% uplift potential in revenue and retention from omnichannel personalization strategies.
The report reads: “A critical element of personalization is building better data and insights on customers, an asset that also generates additional value across the value chain. … Our research suggests the ROI for personalization will quickly outpace that of traditional mass marketing.”
4. Seamless automation :
The goal of automation is to accomplish a task with as little human intervention as possible. That can mean anything from scheduling emails in a CRM or marketing tool, using Zapier to automate tasks, or leveraging advanced technology to help with hiring.
In the context of future e-commerce trends, however, some of the most commonly talked about today are robotics and machine learning.
AI can play a big role in helping you automate the repetitive tasks that keep your online store functioning. With AI, you can automate things like product recommendations, loyalty discounts, low-level support, and more.
5. Efficient sales process :
Using AI can help you create a more efficient sales process by gathering data about your customers, automating follow-up abandoned cart inquiries, and more. You can help move customers through the funnel by having them engage with chatbots for simple questions.
AI Use Cases in E-commerce
There are plenty of use cases in e-commerce for AI, and you’re probably familiar with a lot of them — you just might not know that the technology they’re built on is actually related to AI. Here are six of the most common:
- Personalised product recommendations.
- Pricing optimization.
- Enhanced customer service.
- Customer segmentation.
- Smart logistics.
- Sales and demand forecasting.
- Personalised product recommendations.
It’s easier than ever to collect and process customer data about their online shopping experience. Artificial intelligence is being used to offer personalised product recommendations based on past customer behaviour and lookalike customers.
Websites that recommend items you might like based on previous purchases use machine learning to analyse your purchase history. Retailers rely on machine learning to capture data, analyse it, and use it to deliver a personalised experience, implement a marketing campaign, optimise pricing, and generate customer insights.
Over time, machine learning will require less and less involvement from data scientists for everyday types of applications in e-commerce companies.
1. Pricing optimization :
AI-enabled dynamic pricing is a strategy for changing your product price based on supply and demand. With access to the right data, today’s tools can predict when and what to discount, dynamically calculating the minimum discount necessary for the sale.
2. Enhanced customer service :
With virtual assistants and chatbot technology, you can deliver the appearance of higher-touch customer support. While these bots aren’t completely self-reliant, they can facilitate simple transactions, leaving live support agents able to focus on more complex issues.
Virtual agents also have the advantage of being available 24/7, so low-level questions and issues can be addressed at any time of day, without making your customer wait.
3. Customer segmentation :
Access to more business and customer data and processing power is enabling e-commerce operators to understand their customers and identify new trends better than ever.
In an insight from Accenture, they write, “AI systems can explore highly complex and varied options for customer engagement very quickly, and continuously optimise their performance as more data becomes available. This means marketers can set parameters and allow the AI to optimise and learn to achieve precision.”
4. Smart logistics :
According to a report from Emerging Tech Brew, “Machine learning’s predictive powers shine in logistics, helping to forecast transit times, demand levels, and shipment delays.”
Smart logistics or intelligent logistics, is all about using real-time information through sensors, RFID tags, and the like, for inventory management and to better forecast demand. Machine learning systems become smarter over time to build better predictions for their supply chain and logistics functions.
5. Sales and demand forecasting :
Particularly in a world during and after COVID-19, you’ll want to plan your inventory on both real-time and historical data. Artificial intelligence can help you do just that. A recent McKinsey report suggests that investment in real-time customer analytics will continue to be important to monitor and react to shifts in consumer demand that can be harnessed for price optimization or targeted marketing.
AI is changing the game for E-commerce
The potential of AI technologies in e-commerce logistics is boundless. Apart from increasing business efficiencies, the power of data in AI also empowers e-commerce businesses to make more informed business decisions. In the future, we look forward to witnessing the growth of more AI companies and how they can elevate the customer e-commerce journey.
Overall, the use of AI in eCommerce logistics can help businesses reduce costs, improve efficiency, and provide a better customer experience. As AI technologies continue to evolve, we can expect to see even more advanced applications in the eCommerce logistics space.
Tomorrow’s AI sounds like it’s straight from the movies, but there’s plenty of AI technology today that may look less glamorous improving customer experience, increasing conversion rates, and helping to streamline the way the business is run.
If you want to deliver the best possible shopping experience on your e-commerce website, look into the various benefits of artificial intelligence and machine learning. It can help you make better use of your customer and business data to set a plan for your future that will work.
Consumer expectations have dramatically shifted and eCommerce has become extremely competitive with the emergence of new models of delivering products and goods. Deliver on time, every time with the most advanced delivery solutions for eCommerce.
Contact us for more information. Logix Platform is your one stop for managing orders, integrating carriers and automating last mile deliveries at the click of a button.