The market for AI technologies is booming. In recent years, the e-commerce industry has also benefited heavily from the advances in artificial intelligence and has pushed the use of intelligent solutions for the purposes of personalized customer journeys, customized recommendations, more efficient customer service as well as dynamic pricing policy and inventory management. And these are just some of the application examples. According to an ECC Club study, B2B enterprises consider AI to be highly relevant. Thus, 76 percent of respondents agree that AI constitutes a crucial driver for the success of their business. More than two thirds (69 %) of these businesses have already implemented AI solutions.
But how does the use of artificial intelligence help online businesses become efficient and profitable? What strategies are promising and how can they generate genuine competitive advantages? We are talking to Nils Breitmann, Principal Enterprise Architect at Intershop, about the do’s and don’ts for implementing AI.
Nils, what is it that makes the use of AI successful in a company? What does the AI recipe for success have to include?
A sound strategy, effective data management, the right tools and technologies along with the focused development of digital capabilities. The combination of all these factors ensures that artificial intelligence can develop to its full potential. It’s important that companies actually take that first step and implement their first appropriate use case in which AI generates verifiable added value. To this extent, it’s not about reinventing the wheel or conducting research into the basics of AI. It involves finding intelligent ways to make optimal use of AI to achieve competitive advantages. It is advisable to use well-established software solutions that enable rapid implementation, yet are flexible enough to be expandable and individually customizable at any time. The intelligent search SPARQUE.AI, powered by Intershop, for example, uses various data sources to predict which products website visitors will need and displays these in individually arranged lists and recommendations across the entire website. The solution can be implemented within a week and is proven to increase conversion by 20 %. “AI pilot projects” such as this one enhance internal AI expertise and provide both the company and its customers with tremendous advantages.
Where are the greatest potential opportunities for AI in retail? Or is that not at all foreseeable as yet?
The development of AI technology is constantly advancing so that new application options are currently emerging and will continue to do so in the future. However, companies should start where the greatest potential for optimization lies. If, for example, sales people have great difficulty in maintaining their product data and keeping it updated because they have thousands of products featuring endless variations and technical specifications, AI can make a great contribution towards automating time-consuming manual activities. If the margins tend to be a source of distress, the subject of dynamic pricing should move to the top of the priority list. This is because AI facilitates the dynamic adjustment of prices based on factors such as demand, competition and customer behavior in order to optimize conversion rates and margins. There is already a series of intelligent solutions on the market that allow for monitoring and the automatic control of prices. On the other hand, buyer satisfaction today is almost entirely dependent on a convenient customer journey. AI can make a decisive contribution to personalizing the shopping experience for the customer, so that only relevant products and content are displayed, allowing them to quickly find what they are looking for. Pre-filled shopping carts are proving to be particularly successful in B2B online retail, and facilitate the work of shoppers, since it is not uncommon for the same products and quantities to be needed repeatedly. In short: The potential opportunities for AI in retail are diverse and depend heavily on the objectives and requirements of the individual company.
What are currently the greatest obstacles keeping German companies from purposeful use of AI? Is there a lack of awareness? Or willingness to change? Or AI expertise?
Companies have realized that artificial intelligence has arrived in the here-and-now and that it comes with enormous potential for the online business. Due to declining growth forecasts, the high costs of energy and raw materials, unstable supply chains and other economic turmoil, however, most German companies currently do not have expansive budgets for large-scale AI projects at their disposal. So, they can’t really reinvent the wheel—and don’t have to. Instead, it is advisable to use software solutions with a high degree of prefabrication, which allow for rapid implementation of first AI use cases, generation of appropriate added values and incidentally also for establishing AI competencies within the company. The important thing is that the solutions used are flexible, so that companies can later adapt these for individual requirements and AI strategies in terms of a buy-and-build strategy, Intershop offers a series of solutions that meet these requirements. This way, you can, for example, use SPARQUE.AI and the BI Data Hub to personalize search results and product recommendations or to create smart demand forecasts. Intershop Copilot, an intelligent AI advisor, supports e-commerce managers and product-content editors in their daily business. In the context of a natural voice-text chat, you can pose questions such as “Which of my products sells best?“. The AI will be able to provide a statistically accurate response based on your real-time business data. And that is only one of multiple functionalities. We see great willingness on the part of B2B companies to use AI for such application scenarios—but also the desire to know that they have a competent and supportive partner such as Intershop.
What are the changes that AI will introduce into the commerce landscape? Does AI tend to help e-commerce? And who stands to benefit: the major players or the SMEs?
Of course, the major players on the market have the resources and knowhow needed to integrate AI profitably into their e-commerce strategies. Yet, small and mid-sized companies can benefit equally by creating intelligent solutions for special application cases or niche markets, and personalizing the customer experience in ways that the Amazons of this world could never afford to do. That’s because using AI essentially comes down to two things: efficiency and a perfect, personalized customer experience. That is why at Intershop we believe in an intelligent future for online commerce, which means autonomous commerce. For instance, SMEs can provide their customers with personalized information, offers and prices as well as convenient self-service options via a digital customer portal and display the installed base, i.e. the totality of products (e.g. machines) that are currently being used by the customer as “digital twins”. By autonomous commerce, we mean, for instance, if customer service is automatically notified—without human intervention—as soon as one of the machines idles or when a spare or wear part is automatically reordered because sensors indicate these are defective, or data analyses predict the necessity of parts replacement. If the systems are intelligently networked for both customers and manufacturers and supported by AI and machine learning, this also results in multiple advantages and potential benefits for SMEs so they can get their share of the pie and raise their online business to the next level.
If you would like to learn more about the status quo and the future potential of using AI in e-commerce, we highly recommend that you read the whitepaper “Personalization in B2B e-commerce”. It explains how AI can help you deliver an intelligent, personalized experience to your customers. Be inspired!