Source: Canva
Until recently, demand forecasting and inventory optimization were among some of the key ai applications that leveraged ai. However, recent advancements in ai have given rise to a number of innovative ai offerings that have revolutionized the retail business.
Think outside the box!!!
A unique use case involves optimizing the quality of product images to improve sales conversion rates. In this scenario, retailers leverage ai, specifically computer vision techniques, to enhance the visual appeal of product images, increasing the likelihood that the shopper will click on the product.
As part of the sales funnel structure, increased clicks generally flow toward higher conversion rates, i.e. sales. Expanding further, retailers can conduct hypothesis testing and experiment with different image qualities, determining which image attributes, such as high-definition pixels and proper lighting, help drive conversions.
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Computer vision techniques allow retailers to automate the process of implementing corrections to improve image quality, ensuring they resonate with customers.
Product Descriptions
Most e-commerce websites host products from different sellers, resulting in heterogeneous ways of listing product descriptions, which are often inconsistent and incomplete.
Lack of awareness and knowledge about what constitutes a compelling shopping experience leads to inconsistency in style, length, tone, and completeness, potentially impacting users' purchasing decisions.
However, with Generative ai, the ai technique of generating content, such as text, images, videos, etc., based on large data sets, businesses can generate effective product descriptions that can lead to higher click-through rates. and, in turn, a high conversion rate. .
This type of ai-generated content guarantees that not only the information is complete but also attractive and persuasive, capturing the attention of users. Taking this a step further, algorithms can even learn user preferences and provide product descriptions that resonate more with them. It's worth noting that retailers can continue to improve and build on such ai systems, based on how responsive the model results are to users.
This iterative process allows companies to refine their product descriptions over time, optimizing them for maximum effectiveness in driving conversions.
Seller risk management
Speaking of sellers, e-commerce platforms can also create an ai-based seller risk management system to monitor risks related to product quality, customer service, and compliance with ethical standards.
ai can learn from factors such as sellers' past behavior, customer feedback, and transaction records to detect irregularities or deviations from expected norms. These deviations flag sellers who may be in violation of platform policies and the code of conduct.
Analyze factors such as timely shipping, accurate product descriptions, fair pricing, and responsiveness to customer inquiries to highlight seller behavior. Those who consistently receive negative reviews or complaints, engage in fraudulent activities, or violate the terms of service agreements can lead to a poor customer experience and tarnish the platform's reputation.
Therefore, e-commerce platforms can proactively identify such sellers and suspend their participation by leveraging ai. In addition to ensuring quality from reliable sellers, these ai systems also foster trust among customers.
While seller behavior may change over time, the ai-powered risk management system can continually learn and adapt based on evolving default patterns.
Fraud detection
It is often assumed that fraud detection is the responsibility of the bank and that is true to some extent. But think about a customer who was the victim of a fraudulent transaction on the retail platform and is trying to connect with the retailer to reverse the sale.
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The retailer is usually unable to help and is assumed not to be at fault. However, for the customer, the retailer is the first layer of trust, also known as defense. Imagine, if the retailer had an ai-powered algorithm that could identify potential fraud based on the buyer's purchase history and could introduce an additional identification step to proceed with the sale, then the fraud would already stop at the same layer defense.
We live in a highly competitive world where it is crucial to have a differentiator. Managing and mitigating fraud risks highlights the retailer's commitment to customer centricity, resulting in greater customer trust and brand loyalty.
QA
Imagine that ai is your quality control assistant, checking each product before it hits the shelves, especially for perishable products, where maintaining freshness and ensuring consumer safety is crucial.
Similarly, computer vision can analyze clothing quality by detecting imperfections in seams, fabric consistency, and print alignment. By automating quality control procedures, retailers can maintain consistent product standards, delivering superior products to their customers.
Cognitive overload
Different brands have different size guides and it is often difficult for customers to remember a brand's specific size. ai is known for taking the cognitive load off the customer and can help make relevant recommendations, improving their shopping experience. For example, if the algorithm suggests size based on purchase history, user characteristics, and possibly feedback on size preferences. There you have it: full points for customer satisfaction.
Summary
From optimizing product images and generating compelling product descriptions to managing seller risks and detecting fraud, ai has the potential to revolutionize every aspect of the retail industry. With more ai products and pre-trained models open sourced, the era of free ai for all industries is here to stay.
Vidhi Chugh is an ai strategist and digital transformation leader working at the intersection of product, science, and engineering to build scalable machine learning systems. She is an award-winning innovation leader, author and international speaker. Her mission is to democratize machine learning and break down the jargon so everyone can be a part of this transformation.
