Machine Learning

How Machine Learning is Remodelling eCommerce?

The ecommerce industry is a multi-billion dollar marketplace that only Amazon seems to understand. Why is it that Amazon dominates the marketplace? While does only Alibaba even come close to Amazon’s success?

The answer lies in constant improvement. Amazon and Alibaba adopt new technologies. They’re constantly finding new ways to target consumers. Both companies know that targeted marketing maximizes return on investment. Enter in to machine learning.

Machine Learning
Machine Learning

Machine learning is shaping the ecommerce landscape. Amazon especially is fully invested in developing machine learning technology.

They’re ahead of the game, so much so that they’ve released their own consumer-facing machine learning tool.

Amazon has realized that machine learning is the future. The ability to both analyze data and use data to predict patterns is changing the ecommerce landscape.

Ecommerce stores need to embrace machine learning in order to compete. Soon, sellers without machine learning, both big and small, will go out of business.

So today, we want to explain exactly how machine learning is remodeling ecommerce. Let’s get started.

What is Machine Learning?

Before we can talk about ecommerce, we need to understand what machine learning is all about. What’s the difference between AI and machine learning.

Many people interchangeably use the terms machine learning, AI, and predictive analysis.

Down the line, AI will completely transform the professional sphere. How designers will design, engineers will engineer their products, health experts will go about diagnosis, almost everything will be governed by AI.

While the technologies are similar and can also work together, they’re distinctly different things.

Machine learning relies on collecting datasets that give computers the ability to learn without the need for programming.

Think neural networks. So while artificial intelligence might use machine learning to become smarter, AI isn’t the same thing as machine learning.

This distinction between technologies is very important to understand when we start talking about machine learning in ecommerce.

Many blog posts list AI as a way machine learning influences ecommerce. The posts talk about how chatbots can interact with consumers and drive revenues.

Chatbot interfaces might rely on machine learning, but they’re not machine learning themselves. Those blog posts are incorrect.

In ecommerce, machine learning usually stays behind the scenes. It’s easiest to think in simple terms. Ask the question, “How can self-teaching robots help my ecommerce business?”

Machine Learning and Ecommerce

Machine learning allows businesses to better understand consumer trends. Enormous datasets contain information that reveals consumer buying patterns.

You can draw conclusions about what a consumer likes, dislikes, and what they might want to buy next.

What’s more, machine learning gets smarter as time goes on. New data gets analyzed and then used to draw further conclusions.

Old datasets get combined with newer datasets to create a real-time understanding of buying patterns, and more.

Driving sales has always been a challenge for ecommerce businesses. With customer trend in hand, they are better prepared to succeed.

Recommendations

Machine learning takes Amazon marketing tools to another level. Think about your latest search. Or better yet, search for something on Amazon right now. You’ll find related products at the bottom of the search page.

Your buying history, search history, recently viewed items, and more all affect what related products you see.

That’s machine learning in action. Amazon compiles a dataset of related buying habits based on millions of consumers’ behavior.

Through machine learning, it can determine which products to recommend. Each product you see maximizes Amazon’s profits.

Smaller ecommerce sellers can use the same concept on their own store. Cookies allow stores to gather user information.

A cookie “attaches” to someone’s web browser to track their browsing behavior. Social media cookies offer specific demographic behavior.

With machine learning, these cookie-generated datasets allow smaller sellers to understand product-consumer relationships. Smaller ecommerce stores are able to recommend products to extremely targeted demographics.

Keywords

You’ve probably heard the term keyword research or in simple terms, you must have been using a search analyzer to keep an eye on what’s going around on your site and for competition. Even if you haven’t, everyone is already familiar with keywords.

Keywords are just searched phrases. They’re what you type into Google, Amazon, etc.

Think of every Amazon search you’ve ever done. Imagine every product you’ve searched for and the phrases you used to search for those products.

Amazon records every phrase from every user search. They also record what products each search returns and which products get the most clicks.

Amazon then compiles the information into a massive, ever-evolving dataset. Machine learning systems analyze the information to find frequently searched keywords.

Amazon can further utilize machine learning to help uncover similar keywords and offer those new keywords during search suggestions.

When a user searches “fuzzy socks” machine learning allows Amazon to know that people searching for fuzzy socks are really looking for “tall fuzzy socks.”

Machine learning uncovered that most “fuzzy socks” searches led to “tall fuzzy sock” purchases. Amazon then recommends the “tall fuzzy sock” keyword to increase their sale chances.

Smaller businesses can also use machine learning to discover their own related keywords. Targeted offerings mean more sales.

It’s All About the Money

Time is money, and ecommerce is about making as much money as possible. Machine learning is creating an ecommerce world where there’s no time for sifting through datasets. Computers can now process and understand data better and faster than humans.

Businesses that don’t capitalize on machine learning have less time to promote their brand in other ways.

Those not using machine learning also have worse targeted advertising. They’re less efficient at recommending products.

The Future of eCommerce

Ecommerce is set to continue growing. Amazon isn’t letting up and Alibaba’s stock price continues to rise. Consumers are more and more willing to buy products online.

In fact, a substantial number of consumers prefer online shopping. As the ecommerce market grows it’s important to stay knowledgeable about ecommerce trends.

Machine learning is pushing ecommerce in a very data-driven direction. Targeted advertising is easier to implement and companies are taking advantage.

The more refined the targeting, the higher the ROI. Plus, less time analyzing data means more time spent on other business issues.

In the future, expect growth from companies utilizing machine learning and stagnation from companies that don’t.

Ecommerce is moving toward a data-driven world that measures success in dollars.

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Written by
Sam Zaman
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