For eCommerce businesses, face-to-face interactions with clients are almost nonexistent. Clients make their orders online, make payments through mobile money transfer platforms, and checkout without any human interaction. 

To make these “invisible” clients happy, eCommerce businesses have to leverage machine learning applications and deep learning to understand who their ideal customers are. It is through knowing who the ideal client is and their pain points that businesses are able to personalize their services and optimize the customer experience.


Understanding Machine Learning

Machine Learning (ML) is a branch of Artificial Intelligence (AI). For starters, AI technology has the ability to sense, predict, reason, adapt, and exhibit any human behavior or intelligence with respect to big data. 

As a subset of AI, ML trains machines and computers to use algorithms or programs to recognize trends and patterns in raw data and then make sense of those patterns. The more data an algorithm analyzes, the more “knowledge” it accumulates, and the more effectively it applies that knowledge to new data sets. 

Machine algorithms work in three main ways:

Supervised Algorithms

These algorithms use classified and labeled examples from their past knowledge to analyze current data patterns and predict what might happen in the future.

Unsupervised Algorithms

Instead of relying on specified examples to make predictions, these algorithms crawl through data and draw new, independent inferences. They identify patterns and structures within data and create new knowledge.

Reinforcement Algorithms

These algorithms use trial and error to test different possible outcomes based on different lines of action within a given data set. They, therefore, help eCommerce businesses to pick the most appropriate lines of action in order to achieve the most desired results in the future.


How Is Machine Learning a Goldmine For eCommerce Businesses?

Online shopping gives shoppers more convenience than physical shopping and offers a wide range of choices in terms of products, sellers, quality, and pricing. It’s these obvious benefits that enabled online businesses around the world to make e-retail sales to the tune of 5.2 trillion U.S. dollars in 2021 alone. It’s for the same reason that anyone would expect the eCommerce marketplace to grow consistently through the foreseeable future. 

But then, a bigger marketplace comes with higher competition from more established eCommerce websites. Customer preferences and demands also get more complex as the client base widens. That’s where machine learning comes in.

Machine learning helps eCommerce businesses to understand their customers better, serve them better, and gain a competitive edge over competitors. It does this in many ways, including:


1. Product Recommendation

Thanks to AI, eCommerce websites can now collect user activity data from online traffic and create a database for each customer. Machine learning algorithms then comb through these databases and understand the taste and preferences of each customer, the pages & subpages they like, their purchase power, etc. They can even go down to the specifics such as a user’s location, favorite color, social media usage, etc.

This wealth of knowledge enables product recommendations on your website and helps your eCommerce business in so many ways:

  • Product recommendations increase impulsive buying, conversions, and revenue.
  • Accurate recommendations save time for clients and boost their satisfaction levels.
  • Auto-segmentation groups together customers who share common identifiers, e.g. people living in the same locations or sharing the same cultural or religious beliefs. This allows the algorithms to predict the needs and preferences of a large group of people.
  • Personalized recommendations can help predict the future demand for specific product categories. These predictions can inform which products you need to restock and the changes you might want to make in your inventory to maximize customer satisfaction. 
  • Natural language processing features give customers smart search results even when they type vague queries in the search bar. This can help when clients sometimes don’t have the right words to describe what they need when they land on your website. 
  • Image recognition properties can process images and learn customer behavior from the images they share online. If you’re an online clothing store, for example, ML can study a user’s preferences, allowing the system to categorize users and recommend products.


2. Predicting Conversion Probability

Machine learning can help determine the likelihood of a particular user returning to your business and the purchases they might make. Through future lifetime value prediction (LTV), machine learning can give you an accurate estimation of how much money the user will spend when they return. This knowledge helps you in 2 ways.

It is easier to leverage email and phone marketing when you know the probability of a user making a purchase in a specific product category. You can coin just the right marketing message and strategy for a specific user to encourage them to return.

Additionally, when you can predict how much a future customer will spend, you can streamline your marketing budget and get better value for money. LTV helps you identify potential high-value customers. That allows you to create strategies that increase their retention rate, without wasting resources on customers that may never return.


3. Better Customer Service

Most would agree that a simple, rigid price markdown cannot be effective in the dynamic marketplace that eCommerce is. You need a pricing system that detects potential changes in demand and market trends vis-à-vis your inventory and injects dynamism into your pricing. Machine learning does exactly that for you through predictive analytics. It tells you the best pricing, offers, and discounts for each product in real time.

Note that customers look for dynamic changes. As such, you cannot control your inventory and supply chain management effectively if you cannot predict these changes before they occur. Machine learning can conduct demand and quantitative forecasting for you. It can analyze previous fluctuations in customer needs and supply logistics and then use that knowledge to predict future and real-time changes accurately. You always stock what the market needs, so you are never stuck with dead stock. On the other hand, customers get what they need when they need it, and that increases their loyalty to your eCommerce business.

Customer speaking with a chatbot for support

One advantage that eCommerce has over brick-and-mortar businesses is that they aren’t limited to a specified geographical area or territory. You can sell to clients halfway across the world, and that boosts your bottom line. But then, a global clientele comes with the challenge of conflicting time zones. You have to offer 24/7 call center services in order to serve all clients effectively, regardless of their time zone. 

If you use chatbots to serve clients who show up outside your business hours, machine learning technology can enhance the effectiveness of your chatbots. It does this by learning new FAQs with every interaction and creating a rich database and script that the bots can rely on for a more consistent, useful conversation with customers.


4. SEO Benefits

Brick-and-mortar stores prioritize location when setting up their physical outlets because a good location gives them visibility. Without a physical location, search engine optimization (SEO) is the only shot your eCommerce business has at being visible to its online target audience. 

SEO is complex and hectic, but machine learning can make your optimization efforts a little less hectic. Among other SEO benefits, ML can:

  • Enable you to personalize your blog content. It tracks your ideal client’s digital footprints and identifies the answers and solutions that the target audience seeks. That allows you to align your blog content to market needs. 
  • Provide online visitors with real value. Online visitors spend significantly more time on a blog that’s valuable to them. The more the clients engage with your web content, the higher the likelihood of Google’s algorithm recommending your content to other internet searchers. Your SEO ranking picks up as a result, and the SEO domino effect kicks in.  
  • Analyze user profiles across the internet to identify image patterns. That’s particularly with regard to image intensity, favorite style, and color preferences. You can use that knowledge to personalize the photos you share both on your website and social media pages. Personalized images will enhance your social media engagements and drive followership.
  • Analyze the behavior of users when they land on different pages on your website. This will tell you which pages interest users the most and the ones with the highest bounce rate. By analyzing the activity history of each user, ML will point out the necessary UX tweaks that will encourage users to engage more with your content. Then, let a web design agency help create a smooth UX on your website.


5. Fraud Detection

Any successful eCommerce website must collect relevant user data in every transaction. The data ranges from a client’s social media profile information, credit card details, location details, name, age, and other details that you use to personalize your brand. 

Unfortunately, data thieves constantly try to sneak into databases and steal this data. Data breaches harm your brand reputation, risk your clients’ personal security and finances, and expose your business to unwanted legal headwinds. 

Machine learning algorithms analyze large volumes of data and detect even the slightest anomalies. Furthermore, many firms extensively investigate financial service providers to minimize errors in their payment processes and the theft of sensitive client information. It allows your IT support team to investigate unusual behavior in data and make the necessary amends before things get out of hand.


Leveraging Product Knowledge Graphs for Machine Learning

First things first: What is a product knowledge graph, and what does it do?

Any eCommerce website generates and gathers lots of knowledge with regard to its products & their features, product categories, pricing, shipping information, product reviews, etc. Some of this knowledge is structured, while some of it is unstructured, but all of it exists in diverse databases. 

Structured data, in this case, can be lists of products, their prices, and their quantities. Unstructured data can be product descriptions, features, and product categories. The work of a knowledge graph is to interlink available databases and, consequently, put data in context and form a network of knowledge that anyone can make sense of. 

Put differently, a knowledge graph provides eCommerce businesses with a framework upon which they can unite and integrate data for easier and more effective analytics and sharing.

When you deploy knowledge graph machine learning to your eCommerce website, you reap 3 main benefits:

Enhanced Discoverability

A knowledge graph will interlink your diverse product descriptions, making them hyper-targeted and more machine-readable. That makes it easier for Google algorithms to make sense of your content, convincing them to push it up the ranking.

Higher Interoperability

By interlinking your data sets and creating a network of knowledge, a knowledge graph makes it easy for you to share your content across different platforms. It allows you to provide Application Programming Interfaces (APIs) to multiple parties, like product review sites, search engines, web pages within your website, and smartphone applications.

More Dynamic Content

For your web content to be meaningful, it needs to be dynamic, immersive, and highly interlinked. For example, you want your blog posts to connect directly with your product page and categories. You want people who visit your blog to see what you sell, your pricing, product description, delivery info, availability, etc. A product knowledge graph will make this possible by assembling your content and making it dynamic.


Moving Forward

Does your eCommerce business need machine learning to take off? It very well might! The benefits of this technology are many and far-reaching, as we have established. There isn’t a more effective way of gaining meaningful insights in any area of your business than machine learning. If you want to generate more traffic, get more clicks & purchases, and gain repeat customers, now is the time to give machine learning a chance.