The topic of AI has been extremely popular for a long time. No wonder – this technology is accelerating the development of virtually every area of life and business. And e-commerce is no different. Magento AI is transforming the e-commerce industry by facilitating personalized shopping experience. According to a Fortune Business Insights report on AI , artificial intelligence on the global retail market was valued at USD 5.50 billion in 2022 and is expected to reach USD 55.53 billion by 2030. These amounts are impressive and prove that artificial intelligence is a very important aspect of modern business. In this article, we take a closer look at how Magento AI is shaping the future of e-commerce.
What is artificial intelligence?
Perhaps for many people this topic has already been thoroughly explored. However, it is worth remembering what exactly AI is and what categories it can be divided into.
AI, or artificial intelligence, includes computer systems and machines designed to imitate human intelligence. It has the cognitive ability to solve problems and make decisions, just like the human mind.
It works on the basis of the following mechanisms:
- machine learning – AI helps us gain knowledge; its users can collect, process, and analyze huge amounts of data using AI and machine learning;
- deep learning – this mechanism enables AI to imitate the neural network of the human brain; this ability allows AI to learn and improve from past experiences, just like the human nervous system;
- natural language processing – AI has the extraordinary ability to process human language using machine learning algorithms; this allows machines to understand, interpret, and manipulate natural language.
Magento AI – improving e-commerce experiences
What does Magento – e-commerce software – have to do with artificial intelligence? It is a popular online sales platform used by many companies around the world. As with most cutting-edge technological tools, it is possible to integrate it with AI. This revolutionizes the Magento store, offering advanced solutions for personalized Customer shopping experiences.
Using AI for commerce in Magento will give you the following benefits:
- improved Customer journey – AI-based systems analyze Customer data and behavior; they offer tailored product recommendations, making shopping more personalized;
- increased sales and revenue – personalized recommendations increase up-sell and cross-sell opportunities, resulting in increased sales and revenue for the business;
- effective inventory management – AI-based inventory management systems analyze Customer demand patterns, optimize inventory levels, and prevent problems associated with overstocking and understocking;
- customer service chatbots – integrating AI-based chatbots enables 24/7 Customer service, reducing response times and increasing customer satisfaction;
- fraud detection and prevention – AI algorithms analyze transactions in real time, detecting fraud and preventing potential business losses.
8 uses of AI to increase sales in Magento 2
Magento 2 is the latest state-of-the-art version of the platform, offering advanced features and integrations, including AI capabilities. Here are some ways you can use Magento 2 AI to increase your e-commerce sales.
1. AI Chatbots
- AI-powered chatbots offer real-time assistance for stores managed in Magento by providing instant responses to Customer queries;
- they can handle multiple queries simultaneously, guaranteeing Customer satisfaction;
- they use natural language processing to provide responses that are personalized to Customer preferences;
- virtual assistants are available 24 hours a day, 7 days a week to ensure consistent customer service.
2. AI-based product recommendations
- AI algorithms analyze Customer behavior and preferences to provide personalized suggestions for products available in Magento stores;
- product recommendations based on browsing history increase sales and Customer engagement in Adobe Commerce;
- artificial intelligence can identify Customer preference patterns and predict future purchase behavior, providing better forecasting for the business;
- personalized recommendations increase cross-sell and up-sell opportunities.
3. Context-based search
- artificial intelligence enables contextual product search, improving Customer service in the Magento store;
- AI uses semantic search to understand Customer intent and deliver accurate analytics;
- artificial intelligence can interpret natural language queries, providing more accurate search results;
- the tool also adapts to changing user behavior, constantly improving search accuracy across the Magento ecosystem.
4. Preventing fraud and scams
- the artificial intelligence built into Magento allows for real-time analysis of transactions to detect unwanted activity;
- using machine learning algorithms, the AI can identify unusual patterns and quickly alert businesses using Magento to potential fraud;
- thanks to artificial intelligence, Magento increases the security of online transactions, reducing potential business losses;
- the machine learning models integrated into Magento evolve over time, constantly improving their fraud detection capabilities.
5. Personalization
- AI personalizes online shopping by tailoring product and content suggestions;
- AI allows you to create personalized marketing campaigns based on collected information about Customer preferences;
- the store administrator can use an AI-based page builder to customize the layout of the site to suit individual user preferences;
- personalized e-mails based on artificial intelligence increase Customer loyalty and their willingness to return.
6. Retargeted marketing
- artificial intelligence can identify potential Customers who have left the site without making a purchase, and then use a remarketing strategy to bring them back to the site;
- AI-based ads are personalized with the use of Customer behavior and preferences;
- this strategy improves Customer retention and increases sales.
7. Automatic inventory management
- AI-based warehouse management systems optimize inventory levels;
- AI-powered tools analyze Customer demand patterns to avoid stocking too much or too little inventory;
- artificial intelligence can predict future inventory needs and, with the right information, ensure appropriate inventory levels;
- automated inventory management reduces manual errors, thereby increasing business efficiency.
8. Sales analysis and forecasting of future trends
- artificial intelligence can analyze purchasing patterns and predict future trends;
- AI identifies Customer preferences and buying patterns and forecasts demand;
- AI-based analytics provide information on market trends to support strategic planning and predict seasonal trends to optimize product offerings and pricing.
How does Hicron support the development of your e-commerce?
As professional business advisors, we at Hicron are well aware of the challenges faced by our Clients. We have a deep understanding of their needs, built on over 16 years of experience on the technology market, both in Poland and abroad. Our proven track record of implementing cutting-edge technologies in Europe and beyond demonstrates our ability to deliver results. We recognize the importance of online sales, which is why we have created a dedicated offer for this area. Looking for e-commerce solutions for your business? Contact us!
Source:
Fortune Business Insights, Artificial Intelligence in Retail Market Analysis – 2028, https://www.fortunebusinessinsights.com/artificial-intelligence-ai-in-retail-market-101968.
