Artificial intelligence in e-commerce: what should we be prepared for?
Published on: August 3, 2018
Updated: August 30, 2023
Who doesn’t know the movie “Her” from 2013? A shy, introverted man creates an artificial intelligence in the form of his assistant Samantha and falls in love with her in the course of the plot. Unfortunately, the love between the two has no future and is marked by insurmountable hurdles. But this is exactly what could happen in the near future, perhaps in a less dramatic form. Due to the loneliness of many people, mainly in the Asian region, artificial intelligences, in the form of robots, could come into use and even replace human interaction or even friendships.
Artificial intelligences may act as advisors or even replace friendships in the future.
There are a number of trends and opportunities in e-commerce. From the rise of mobile commerce to necessary e-commerce technologies to the the influence of artificial intelligence on the customer experience – the future still has a lot in store for us.
In our new blog series, “Artificial Intelligence in E-Commerce,” we report on ways in which artificial intelligence can be used in e-commerce currently and, more importantly, in the future. It provides an insight into a world in which artificial intelligence is or will be part of everyday life.
But what exactly is behind the term “artificial intelligence,” where does it come from, and in what ways and forms does it manifest itself?
In short, AI attempts to mimic human perception and action through the use of machines.
The History of Artificial Intelligence
The term “artificial intelligence” was coined by US computer scientist John McCarthy. During a scientific conference at Dartmouth College in New Hampshire in 1956, the birth of the term was heralded.
Other important milestones in AI:
- 1966: Chatbots exchange information with each other for the first time
- 1977: A chess computer defeats then world champion Kasparov
- 2011: A computer program wins the game show Jeopardy
- 2011: Siri is launched
In addition, futurologist and futurist Ray Kurzweil predicts the following scenarios for the future:
Ray Kurzweil even assumes that artificial intelligence will exceed the intelligence of humans for the first time in 2045.
Whether all this will really happen remains to be seen, of course.
Applications of artificial intelligence
The areas of application of artificial intelligence are very diverse. Whether in medicine, production lines or games – this is where AI is predominantly used. In medicine, some surgical steps can be done much more precisely. In production lines, painting or welding is often handled automatically. Games, such as checkers or chess often make use of artificial intelligence. This means that games designed for more than one person can also be played alone.
A study by HubSpot, which surveyed 1400 consumers worldwide on the topic of “artificial intelligence,” shows that AI is becoming increasingly popular. 58 percent of respondents are very curious or interested in the new trend and would use AI-based tools to interact. The German e-commerce market is even more skeptical about the use of artificial intelligence. They are worried about network security and the handling of personal data. However, the situation is different in countries such as the USA and South America. Here, artificial intelligence has been on the rise for years.
4 Types of Artificial Intelligence
Artificial intelligence can be divided into four different types.
1. Purely reactive artificial intelligence
It represents the basis of artificial intelligence. Purely reactive artificial intelligence directly recognizes environment or situations and reacts to them. What it cannot do, however: Form memories or draw on experience. Examples of this are the Deep Blue chess computer from IBM, which beat the world chess champion Kasparov.
2. Systems with limited memory
This form of artificial intelligence has limited memory. This means that it can take into account parts of past information. This includes, for example, self-driving vehicles, chatbots or personal digital assistants.
3. Systems with their own consciousness
This artificial intelligence develops its own consciousness, recognizing itself and others. Furthermore, it can understand thoughts and emotions that influence human behavior. This form of artificial intelligence additionally has an understanding of feelings, motives, intentions and expectations. This form does not yet exist in the real world today. An example of this is the character “Sonny” from the movie “I Robot”.
4. Self-aware systems
This form of artificial intelligence can form ideas about itself. It is also aware of its internal states and can predict feelings of others. Additionally, it can form abstractions as well as draw conclusions. For this reason, this artificial intelligence is super intelligent, sentient and conscious. The character “Eva” from the movie “Ex Machina” is an example of such artificial intelligence. This form of artificial intelligence also does not yet exist.
Liability in case of incorrect use or errors of artificial intelligence
Now that all forms of Artificial Intelligence are known, another exceedingly important question arises: who is liable if something goes wrong? Now imagine the scenario of a self-driving car that causes an accident, possibly even killing people. The question of who is to blame is very difficult to answer here. This is precisely the scenario that occurred in the USA in March 2018. A 49-year-old woman was killed.
Autonomous driving is becoming increasingly popular.
However, the discussions about this are very intense and heated, so there will certainly be some changes here in the next few years.
Artificial intelligence in e-commerce
In what ways can artificial intelligence be used in e-commerce currently or in the future? Where does it come into play and which industries are particularly suited to the use of artificial intelligence? These 4 forms of artificial intelligence are already being used or will be used in the future in e-commerce.
Chatbots are also on the rise in e-commerce. They are mainly used to answer customer inquiries and communicate directly with the customer. As a result, they also relieve the burden on customer service in the company. Two birds with one stone. In the near future, chatbots could also become the perfect shopping advisors. First, however, the chatbot has to be fed with data. This enormous amount of data must first be collected.
2. Delivery robots and drones
Starting in 2025, According to a study by McKinsey autonomous vehicles as a new trend in parcel logistics Deliver 80 percent of our parcels and even to our doorstep. Either self-driving cars, delivery robots or drones can be used for this. In some European countries, pizzas have already been delivered by Starship robots. Delivery drones, on the other hand, are more suitable for more rural areas.
DHL is already using delivery drones. (Source: DHL)
3. Recommendation Engines
Through customized offers or dynamic product pages, artificial intelligence can suggest to customers the products they are most likely to be interested in. This is done by using collected data. This involves recording what activities the customer has already performed on the website. Personalization can be ensured by tailored offers created through the use of algorithms. Self-learning algorithms also record the customer’s reaction and use this for further recommendations. Thus, the recommendations are constantly optimized through the use of artificial intelligence and played out in a targeted manner. It is even possible that predictions can be made about the purchase of a particular product by a particular customer.
4. Voice assistants
Since Apple’s Siri or Amazon’s Alexa hit the market, voice control, in the form of voice assistants, has become indispensable. Online shopping has thus become more convenient and simple than ever before. The question “Siri, where is my package?” will be ubiquitous in the future and make shipping communication much easier. It is also predicted that interest in voice-based services will continue to rise in the future as their quality improves.
“Siri, where’s my package?” will soon be on everyone’s lips.