Developing complete AI solutions integrated with an organization’s systems can cost millions. SMEs do not have the funds, resources, and infrastructure for this effort, which forces them to lose out. However, smaller firms can use AI tools and improve some of their business processes.
Some business processes that SMEs can enhance with low-cost AI tools are creating and running focused marketing campaigns, developing intelligent chatbots, managing inventory, cybersecurity and fraud detection, enhanced SEO and product search, dynamic pricing, creating marketing collaterals, and many more.
This blog examines how small e-commerce businesses can use AI and compete with giants.
How E-Commerce SMEs can use AI to compete with giants
Marketing
SMEs can use generative AI tools to carry out several marketing tasks at very low costs. The tools can help in content creation with posters, movies, tag lines, images, landing pages of sites, and more. AI Tools take text inputs, prompts, images, and pictures to generate the required output.
Templates and avatars are available and AI tools can render the avatar or a portrait to make a sales pitch using a script. SMEs can run full marketing campaigns, use AI tools to identify customer segments and sentiments, and push the promos to the required audience. AI monitoring tools monitor responses and design new promotions.
Data Analytics
Small ecommerce businesses use AI to analyze market data, and obtain deep insights into demand, supply, trends, and other metrics. Firms can then tailor their operational strategy to meet the new conditions. Several benefits such as correct inventory, identifying best options for pricing, discounts, and combo deals.
AI helps small businesses in e-commerce identify hidden patterns of demand and pricing in data. Predictive modeling helps to understand market trends, new designs, market potential, and pricing. This discovery helps to improve operational efficiency, lower costs, and waste, and make the firms more reactive. AI helps to understand customer behavior and preferences and provides enhanced customer experience.
Predictive analytics
Small businesses can use AI with predictive analysis to compete with giants in the sector. In local and smaller markets, AI studies previous data, creates and administers survey forms, and analyzes credit card payments, and shopping carts to analyze consumption and customer segments. Specific consumer types purchase certain grocers, food, apparel, makeup, DIY, and other items.
Areas with large families would purchase large quantities and giving discounts on ‘king/ queen size’ offers will attract more consumers. Similarly, smaller families and single consumers would find smaller packs attractive. Analysis of this data helps to adjust a store’s buying and stocking patterns, reducing inventory, and providing faster turnaround.
Product discovery
Small businesses with a limited product portfolio have far less access to customers. Large firms pay for expensive Google ads and listings that smaller firms cannot afford. AI-powered product discovery uses SEO, algorithms, and help to refine product descriptions. When users search on Google, SME products have a better chance of discovery by customers.
The AI-powered search feature on websites looks at the search intent behind search keywords. As a result, products with these new AI tags in the descriptions are brought out, leading to product discovery of obscure products. This feature also helps small businesses registered on Amazon and other retail sites.
Prototyping and wireframe design
AI-powered design and prototype manufacturing is simpler with less complexity and uncertainty. AI systems with access to vast databases of design, customer experience, and reaction, can refine design options. For a given design problem, AI can offer better suggestions. As a result, the prototype and wireframe will have higher customer acceptance.
Usually, product design requires expensive and time-consuming iterations. With AI, the variables, and design parameters are better managed since the system knows what works for customers. Small businesses can then focus on the refined parameters to design items that would have better acceptance. Products have higher success rates and improved sales.
Pricing
Small businesses with limited products, high overheads, and costs cannot match deep discounts offered by large retailers. AI with dynamic pricing analyzes the demand for specific products in a region and the price of competitors, and suggests the best pricing. It also factors product bundling, inventory, and suggests personalized pricing suitable for a small business.
This dynamic pricing can be offered for online and in-store purchases. When filters are applied in the store product selector, the AI algorithm can adjust the prices or offer bundled products, warranty, insurance, and other aspects. Customers are attracted by the perception of lower prices, and better experience.
Customer management
Small businesses often look at happy customers for endorsement and word-of-mouth publicity. AI provides several features like personalized product discovery and recommendations, chatbots, virtual assistants, sentiment analysis, customer segmentation, image and voice search, and several others. If customers make vague queries, the chatbot asks a few questions and then recommends products or answers queries correctly.
Virtual chatbots analyze customers’ purchase records, understand their likes, review browsing history, and recommend products. People with disabilities find voice query commands very helpful. Image search identifies products when customers are not sure of their requirements. With automated response and mailers, AI systems send mail automatically and such interactions enhance customer management efforts.
Cybersecurity
AI helps small e-commerce businesses manage cybersecurity issues very effectively. AI has features such as advanced threat detection, behavioral analysis, fraud, and ID theft, and real-time responses that overcome persistent cyber threats. AI with machine learning and algorithms monitors network performance, and browsing habits, watches for blacklisted IPs and users, and blocks them before they can launch attacks.
Small businesses are effectively secured against malware. Phishing, unauthorized access at banned ports, and identifying the intent of users. Deviations are flagged, fraudulent transactions are blocked, and customers and merchants are protected. Machine learning allows AI systems to learn from new exploits and protect the systems.
Automation
Small businesses in e-commerce gain from implementing AI systems. AI can help Several routine tasks such as order and invoice preparation, scheduling, monitoring shipments, and payment processing are automated. Fewer people are involved and errors are reduced. Transactions and decisions are taken quickly without delays reducing throughput time and costs.
AI helps to manage inventory as per the location and demand. The bullwhip effect is reduced, making operations predictive, cost-effective, and reducing overstock and stockouts. With routine tasks automated, staff can focus on AI-driven marketing campaigns, customer service, and enhancing their satisfaction.
Market research
Small businesses in e-commerce gain by using AI in market research in many ways. AI helps to analyze customer data and transactions to identify popular products and push them. When connected to econometric databases, the system studies trends, competitor performance, and pricing and locations. Firms can then organize their business to increase sales.
AI systems monitor social media accounts to understand customer sentiments. The online discussions are analyzed to understand likes, dislikes, wish lists, pricing, alternatives, and several other aspects. This research is automated and reports help in creating the appropriate strategy. AI helps to provide a roadmap for growth.
Conclusions
The discussion identified several ways with AI and these are in marketing, data analytics, cybersecurity, predictive analytics, product discovery, among others. Other ways that small businesses can compete with giants are AI-driven prototyping and wireframe design, pricing, customer management, automation, and market research.
AI can be deployed to run tasks and obtain several benefits such as customer segmentation, demand, and faster and more accurate design. The key is advanced data analytics where internal and econometric data sets are examined to find patterns of trend, behavior, and sentiments. To sum up, small businesses can effectively use AI in e-commerce to compete with giants.
About the Author
Harikrishna Kundariya is a marketer, developer, IoT, Cloud & AWS savvy, co-founder, and Director of eSparkBiz, a Software Development Company. His 14+ years of experience enables him to provide digital solutions to new start-ups based on IoT and SaaS applications.
