Skip to content

Why AI is the future of E-Commerce

Image made available via Creative Commons

As e-commerce competition increases, Artificial Intelligence will become a requirement to compete.

As Amazon continues to absorb more of the e-commerce market, their competitors are feeling increased pressure to compete. E-commerce companies have been some of the earliest adopters of artificial intelligence (AI), ranging from recommendation systems that suggest products customers might like to fraud detection systems that catch suspicious activity as it happens. However, those approaches are so widely used today that they are no longer competitive advantages and companies need to look elsewhere to get an edge.

To get that edge, e-commerce companies are collecting more data than ever from every part of their business, ranging from advertising channels to website behavior to customer demographics. Human business analysts can only reach a small amount of that massive fire hose of data, but AI powered automated systems can analyze all of the data continuously and extract valuable insights. This is leading to the rise of business analysis automation, provided by companies like Outlier, which uses AI to monitor and analyze business data and extract insights. Hiding in that data are important opportunities and critical problems that too often go undetected.

This approach is enormously powerful because these insights can be worth millions of dollars, especially if they are caught early. One example of companies using business analysis automation to get an edge is Jack Rogers, founded in 1960, a leading designer footwear and accessories company, selling designs for women, men, and children.

“We have a small digital analytics team, but a lot of data that we need to look at. Outlier automatically analyzes all of my Google Analytics and Facebook Ads data and tells me when something unexpected happens.” says Megan Petersen, the Director of Ecommerce at Jack Rogers.

Due to the seasonal nature of Jack Rogers’ products, there are year-over-year patterns to when demand for certain products begin to increase. Unexpectedly, demand for one set of product categories started to increase in February, much earlier than they had seen previously. Before using Outlier, Jack Rogers would have eventually noticed this increased demand, but likely too late to capture the interest of the early customers.

By using Outlier, Jack Rogers was able to react to the unexpected interest in the product category at the time it was happening. In response to the Outlier insight, Jack Rogers adjusted their planned email marketing campaign to focus on the product category in demand, resulting in increased sales and revenue for the company.

“We didn’t expect to see interest in this particular product category so early in the season, but thanks to Outlier we were able to adjust our email marketing campaigns, in real time, to take advantage of the interest, resulting in increased sales.” says Megan.

To compete with a data-driven organization like Amazon, e-commerce companies will need to adopt new technologies like those offered by Outlier. As a result, we’ll see amazing new advances in efficiency across the market, which should result in a better experience for all consumers.