How your shopping trends may be determined by Algorithmic Commerce
Artificial Intelligence (AI) and machine learning are becoming increasingly integrated into the language of eCommerce and marketing. They provide opportunities to use customer data to predict consumer behaviours and to react to how people shop. This means that retail and marketing are likely to be increasingly driven by data insights so as to be far more tailored and accurate when it comes to individual experiences.
In fact, the birth of Algorithmic Commerce - essentially, the combination of AI and algorithms to interpret, predict, and react to consumer behaviours - is set to change the world of online retail forever.
How does Algorithmic Commerce work?
Algorithms are something we associate with big tech companies - the closely guarded secrets to success that can make or break these big brands. It's search engine algorithms that determine what people see in search results - and that no two users will see the same pages. The purpose of any algorithm is to understand buyer behaviour every second and then deliver the products, services, or results the individual is most likely to buy.
They do this by absorbing just about everything that we do online, whether that's browsing for jeans or searching for directions to the nearest department store. When this data is combined - and when AI is thrown into the mix - it creates a situation where algorithms might well be able to identify our needs before we do.
Why does AI make such a difference?
AI in algorithmic commerce creates the ability to not only track and analyse what consumers are doing, but to predict it with a high degree of accuracy. Being able to determine shopping trends - often before they even occur - is one aspect of how this will change the way we buy online. Algorithmic commerce can predict what consumers are going to do online, and this is an incredible resource for any brand to have access to, especially when it comes to improving inventory management, marketing, and logistics.
The importance of data
For any business, being able to take advantage of new systems and process depends on the state of data handling within the organisation. A low-grade CRM or poor data will make it almost impossible to take advantage of developments like algorithmic commerce, putting any brand at a significant competitive disadvantage. Strong data infrastructure needs to be a priority for those looking to embrace innovation to get ahead.
Upgrading your marketing
Although most of us would like to think we are spontaneous and unpredictable, the data that we generate tells a different story. In fact, most consumers are driven by habits that can be converted into actionable insights for brands with the right analytics - and a dash of AI.
For brands, the marketing opportunities that exist in algorithmic commerce are significant, evolving from offering consumers what past behaviours indicate they already like, to using machine learning to successfully predict what they will want to buy next. That's gold dust in marketing terms.
Algorithmic commerce is already making waves in marketing and retail. Predicting shopping trends could be the very least of what this AI-driven approach is capable of.
Algorithmic commerce is one of several key trends, highlighted by Wunderman Commerce in our Future Trends 2019 report, that are set to have a significant impact on eCommerce - and which present organisations a variety of opportunities in their quest to thrive in a digital-first world. You can download the full report with our compliments: