What Restricting Small E-Stores to Adopt AI?
Article by Roberto Garvin (Co-Founder at MoFluid)
The Artificial Intelligence industry continues to grow at a rapid pace and is estimated to grow to almost $5 billion by 2025. Artificial intelligence is impacting many industries. It’s transforming the way people communicate and do business with each other. One industry which AI has the Potential of Revolutionizing is the E-commerce industry. Artificial intelligence can increase the productivity of E-commerce businesses and lead to an increase in revenue and profits. Unfortunately, there are many obstacles that are currently standing in the way of Small E-stores adopting AI.
Benefits of Adopting AI:
It won’t be an understatement that AI has come of age. Not only AI has impacted industries like Healthcare and Automotive big time but transformed working style of professionals across verticals. Before getting into what’s restricting e-stores from adopting AI and incorporating it into their business strategies, it is crucial to first understand how exactly they would benefit from it.
AI can benefit ecommerce businesses in many ways. It can help gather and decipher customer data, allowing you to make better product recommendations to your customers. AI can assist customers in helping them find products they are looking for. It can be used in your customer service strategy to help customers figure out the solutions to common problems.
Artificial intelligence can be used to detect and prevent hacks and cybercrime. It can also be used to spot fake reviews and block fraudulent purchases. Machine learning can be applied to inventory management to better streamline order processing. Automated robots can be used to carry out menial tasks and prepare orders for processing. If ecommerce businesses have so much to gain by using artificial intelligence, what is truly restricting small e-stores from using it?
Here are Three Common Factors:
1. Lack of Awareness and Knowledge:-
Unfortunately, many small business owners are simply unaware of the current trends with regards to AI.
AI in retail, including E-commerce, is already estimated at hundreds of millions of dollars and is expected to rise drastically over the next decade. However, many who own e-stores have not yet put AI on their front radar. A lack of awareness about artificial intelligence obviously isn’t limited to small business owners or even to business owners in general. This lack of awareness is also present among senators, congressmen, and other elements in government as well, in a general problem that Forbes calls “the lack of intelligence about artificial intelligence.”
It’s not just a general lack of awareness that is the problem. It goes deeper than that. Even business owners who are aware of the trends regarding Artifficial Intelligence are often not knowledgeable about how exactly they can use it for their own benefit. Many don’t know how to start or where to start. They don’t know which steps to take in order to use AI properly to increase profits. They don’t know the details of how AI can be applied to their specific business strategies effectively.
2. Lack of Resources:-
Another challenge that is restricting small e-stores from adopting AI is a lack of sufficient resources. Incorporating artificial intelligence into your business is something that will require a lot of financial and human resources. Let’s start with the financial aspect. Many small e-stores simply do not have AI in their budget plans. Part of this has to do with the lack of awareness mentioned above: Small business owners do not fully understand how AI will benefit them, thus causing them to place a low or no priority on artificial intelligence when planning their budgets.
However, it has just as much to do with the fact that many AI applications are not affordable enough. Large E-commerce companies like Amazon can afford all kinds of applications, but many small e-stores are still struggling to make a decent ROI and artificial intelligence simply doesn’t enter the picture yet. Not only does acquiring AI require financial resources but incorporating it does as well.
Sometimes, continuous testing and tweaking are required until you finally figure out the right way to use AI to increase efficiency and bring in more profits. You need to have a budget that can sustain such testing and improvising.
Larger Businesses can afford to throw large sums of money at something that has the potential to bring them profits on a large scale, even if there are significant risks involves. Smaller businesses do not have that luxury. You also need to be able to allocate time, mental, and human resources towards this. You need people with enough energy and mental capacities to work through the process of adopting and incorporating AI into your business until satisfactory performance is achieved.
3. Lack of Applications Geared Towards Their Needs:-
Businesses always needed to design their stores meticulously, keeping in requirements of a converting shop. With the introduction of AI, there’s another challenge in sight. Artificial intelligence will be limited according to the understanding of its makers (for the most part, and at least at its current stage). When creating AI for any specific purpose, a deep understanding of that purpose must be held by the creators.
In other words: When creating AI for the purposes of online retail, for example, those creating it should have an innate understanding of how retail works. Let’s say an AI application is being used in order to better recommend products based on a target customer’s demographics. The people creating the application would have to understand the details and nuances of market research and how belonging to a certain demographic would influence their purchasing decisions.
It would be similar if an Artifficial Intelligence application is being used to better recommend products to customers based on previous search history and product views or to detect fraudulent reviews. Unfortunately, those creating the AI are sometimes great at what they do but not knowledgeable in the industry they are creating it for. In our case, an AI application would have to created with smaller e-stores in mind. This way, the AI would be able to assist small e-store owners in a way that brings them the most benefits.
As you can see, there are still many challenges involved with artificial intelligence, and there are many factors that are restricting small e-stores from adopting it. By ignoring the human element, AI imbibes the much needed factor of improved accuracy. With its application, businesses will turn visitors into potential customers, generate sales and profits, increased efficiency and productivity, and a higher growth rate. If you can overcome the challenges and obstacles, you are guaranteed to stay ahead of the curve.