August 15, 2019
Artificial Intelligence allows humans to solve complex problems and replicate cognitive functions like never before, it replicates the way that the human brain learns - first observing, analyzing, generating a conclusion, and ultimately learning. AI depends on computer systems that are trained to perform tasks such as decision-making, translations, speech recognition, and visual perception. It is ultimately a learning loop because AI has a greater capacity for processing information, as humans, we can learn approximately 100 events in one day while AI can analyze over 1 million a day.
Data used to come solely from what users provided, e.g name, email, and address. But, “every two days we create as much information as we did from the dawn of civilization up until 2003” (Medium, 2015). Now, we have the capability to collect offline data as well. AI now gives companies the tools to understand and better target their consumer, an example for e-commerce would be how AI tracks ‘John’. Machine learning tracks their shopping habits, what they searched for, at what time, and whether they made the purchase or not. This way, companies can understand the users' shopping habits and better cater to them.
AI gives companies the capacity to deeply understand each customer’s behavior to increase sales, reduce churn and reduce costs. Now a company has the tools to communicate with their clients in a personal way because they now understand their behavior and can anticipate their needs. The process becomes more efficient because everything a company does is targeted to each users’ behavior.
Machine learning can drive incredible results in retail/e-commerce and CPG. With the capacity to analyze millions of user profiles, AI allows CPG companies to consolidate both online and offline data to create a single profile for each customer (regardless of how many points of contact they may have). As a result, CPG companies have a clear overview of their clients’ behavior and can target them to increase sales and reduce churn. For retail and e-commerce AI can bring similar results, with the learning capacity machine learning can group customers based on their past and future behaviors - which allows the company to create a more efficient inventory and cater to each clients needs.