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Video: Don’t overlook the value of AI on ecommerce’s back end

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We are well into the artificial intelligence revolution in ecommerce.

Smart machines for years have been helping retailers attract customers, show those customers items they are likely to buy and “remember” how customers behaved on digital sites with the goal of making their next visit more personalized than the last. There is still work to be done in all those areas, but John Bancroft of FitForCommerce says that work shouldn’t distract retailers from considering the full potential of AI in the buying journey.

We met up with Bancroft, a senior consultant, at IRCE earlier this year, where he shared his thoughts in the brief video interview below.

While Bancroft made a number of points, the one that stood out was that while 75% of retailers are focused on using AI to improve customer-facing tasks, that leaves only 25% focused on using AI in their back-end operations. But rather than be alarmist, Bancroft, who spoke on the topic at IRCE, was optimistic.

And why not? If only a small portion of retailers have embraced AI in operations, that means there is tremendous room for growth, not only for vendors who help retailers with AI, but for the retailers themselves. Smart machines mean that retailers can increase efficiency and scale up endlessly. It means a better experience for consumers who see orders arrive faster in part because they’re not delayed by manual processes when it comes to order management and fulfillment.

AI powers the promise of fast delivery

Signifyd and its customers see this first hand. Signifyd’s Commerce Protection Platform uses AI to ecommerce order automation management while screening for fraud in milliseconds. The same big data and machine learning technology mean Signifyd can highly automate chargeback management and determine when a customer is being honest about not receiving a package that they ordered.

And while Bancroft noted that some retailers have been slow to act on the potential that AI brings on the back end, it’s wise to remember that AI didn’t become the go-to for marketing and merchandising overnight.

Change takes time, especially when legacy systems and processes are involved. But it is unlikely that retailers are unaware of the potential for AI to improve ecommerce after the buy button. As Bancroft noted, the vast majority are using AI to acquire and sell to customers. It is more likely a matter of priorities — and possibly resources.

On the resource question, Bancroft offered some encouragement. He explained that retailers have considerable costs when it comes to capital expenditures and operational expenditures. Operational expenditures are particularly a margin-crusher when it comes to ecommerce.

Back-end automation can cut costs

Automation is a powerful way to reduce those costs, Bancroft told us.

And if the back-end AI story plays out the way it did for AI on the front end, adoption will grow geometrically. Michael Klein, Adobe’s head of industry strategy for retail, travel and CPG, told us a couple of years ago about how he’s seen AI’s role on the back end of ecommerce grow.

Yes, AI has been an integral part of ecommerce for some time now, but the truth is, the journey is just beginning.

Photo by Mike Cassidy

Mike Cassidy

Mike Cassidy

Mike is the head of storytelling at Signifyd. A former journalist and a retail geek, he covers ecommerce and the way technology is transforming digital commerce. Contact him at [email protected].