How Machine Learning Can Help Increase Ecommerce Conversion Rate [Infographic]
Have you watched “Minority Report?” In this movie, people have learned to anticipate the actions of criminals and detain murderers even before they commit the act.
This isn’t reality yet, but we do have technologies that allow people to predict the actions of others.
This is reflected in the world of modern e-commerce, among other areas.
Many E-commerce stores have a common problem: they offer good products, but their percentage of conversions is very low.
What if they could foresee consumer reactions and encourage people to buy their products?
Today this is possible thanks to machine learning technology.
In this article, you will learn about machine learning and how modern e-commerce companies can use it to increase their conversion rate with less effort
What is Machine Learning?
A definition from What.is says that,
“Machine learning is a type of artificial intelligence (AI) that allows software applications to become more accurate in predicting outcomes without being explicitly programmed.”
Simply put, a program educates itself and becomes able to make successful autonomous decisions.
This technology is becoming more and more popular. It is used throughout the world in a wide range of industries:
- Facebook applies machine learning to help users discover new content and avoid spam and misleading content.
- PayPal uses this technology to detect fraud.
- Even Google Translate is based on the machine learning technology. The more people translate texts with the help of this service, the better the quality of translation is.
Machine learning has also successfully taken root in e-commerce.
How E-commerce Businesses Use Machine Learning
Here are some ways how e-commerce companies use machine learning.
E-Commerce companies apply customer service chatbots to improve the customer experience
Good old chatbots fit perfectly into the modern e-commerce reality. They even seem to have been created for this industry.
For example, such brands as Burberry and Tommy Hilfiger actively use chatbots.
This is what a conversation with the Burberry chatbot looks like. (Source: luxurysociety.com)
“An intelligent, learning chatbot can manage basic customer service questions and learn how to help customers in ways that are specific to a particular online store,” says Armando Roggio, senior contributing editor for Practical Ecommerce.
Through machine learning, a company can have an online consultant who works 24/7 without any need for rest or compensation.
It also turns out that chatbots’ functionality perfectly matches consumer needs.
According to a Ubisend survey, consumers are ready to spend over $600 after communication with a chatbot.
E-commerce companies use machine learning to improve product search
Probably every online company understands the importance of the search function.
After all, the more easily consumers can find what they need, the more likely they are to buy something
“An effective site search function is obviously a key element,” says David Moth, Editor and Head of Social at Econsultancy.
That’s why many e-commerce companies are trying to improve the search option on their website.
For example, many have added an autocomplete feature, which helps improve both search speed and relevance.
Search with an autocomplete function. (Source: printerland.co.uk)
Machine learning technology, however, allows company owners to go even further.
A conventional website search can be turned into a so-called “learning search.”
A regular search is based on the principle of looking for similar keywords or synonyms, while learning search is much more complex.
Armando Roggio explains, “Improved learning search will also consider click rates, conversion rates, customer ratings, and even product inventory or margin.”
Like everything using machine learning, this type of search will improve itself over time, giving people more relevant and suitable answers to their queries..
E-commerce companies use machine learning to improve on-site merchandising
There is a trend for companies to apply machine learning to increase the relevance of recommended and related products.
According to Barilliance, as early as Q4 2014, 31% of e-commerce revenues were generated from personalized product recommendations.
Since then, these recommendations have become even more useful.
It also turns out that consumers actually want to receive these notifications.
According to an eMarketer survey, 80% of respondents believe notifications to be useful.
Usually, these recommendations are manifested in the form of push notifications.
A customer clicks on the notice and is suggested more suitable goods. The company gets money and a thankful customer.
How Machine Learning Can Help Increase Website Conversion Rate
Let’s explore two simple ways how this can be done:
1. Applying predictive notifications
We have already mentioned the concept of push notifications. Essentially, predictive notifications are an enhancement of this concept.
Predictive notifications are developed based on consumer psychology.
They can induce a potential customer to buy a product using certain approaches that are effective at motivating people.
For example, by urging them to buy a product that is in short supply, or that a large number of people are interested in it at the moment.
“When an object or resource is less readily available (e.g, due to limited quantity or time), we tend to perceive it as more valuable,” says Robert Cialdini, Professor of Psychology and Marketing at Arizona State University.
It is also worth mentioning why these notifications are called predictive.
When notifications demonstrate effectiveness, the program automatically starts to send larger amounts of traffic to them.
Let’s take a closer look at how predictive notifications work, and how they can be applied. For clarity, we can use our SmartPlugin, powered by a machine learning engine.
It uses real data from your website to ensure that notifications appear when they are needed, that they convey the necessary information, and are personalized.
First, let’s see how we can create a sense of urgency. This feeling will push a consumer to buy a product as quickly as possible.
To begin, we take the “urgency” icon and drag it onto the page.
Then we configure the parameters of a notification and save them.
Then the notification starts working.
Similarly, you can push consumers with a sense of scarcity.
A consumer thinks that besides him or her, the product is interesting to many other people, and because of this the desire to buy this product sharply rises.
All you have to do is just to select the scarcity plugin instead of the urgency one.
And then set it up.
Once installed, plugins will begin to have an immediate psychological impact on the visitors to a page.
They will encourage them to make a purchase, which will gradually increase the conversion rate of your website.
2. Creating dynamic headings on landing pages
Personalization greatly affects conversion rates, and this is another way that machine learning can help e-commerce.
According to research, 53% of consumers believe that retailers who personalize the shopping experience provide a valuable service.
To add some degree of personalization to your webpages, make their content dynamic, especially their headings.
This will cause your visitors to feel special, which will increase customer engagement, and, as a result, your conversion rate.
All you have to do is choose this plugin.
Then adjust it as you would like.
And finally, see it in action.
You can try these simple and effective ways to increase conversions right now and quickly check how well they work.
Many e-commerce companies face a common problem. They offer a good product, but for some reason website visitors do not convert into customers.
Some stores solve this issue with the help of machine learning technology, which is a type of artificial intelligence (AI) that allows software applications to become more accurate in predicting outcomes without being explicitly programmed.
This technology allows programs to educate themselves and become increasingly able to make successful autonomous decisions.
There are several examples of how modern e-commerce companies use this technology:
- They use customer-service chatbots to improve customer experience.
- They use machine learning to improve product search.
- They use machine learning to improve on-site merchandising.
Through predictive notifications and dynamic headings on landing pages, e-commerce businesses are able to increase their website conversions further.
What do you think about machine learning technology? Would you like to use it in your store? Please, share your opinion in the comments.
Smart Persuasion starts here!
Convertize.io offers Behavioral Messaging, Personalisation, A/B Testing & Optimization for eCommerce, Travel and Saas websites