In recent years, ecommerce business has drastically changed the typical business processes and typical brick and mortar mentality of both businessman and customers. Following is a modern IT practice which contains Artificial Intelligence with respect to the subscription e-commerce.
Subscription E-commerce: As the word subscription defines the recurring process of any product or service. The phenomenon of Subscription E-commerce can be explained as, paying for a specific amount of goods/service and getting the expected goods/service at doorstep. Moreover, as we see, Subscription E-commerce is beneficial for buyers and sellers too. Especially, companies offering this kind of business get secured about cash management in the way of recurring revenue as well as about increase in turnover. It also helps to retain the customers.
Artificial Intelligence and its applications in subscription e-commerce: The term artificial intelligence defines the theory and ability of computer systems to perform task considering human intelligence but is to be carried out automatically. With the help of AI in e-commerce, a system analyzes what a customer has done and based on it, prediction is carried out what he is going to do. Repetition in patterns of the activities, system decides what to offer a customer and at what time. For example, if the price of a specific product has bene dropped by company, then the customer gets notified immediately. The AI System generally elicits the preferences given by the customers at the time of registration. Decision support system then excavates the purchase history of customers to make future recommendations to them.
For the use of AI in subscription e-commerce, three parameters should be taken into consideration as – pricing, packaging and payment. In a subscription context, the payment will be multiple such as ‘per month’, ‘once at the time of subscription’ or ‘COD’. Nowadays, just the price of the product is not important, but the value carried by that product along with the benefits offered to the customers is also taken into account. Therefore, in the case of a product like magazines, packaging of the magazine and appearance of it when it is delivered to the customer carries keen importance. Apart from that, Price & quality of the magazine and the content discovered in it also happens to be important.
Artificial intelligence is used for conversations with the customers regarding any query with the help of chatbots. AI system resolves most of the queries based on FAQs and Interaction with human takes place only if it’s necessary.
E-commerce companies using AI for subscription e-commerce:
a) Netflix is an online media and video streaming service, which offers subscription for the users. The AI system of Netflix works as- the system knows that the specific person likes action movies, so it mainly recommends him few top rated action movies based on current trends. If the person is not interested in the recommended movies, system has more to offer than the action movies.
b) Wayblazer is an AI platform for travel industry which provides solutions for the organizations merchandizing hotels, cruises and tours. Wayblazer inform travelers and provide the best trip recommendations for them. This makes travel search, planning and booking experience easier. Wayblazer uses IBM’s Watson AI system.
Necessity of AI in subscription e-commerce: As we see, subscription e-commerce is cost effective. It offers niche products/services at the low cost of inventory carrying. The subscription ensures the fixed customer base, performing steady flow of cash and a predictable inventory. It helps to maintain customer-seller relationship over a long period. If a company offers interesting goods/services to the customers, it results in gaining customer loyalty. Though, these are the nascent stages of AI in subscription e-commerce, the scope of it has been maximized for the future. In addition, use of AI is beneficial in all aspects like as cost management, accuracy, time management and faster response rate.
