Artificial intelligence (AI) is transforming all forms of business, but perhaps this change is most noticeable in the online marketplace sector, which has implemented artificial intelligence in all aspects of its operations.
Artificial intelligence can process millions of data points and compare, analyze, and create offers resulting from data analysis that would have been impossible to process at such speed before.
The online market has experienced a huge rise and online shopping has become commonplace. Platforms are now so simple that anyone can purchase new products with just a few taps or clicks. One example is Locanto – an online marketplace where users from all over the world post ads for a wide range of products and services, personalized to not only their city but a smaller area and neighborhoods. For a closer look, check out here the specific categories that are available in one single area. Global marketplaces like these quickly recognized how powerful and useful AI can be for the benefit of their users. In the case of Locanto, AI is being used to place ads in the correct category automatically when a user makes an error when posting, making sure buyers can find exactly what they are looking for quickly and easily.
This is just one example of how artificial intelligence has strengthened online marketplaces, but let’s look closer at how we can use AI for that all-important conversion stage and what this means for dynamic pricing.
What is dynamic pricing in online marketplaces?
Dynamic pricing is not a new phenomenon. But now, we can implement AI as part of it. Its algorithms can process large amounts of data that involve tracking competition, current demand and supply in the market, and even consumer behavior and create real-time pricing for each individual product.
For example, artificial intelligence will monitor your competitors when renting real estate or offering hotel tourist attractions. If there is a decline in certain days in their offer, it will recommend that the price be reduced in your facility.
Artificial intelligence has algorithms that constantly learn from new data they receive, so their strategy is always in line with the current market aspects. In addition, it has the option for analytics and the ability to predict market trends using all the data it receives to anticipate future demand for specific products.
The advantage of AI lies in its ability to automate tasks and work 24 hours a day, with real-time market monitoring and continuous data processing. Each data analysis leads to AI making real-time product price decisions, matching up with consumer needs.
In addition to current data, AI analyzes past market data, competitor behavior, consumer behavior, product supply and demand, price increases, and discounts according to seasons, holidays, and increased or decreased purchasing in a certain period during the year.
This relates to the demand forecasting model. So for example, if you sell swimsuits, the algorithm will recognize the increased need for purchasing this product based on the seasons and adjust the prices of the same products during seasonal purchases.
Personalized offers
Artificial intelligence allows us to track customer behavior, needs, and purchasing patterns. People naturally have personal interests in different products and brands, and have less or no interest in others. For example, offering homeware products to a user whose online user behavior has only shown an interest in video games would be a waste of time and money. But now, using artificial intelligence can help us attract the right customers for our products.
Analyzing data gives AI a significant advantage over traditional market research. This way, prices, and promotions are adjusted to each customer, creating a personalized shopping experience. When making a purchase, customers usually check the prices of products at several places, and with the development of online marketplace markets, this has always been challenging. You can get prices on different platforms in a few clicks for the same product. But with AI, it’s much easier to constantly monitor the competition so that your prices remain competitive and dynamic within the online marketplace sphere. The use of artificial intelligence in the online market is crucial for speed, accuracy, and consistency.
No human error
AI processes a large amount of data and calculates prices and discounts in line with market trends. People have been doing the same job for years without AI assistance, but the possibility of error has been minimized with its emergence. People often think about the tasks they perform. Data processing can be monotonous as it mainly involves repeating the same action endlessly, which can cause people to lack concentration. Using AI technology allows a very minimal chance of error.
Inventory management
Conventional inventory management is limited to only current inventory levels. However, AI-based inventory management maintains inventory levels based on data related to several factors:
- Sales trends in previous years
- Predicted or expected changes in product demands
- Potential supply issues that may affect inventory levels
- Time for action
Inventory management is the most essential item in online trading. AI can analyze all behavioral patterns and adjust prices, helping avoid excessive inventories and prevent stock shortages in real-time. It can recognize products that sell less and suggest lower prices for the same products to help you eliminate excess products that have been in stock for a long time.
As the number of products on the market increases, so do the costs of storing and holding excess products. This allows you to make even greater profits on an online marketplace.
Improved customer support
Using chatbots that run on AI means that customer support is available 24/7. This is important because modern customers expect real-time answers, and on the other hand, it allows savings in hiring customer support agents.
Artificial intelligence technology now allows free communication with chatbots that can recognize and engage in conversation naturally rather than answering predetermined questions.
When that information is conveyed to an artificial intelligence-driven chatbot, it can provide a personal experience, information, answers, and suggestions based on client priorities. This will increase sales.
Streamlining your business
Artificial intelligence reduces costs because it can perform tasks from data analysis to monitoring competitor prices, inventory monitoring to customer conversations, 24 hours a day. This drastically reduces costs and allows people to improve their business in other significant aspects, not worrying about tasks that they can perform instead of them.
