Artificial intelligence (AI) is directly related to Data Science – the science about data that aims to extract value from a big mass of information. This value may reside in, for example, enhanced forecasting capabilities, discovering patterns, better decision-making. Basically, AI concerns with information processing algorithms and methodologies. Artificial intelligence operates on huge amounts of data, analyzes it, and uses gathered insight to develop solutions.
Artificial intelligence is used in various fields, including marketing and business. According to forecast by Wall Street Journal, by 2030 AI can help increase gross domestic product (GDP) by 16%, making the global economy grow by about $13 trillion. In this article, we will look at how AI technologies are used in the modern-day market, what results it provides, and why use of AI gives companies advantages over their competitors.
What can AI do for Business?
Artificial intelligence is able to quickly bring a business to a fundamentally new level – this is one of its key tasks. Here are a few problems that AI can solve:
- Prompt response.
In some fields of business, the fundamental condition for success is to quickly analyze incoming data and instantly learn from it. Unlike conventional algorithms, which are not able to independently adapt to new conditions and data, artificial intelligence proves very useful.
- Marketing strategy development based on provided data and set goals.
Artificial intelligence helps marketers work: it not only analyzes previous sales but also uses forecasting to “predict” the future, taking into account competitors’ behavior and the situation on the market.
- Human factor.
Even the most professional and experienced employee can make bad decisions. Artificial intelligence eliminates the possibility of such an issue, as it is not affected by emotions.
- Fighting fraud.
Self-learning neural networks help analyze user behavior and identify suspicious transactions, as well as create algorithms to prevent financial losses. As a result, the system becomes less vulnerable.
- Increased profits.
Machine learning has proved to be highly profitable for businesses – it helps cut losses and increase revenue. Here are statistics to prove it!
Here is a visual representation of how revenue can increase from adopting AI in global companies, 2019, by function (according to research by Statista)
Artificial Intelligence in Business: Examples
Companies that work with food must monitor their expiration date and promptly perform inventory write-offs. For example, many baked goods retain their original quality for merely one day, so a substantial amount of products sold at bakeries, pâtisseries, etc. is written off daily.
The task: reducing losses without cutting the assortment.
AI solution: artificial intelligence made it possible to predict demand for 3-4 upcoming days, with high prediction accuracy. All that was required was to analyze data from accounting software such as 1C for the past one or two years. Thanks to AI, it is possible to optimize the production quantity, reducing the volume of written-off baked goods. An additional bonus is a reduction in material consumption.
Like many other businesses, supermarkets try to attract and keep their customers by setting discounts or special deals to keep buyers interested. But when done mindlessly, such features rarely work at their full capacity.
The task: a loyalty system (loyalty cards) was introduced in the supermarket chain and special discounts were in effect, but the effectiveness of these promotions was minimal, leading to an insignificant increase in profit.
AI solution: AI can analyze customers’ purchase history, using data for several years, select an optimal reward system for each customer. If the buyer showed no interest in promotions and discounts, artificial intelligence will prioritize other notifications, such as assortment description or new product’s advertisement. Customers who were interested in a specific promotion can be promptly informed of it. Timely receipt of valuable information will increase customer loyalty, simultaneously enhancing profit.
How we Use AI in Business Today
Certain business segments have been transformed with the advent of artificial intelligence, for example:
Machine learning algorithms often replace call centers, help complete the task of providing customer assistance and information around the clock, even on holidays and weekends. A “smart” program learns from its own mistakes and, over time, surpasses living operators’ incompetence. The result: a significant increase in customer loyalty, a buildup of the company’s positive image.
- Data management
AI collects, analyzes, organizes, stores data, as well as makes forecasts based on it.
A self-learning algorithm can take over routine tasks and allows human resources to concentrate on more creative tasks. For example, the program can fully automate certain management tasks, like booking of hotels, conference rooms, sending of invitations to meetings, purchase of tickets, basic logistics, etc. Thus, the entire administrative sphere can be completely reformed due to artificial intelligence. Of course, automation existed before, but its scope was limited, but now AI can help easily overcome such limitations.
Unlike artificial intelligence, a person cannot be completely impartial and objective. In addition, the preparation of a reliable forecast demands the processing of a significant amount of data, which is something a computer can do an excellent job of.
How AI Helps Entrepreneurs Grow Business
With the help of AI, businesses have almost unlimited access to new opportunities for expanding their activities, increasing profits. Even one algorithm can significantly improve performance, while an integrated approach gives even better results.
AI can help out by:
- Performing routine administrative tasks.
- Increasing the productivity of staff by optimizing work processes.
- Providing customer support.
- Reducing the role of the human factor in decision-making.
- Improving communication within a company, including overcoming the language barrier.
- Controlling financial transactions, detecting suspicious user activity.
- Controlling information security, observing data confidentiality.
- Developing marketing strategies.
- Short/long-term forecasting.
What We Established
The use of artificial intelligence is gradually becoming a necessity in all branches of business. The only question is who will be among the first to introduce modern technologies into business, reaping its benefits, and who will fail to recognize the role of AI for business and suffer the consequences? Both research and experience show that using artificial intelligence can help with resource management, establish better customer outreach, and have a significant impact on marketing and sales. Therefore, implementing artificial intelligence today is not a choice, but an inevitable course of action that all progressive forward-thinking companies must implement. After all, as we all know by now, the following progress and having technology on our side is what makes all the difference!