January 8, 2019,   4:47 PM

Around 70% Of AI Projects In Digital Commerce Are Successful

Amany Zaher


artificial intelligence

Around 70% of digital commerce organizations say that artificial intelligence projects are very or extremely successful, according to a new study by research and advisory company, Gartner.

Gartner’s survey involved 307 digital commerce organizations that are currently using or piloting AI to understand the adoption, value, success, and challenges of AI in digital commerce. And the respondents included organizations in the U.S., Canada, Brazil, France, Germany, the U.K., Australia, New Zealand, India, and China.

Three-quarters of respondents said they are seeing double-digit improvements in the outcomes they measure, mainly customer satisfaction, revenue and cost reduction which cited improvements of 19%, 15%, and 15%, respectively.

Gartner predicts that by 2020, AI will be used by at least 60% of digital commerce organizations and that 30% of digital commerce revenue growth will be attributable to AI technologies.

“Digital commerce is fertile ground for AI technologies, thanks to an abundance of multidimensional data in both customer-facing and back-office operations,” said Sandy Shen, research director at Gartner.

The survey found a wide range of applications for AI in digital commerce, with the top three uses being customer segmentation, product categorization, and fraud detection.

It shows that a lack of quality training data (29%) and in-house skills (27%) are the top challenges in deploying AI in digital commerce. In addition, AI skills are scarce and many organizations don’t have such skills in-house and will have to hire from outside or seek help from external partners.

On average, 43% of respondents chose to custom-build the solutions developed in-house or by a service provider. In comparison, 63% of the more successful organizations are leveraging a commercial AI solution.

“Solutions of proven performance can give you higher assurance as those have been tested in multiple deployments, and there is a dedicated team maintaining and improving the model,” said Shen.

“Organizations looking to implement AI in digital commerce need to start simple,” said Shen. “Many have high expectations for AI and set multiple business objectives for a single project, making it too complex to deliver high performance. Many also run AI projects for more than 12 months, meaning they are unable to quickly apply lessons learned from one project to another.”

On average, respondents spent $1.3 million in development for an AI project in digital commerce. However, of the more successful organizations, 52% spent less than $1 million on development, 20% spent between $1 million to $2 million, and 9% spent more than $5 million.

Gartner advises digital commerce leaders to assess talent, dividing larger projects into phases and aim for under 12 months for the first phase, from planning, development and integration to complete launch as well as ensuring enough funding, and using the minimum viable product (MVP) approach.

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