A Closer Look At eBay’s Focus On Artificial Intelligence

July 10th, 2017 by Trefis Team
-4.11%
Downside
50.94
Market
48.85
Trefis
EBAY: eBay logo
EBAY
eBay

Artificial Intelligence (AI ) is increasingly becoming of paramount importance for e-commerce companies. As they look to attract customers and convert interest into transactions, it is essential that they show relevant products based on customers’ profiles and past history. Personalized recommendations can enhance the e-commerce experience as consumers look to navigate through the millions of products available online. As the e-commerce space becomes intensely competitive, a superior customer experience is essential for players to retain a competitive edge. eBay (NASDAQ:EBAY), which is working on a program to re-establish itself in the e-commerce segment,  is extremely focused on its AI initiatives which the company considers to be an essential “survival” requirement for the future. The company is looking to stay ahead of the curve by leveraging its data mine of buyer and seller transactions and investing in AI technologies such as natural language to drive growth.

Taking Personalization To The Next Level

While most e-commerce websites provide a “recommended for you” section of products based on browsing histories, eBay is looking to deliver a highly personalized consumer experience where customers can find an exact or near exact match of the products they are interested in. The company is building descriptive and predictive models based on the behavioral data available to show shoppers products they are looking for – based on price points and other requirements. The company’s goal is to reduce the time spent by a user on searching for a relevant product by finding the ideal match through AI. This initiative brings eBay a long way from where it began its turnaround initiative, when the company was working on better cataloging of its products to improve search abilities. eBay is now looking to optimize the shopping experience beyond keywords, building models to find the closest match.

Relevant Articles
  1. Up 19% YTD, Where Is eBay Stock Headed?
  2. Trailing The S&P By 20% This Year, Can eBay Stock Rebound?
  3. Down 4% YTD, What Should You Expect From eBay Stock?
  4. eBay Stock Is Down 7% YTD, What’s Next?
  5. What To Expect From eBay Stock?
  6. eBay Stock To Post Mixed Results In Q1

A superior shopping experience can help eBay drive user growth, which is a key driver of the company’s valuation.

eBay has been lagging behind other e-commerce players in terms of user and volume growth. However, its current initiatives aimed at keeping it ahead of the curve are an indication that the company is actively working on offsetting this competitive pressure, and these measures should drive growth for the company in the long term.

View Interactive Institutional Research (Powered by Trefis):