How Deep Learning Can Boost Small Businesses
Even before Covid struck, local businesses were struggling to remain relevant in the face of serious competition from big names such as Amazon and Walmart. The pandemic has put even more pressure on small businesses, with one study finding that the coronavirus’ impact on profits and revenues “is comparable to the worst quarter of the 2008-2009 financial crisis.”
Thankfully, with e-commerce and the reach afforded by the internet, local businesses now have the opportunity to look beyond their community to find customers and generate enough revenue to keep afloat.
E-commerce gives small businesses a new opportunity
The incredible thing about shopping in the online era is that you can purchase goods from shops big and small from all around the country, as long as they have a website. For small businesses, this has two benefits: not only does it allow them to reach an audience far beyond that of their local community, it also enables them to collect more information about what their ideal customer looks like, as well as get a better sense of what potential customers are looking for.
As shops look for much-needed revenue opportunities, the ability to effectively target customers nationwide efficiently would not only allow them to stretch their budget further, but also direct their spend squarely at those people most likely to purchase a product. However, for business owners with limited technical expertise, being able to extract the insights needed from the data they have on hand and apply them to their marketing, product selection, or customer interactions can be difficult.
What is deep learning?
Enter deep learning. While deep learning and its cousin artificial intelligence have garnered a reputation for being cutting-edge, highly complex technologies, it is in fact simpler than ever for companies of all sizes to implement both of them in some way. For instance, many businesses are already using chatbots in place of customer service agents, or relying on some sort of AI to assist with email marketing, audience segmentation, or personalization. There are also plug-and-play deep learning solutions that take a business’ first-party data and use it to build a custom algorithm that addresses that company’s particular need.
It is important to remember that, while all deep learning is AI, not all AI uses deep learning. The main difference is the level of sophistication: AI refers to systems that are able to perform some of the same functions that humans are capable of (eg. speech recognition, problem solving, etc.). However, much of what is labeled “artificial intelligence” is nothing more than a computer program that has been written to perform a certain function, rather than an intelligent, self-learning program.
By comparison, deep learning uses neural networks, a complex system of nodes that enable a deep learning algorithm to “learn” in a way akin to humans. As humans learn from experience and by collecting information on what they see around them, so too does a neural network learn from the data it is given — and, because the network is able to take in a much greater quantity of information than a human can, it is able to find patterns that humans cannot. This is what enables deep learning algorithms to make better predictions, and consequently be more accurate when identifying prospective customers and the best way to target them.
How deep learning can help businesses
Implementing deep learning would give brands that flexibility while providing other key benefits. First and foremost, deep learning can be used to identify people among the general public who most resemble the profiles of existing customers, and therefore have a better chance of being converted. Second, for retailers specifically, a deep learning algorithm can use location data to help increase foot traffic and in-store conversions. Third, deep learning ensures that marketers can get the maximum benefit from their budget by avoiding unnecessary ad spend on people who are unlikely to make a purchase.
With deep learning, local businesses can become national businesses. Deep learning can take the information they have on their local customers and use that to extrapolate a larger audience with those same characteristics to target around the country.
Businesses can also experiment with their advertising budget to see what will broaden their online sales. Or, to put it another way, deep learning can enable local businesses to grow their footprint and earn more loyal customers. This will ensure that these businesses can survive, even in the face of competition from big-box retailers like Amazon and Walmart, and continue to provide valuable services to their communities.