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Why Explainable AI (XAI) is the future of marketing and e-commerce

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“New machine-learning systems will have the ability to explain their rationale, characterize their strengths and weaknesses, and convey an understanding of how they will behave in the future.” – David Gunning, Head of DARPA

As machine learning begins to play a greater role in the delivery of personalized customer experiences in commerce and content, one of the most powerful opportunities is the development of systems that offer marketers the ability to maximize every dollar spent on marketing programs via actionable insights.

But the rise of AI in business for actionable insights also creates a challenge: How can marketers know and trust the reasoning behind why an AI system is making recommendations for action? Because AI makes decisions using incredibly complex processes, its decisions are often opaque to the end-user.

What is Explainable AI (XAI)?

The machine learning black box challenge is not new, and there is one main reason that it has been the key topic of discussions for many AI projects  – the need for transparency, trust, and a good understanding of expected business outcomes.

Why did the machine come up with this recommendation? What is are the underlying root causes and driving factors?

It’s difficult and potentially dangerous not to have answers to these questions, not be able to connect the dots, and not know the expected future outcome if you’re making important business decisions. It’s hard to trust a machine’s recommendations that you don’t thoroughly understand.

This is where the need for Explainable AI (XAI) comes in.

An increasingly important factor in AI is being able to explain why it has reached a particular recommendation or decision. Explainable AI provides the next stage of human-machine collaboration. It doesn’t come to replace human workers; rather, it will complement and support people, so they can make better, faster, more accurate decisions.

XAI brings transparency to the forefront of business decision making, unlocking the power of artificial intelligence and machine learning, thus delivering actionable insights that unlock the true business value.

When receiving recommendations, advice, or even descriptive characteristics, looking for reasons and justifications behind the recommended action should be compulsory. It’s not enough to simply predict the outcomes or suggest the next best action without showing the connection to the data and the impacting factors used to reach it.

The three pieces of a puzzle behind Explainable AI (XAI):

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In use cases for e-commerce and digital marketing, Explainable AI will provide explainability and transparency, thereby improving business results.

XAI for marketing offers and campaigns

XAI will provide reasons, explanations, model accuracy, and the expected outcome for specific messaging, offers, and user experience to engage with the target audience in the most optimal way.

XAI will increase offer relevance and boost user interest and engagement.

Explainable AI for e-commerce purchases and conversion

XAI will provide key factors that drive predicted conversion. It will allow adjustment of the key factors by a business user in real-time to further optimize profitability and business outcomes.

This reasoning and transparency will lead to a decrease in abandoned shopping carts and an increase in average order value, resulting in higher revenue and conversion rates.

Hasta la vista, baby: Say goodbye to the past, because Explainable AI is here

The transition to Explainable AI is underway, and must be part of any customer experience initiative. It will empower the line of business to take actions based on the explanations that machines give them.

Moreover, XAI will put data into context when a business user needs to take an action as part of the business workflow. The convergence of AI, supporting data, and actions will shorten the time and effort between actionable insight and action, thus encouraging more people to incorporate XAI and supporting data into everyday decision making.

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Anatoly Tulchinsky
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March 11, 2019
Anatoly Tulchinsky

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