Artificial Intelligence in E-commerce: Revolutionising Online Storefronts

Artificial Intelligence in E-commerce: Revolutionising Online Storefronts

Date & Time
April 21, 2023
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By Lopamudra Barik

When someone says"artificial intelligence," the first image that may spring to mind may be a scene from a film like Blade Runner from 1982 or A.I. Artificial Intelligence from 2001, both directed by Steven Spielberg.

But when it comes to thee-commerce industry, it's less about robotics that resemble humans and more about the foundational learning technologies and algorithms.

By using gathered business and customer data to make better business decisions and more precisely anticipate the future, artificial intelligence (AI) can assist today's online merchants in providing an improved customer experience on and off their eCommerce websites.

Let's examine some of the ways that artificial intelligence (AI) and related technologies are advancing the e-commerce sector, from enhancing client interactions to streamlining operational procedures.

E-commerce and technological advancements

Technology continues to push the boundaries of what eCommerce is capable of, from virtual reality and software-as-a-service to artificial intelligence and digital transformation.

Technology is advancing  exponential rate, so online shops face constant competition from new offerings. You'll never run out of fresh and interesting things to do; the hard part is figuring out which chances are best for your e-commerce firm.

AI Is Transforming the eCommerce Sector

There are more benefits to artificial intelligence than just its "cool factor." AI implementation has the potential to have an impact on a wide range of organisational business operations.

Knowing the elements of artificial intelligence will help you comprehend how it might affect your company.

Data mining, natural language processing, and machine learning are all included in the broad definition of artificial intelligence.

  • Data mining is the process of collecting both recent and old data in order to make predictions.
  • The study of natural language processing focuses on how people interact with computers and how they comprehend spoken language.
  • Machine learning's the application of past knowledge or the use of examples to help solve a problem. "Deep learning" "involves layering algorithms in an effort to gain a greater understanding of the data."

The development of AI technology over the previous few years has made it a potent tool for increasing sales and streamlining business processes. Even a large number of tiny-commerce companies are utilising AI-capable technologies.

Benefits of Artificial Intelligence for eCommerce Companies

The advantages of artificial intelligence and associated technologies are ones that Amazon has long understood. Machine learning is used by the massive e-commerce giant to streamline logistics, enhance customer experience, and better choose products.

Every single one of the seven imperatives listed in a recent report from McKinney & Company and the Retail Industry Leaders Association for re imagining retail in 2021 might be backed in some manner by some kind of AI-informed technology.

1. More specialised advertising and marketing

Retailers questioned internationalisation was a major priority, but just 15% said they had fully adopt edit across all channels. Have one-on-one conversations with your customers and stand out from the competition with a more personalised message.

Artificial intelligence(AI) and machine learning advancements have made deep personalisation approaches possible. You may pinpoint what your customers actually want and convey the most effective message by analysing large data from purchase histories and other customer interactions.

2. A higher rate of customer retention

Retention can be improved by sending tailored marketing and advertising communications to clients.According to McKinney's Omani channel personalization research, omni channel personalisation techniques have the potential to increase revenue and customer retention by 10-15%.


The research states:"Building superior data and insights on customers, an asset that also provides additional value across the value chain, is a fundamental element of personalisation.... According to our analysis, traditional mass marketing will soon lose ground to customisation in terms of return on investment.

3. Complete automation

Automation aims to complete a task with the least amount of human involvement. That might entail anything from using a CRM or marketing platform to schedule emails, using Zapier to automate processes, or using cutting-edge technology to assist in hiring.


Robotics and machine learning, however, are some of the topics that are now being discussed most frequently in relation to future eCommerce trends.

AI can significantly contribute to your efforts to automate the repetitive processes necessary an online store. Automating processes like product recommendations, loyalty discounts, basic customer care, and more is possible with AI.

4. A successful sales process

By gathering information about your consumers, automating follow-up queries about abandoned carts, and more, using AI can help you establish a more effective sales process. By encouraging clients to interact with chat bots for straightforward inquiries, you can assist in moving them down the funnel.

AI Use Cases in Online eCommerce

You may be aware with many of the use cases for AI in eCommerce, but you may not realise that the technology they are based on is actually connected to AI. The following six are the most typical:

1. Customised product suggestions

Data collection and processing for customers' online buying experiences are now simpler than ever. Personalised product recommendations are made using artificial intelligence and are based on historical consumer behaviour and lookalike customers.


Machine learning is used to examine your purchase history by websites that suggest products you might enjoy based on previous purchases. Retailers rely on machine learning to gather data, examine it, and apply it to provide a customised experience, put a marketing strategy into place, optimise pricing, and produce customer insights.

For routine applications in eCommerce organisations, machine learning will eventually require less and less engagement from data scientists.

2. Pricing improvement

With AI-enabled dynamic pricing, you can adjust the price of your product based on supply and demand. Today's systems can forecast when and what to discount based on the right data, dynamically determining the minimal discount required for the sale.

3. Superior customer service

With the help of chat bots and virtual assistants, you can provide the impression of providing higher touch customer assistance. Although these bots aren't entirely self-sufficient, they can help with straightforward transactions so that live support personnel can concentrate on more complicated problems.

The 24/7 accessibility of virtual agents allows for quick resolution of basic queries and concerns at anytime of day without keeping your customers waiting.

4. Segmenting customers

E-commerce companies may now better understand their customers and spot emerging trends thanks to increased access to company and customer data as well as computing capacity.

"AI systems can explore highly complex and varied options for customer engagement very quickly, and they can continuously improve their performance as more data becomes available," according to an insight from Accenture. In order to attain precision, marketers can define parameters and let AI optimise and learn.

5. Wise logistics

In logistics, machine learning's predictive abilities "shine, helping to forecast transit times, demand levels, and shipment delays," according to a research by Emerging Tech brew.

Utilising real-time data from sensors, RFID tags, and other sources is at the heart of smart logistics, also known as intelligent logistics, which aims to manage inventories and more accurately predict demand. In order to provide better predictions for their supply chain and logistics tasks, machine learning systems get wiser over time.

6. Forecasting of sales and demand

You should base your inventory planning, especially in the period leading up to and following COVID-19, on both current and past data. You can accomplish that with the use of artificial intelligence.

According to a recent McKinney analysis, investing in real-time customer analytics will remain crucial for tracking and responding to changes in consumer demand that may be used for targeted marketing or price optimisation.

How to Incorporate Artificial Intelligence In to E-Commerce

  • Consider carefully what you want AI to help you achieve. Use common sense and don't forget to start small. Later on, you can always build on your achievements.
  • Find specific use cases that are pertinent to the company's overarching strategy.
  • Even if you consider yourself an armchair AI specialist, you should accept professional guidance on this one. Bring in a tiger team for a temporary or project-based assignment to get to work on helping you create a strategic AI road map.
  • When you're satisfied with what your team has created, it's time to construct the comprehensive solution. If it still requires some iterations before it performs as expected, don't be shocked.


Look into the different advantages of artificial intelligence and machine learning if you want to provide the greatest possible buying experience on your e-commerce website. It can assist you in making better use of your customer and business data to create an effective future plan.


What is Artificial Intelligence (AI) in Ecommerce?

AI in Ecommerce refers to the use of machine learning algorithms and other AI technologies to improve the shopping experience for online customers. This includes personalization, product recommendations, chatbots, and more.

How is AI revolutionizing online storefronts?

AI is revolutionizing online storefronts by improving the customer experience in a number of ways, such as personalized recommendations, chatbots for customer service, and advanced analytics to optimize pricing and inventory management.

What are some examples of AI in Ecommerce?

Examples of AI in Ecommerce include personalized product recommendations based on customer behavior, chatbots that assist with customer service, visual search to help customers find products, and predictive analytics for pricing and inventory management.

How does AI improve the customer experience in Ecommerce?

AI improves the customer experience in Ecommerce by providing personalized recommendations, faster and more accurate customer service, easier product discovery, and optimized pricing and inventory management.

What are the benefits of AI in Ecommerce for businesses?

The benefits of AI in Ecommerce for businesses include increased sales through personalized recommendations and improved customer service, reduced costs through optimized pricing and inventory management, and improved customer loyalty and retention.

Are there any drawbacks to using AI in Ecommerce?

One potential drawback of using AI in Ecommerce is that it may create privacy concerns for customers, especially with regards to personalization and data collection. Additionally, AI systems may not always make the best decisions, and businesses need to ensure they are monitoring and adjusting their AI systems as needed.

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