Artificial Intelligence is Becoming the Future of Ecommerce

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Artificial intelligence is increasingly becoming a part of everyday life. 

Generative AI is building content immediately. Predictive AI is taking a peek at the future. Deep learning is producing human-like personalities. ChatGPT is a household name. Big data is a “thing” now.

This is expanding to ecommerce as well, with AI producing new opportunities around understanding customers, interacting with them, and automating important processes. 

It was estimated that global spending on AI in ecommerce was expected to reach more than $8 billion by 2024.

Let’s dive deeper into AI’s impact on ecommerce and how it can improve online stores.

Main types of AI that ecommerce companies can employ 

“Artificial intelligence” is a fairly broad concept that includes multiple use cases. These types show particular business functions that can be impacted or improved.

Data mining. 

Most ecommerce companies have abundant data to pull from. AI makes it easier to collect, analyze, and leverage data to produce actionable information. Think about producing recommended products based on past sales behavior.

Machine learning. 

Self-learning algorithms can be used to enhance inventory management, forecast sales trends, customer interactions, and automate logistics to provide a superior customer experience.

Natural language processing (NLP). 

NLP is a type of AI that focuses on understanding and generating human languages. Ecommerce companies are using NLP to improve chatbots, allowing them to better answer frequently asked questions and product inquiries. 

This means that customers can get fast and accurate answers to their questions, even outside of business hours.

Computer vision. 

Computer vision is an AI technology that enables computers to recognize and classify visual images. Ecommerce companies are using this technology to improve product search and recommendations. 

For example, a customer can take a picture of a product they are interested in and use an app that incorporates image recognition to find the product quickly.

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Why businesses should consider artificial intelligence 

While AI is still in its nascent stage, the potential uses in business are coming into focus. For ecommerce businesses, the use cases are becoming even more apparent as the online shopping experience continues to evolve.

Better targeting in marketing and advertising. 

AI can mine data to understand the type of customer you’re reaching and how to best connect with them. By creating better customer personas, marketing and product descriptions can improve, as can sales.

Customer retention. 

AI can help businesses understand online shoppers better and what spurs them to take action. This will also help shape how that business engages existing customers moving forward. 

Customer support and customer satisfaction are common areas where AI is helping online retailers and improving the user experience.

Improved automation. 

Embracing automation means optimizing your business. Identifying common tasks that can be handled by a digital solution allows staff to do more impactful work that improves the business. 

AI can also open new avenues for automation, helping with tasks where it could not be leveraged before. 

Efficient sales process. 

AI can be used to identify sales trends and change forecasting to match it. It goes beyond historical data to expand to real-time forecasts based on a host of factors. Then, machine learning will continue to refine and perfect the process.

How businesses are using AI in ecommerce 

The ecommerce industry is increasingly adopting AI technology, leveraging it to produce better customer experiences and more efficient operations. These are some of the ways AI has been used — thus far.


By using AI, ecommerce websites can personalize their customers' shopping experience by recommending products based on their purchase history, preferences, and behaviors. 

This not only helps to improve customer loyalty, but also increases the possibility of making more sales. It can also look at things like search engine queries to better attract new, potential customers.

Pricing optimization. 

Like perfecting sales processes discussed above, AI can optimize pricing to ensure businesses receive the best sales margins. Some products may have seasonal changes or supply chain issues may impact the price of goods. 

AI can take all of this into account and enable dynamic pricing in real time.

Enhanced customer service. 

This is most likely to be seen through enhanced chatbots. Chatbots powered by AI are excellent tools for ecommerce businesses to provide customers with round-the-clock support. 

Chatbots and virtual assistants can help to automate customer service queries, provide answers to frequently asked questions, and even assist with the ordering process. 

This not only reduces the workload for customer service representatives, but also provides customers with a more streamlined experience.

Better segmentation of your customers. 

AI-powered software can analyze millions of data points and provide insights on the most predictable customer patterns, buying behavior, and preferences of each segment. 

This allows ecommerce stores to personalize marketing messages and promotions for each segmented group, ultimately driving more sales and higher revenue —  and that means a better personalized shopping experience.

Improved logistics. 

AI can improve almost any part of the supply chain and fulfillment process. From inventory management to personalized shipping options to automated order fulfillment, ecommerce stores are leveraging AI to reduce waste and get products to customers quicker.

Fraud detection and prevention. 

Ecommerce platforms and businesses are targets for fraud. However, AI-powered fraud detection systems can help to reduce the likelihood of fraudulent transactions. These systems can analyze customer behavior, detect patterns, and even track fraudulent IP addresses. 

This not only helps to reduce losses, but also improves the security and trustworthiness of the ecommerce platform.

More accurate forecasting. 

Forecasting — be it sales, demand, cost of products, or something else — can be difficult. What can improve forecasting is data, which AI can mine for better insights.

Machine learning algorithms can continue to evolve and better understand customer needs.

Implementing AI for online stores

AI shouldn’t be deployed without careful consideration. Ecommerce retailers should have a clear plan around what they want to accomplish and how they’ll meet key performance indicators before using a solution.  

Identify specific use cases.

Before implementing AI, ecommerce companies must evaluate business needs and determine how the technology can help. By defining the business need, the owners can ensure that the AI system they adopt aligns with their business objectives.

Leverage third-party expertise.

Do not enter this venture blind. Use the knowledge of those that have done this before to avoid common pitfalls. Implementation, integration, and optimization are hard, so using outside experts may be wise. This leads to better decision-making.

Utilize internal champions for support. 

Using AI — or any technology, for that matter — is better done if your staff embraces it. Identify internal supporters that will spread the good word on how this will positively impact the company and employees to get better buy-in.

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The final word

AI is maturing, but it is by no means mature right now. Ecommerce companies that embrace AI tools now may be rewarded by being ahead of the curve, but should be mindful of potential road bumps along the way. 

Regardless, in the long run, AI solutions have the potential of fundamentally changing how ecommerce is done. Understanding this now will better position you for the future of online shopping, whatever form it may take.

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