How Artificial Intelligence is transforming the E-commerce Industry?

How Artificial Intelligence is transforming the E-commerce Industry

Product upselling and cross-selling on the Amazon E-commerce platform is one of this retailer’s key success stories, accounting for an amazing 35 percent of its overall revenues. What technology is driving this conversion mode? Artificial intelligence (AI) is the primary enabler of Amazon’s product suggestion technology.

Apart from product suggestions, online merchants are using artificial intelligence in the Ecommerce business to provide chatbot services, analyze client feedback, and provide tailored services to online customers. In fact, according to a 2019 Ubisend survey, one out of every five consumers is willing to buy products or services from a chatbot, and 40% of online buyers are seeking amazing bargains and offers from chatbots.

While worldwide E-commerce sales are expected to reach $4.8 billion by 2021, Gartner expects that by 2020, AI technology will manage roughly 80% of all consumer contacts (without the use of a human agent).

So, how is artificial intelligence (AI) in eCommerce affecting the purchasing experience? Let’s look at some of the most essential uses of artificial intelligence in ecommerce, as well as some real-world business examples, in this post.

How is Artificial Intelligence transforming the shopping experience?

Online sales are being transformed by artificial intelligence by predicting shoppers’ buying habits based on the products they buy and when they buy them. An online retailer can, for example, use machine learning to suggest a complementary product that goes well with rice dishes if customers frequently buy a certain brand of rice every week.

AI-enabled eCommerce tools like Google Duplex, a tool for creating grocery lists from shoppers’ natural speech, are developing capabilities such as placing online shopping orders and creating grocery lists for shoppers.

4 Major AI Applications in E-commerce

While artificial intelligence can be used in a wide variety of ways in eCommerce, here are four of the most popular AI solutions that are currently dominating this market.

Virtual assistants and chatbots

As e-commerce retailers seek to provide 24/7 support to their online shoppers, they are increasingly turning to chatbots and digital assistants. Chatbots are becoming more intuitive and are enabling better customer experiences through the use of artificial intelligence.

Among other functions, chatbots enable AI to increase the impact of eCommerce through features such as:

  • Voice-based interaction with consumers can be interpreted by natural language processing (NLP).
  • Providing deeper insights into consumer needs.
  • They can improve themselves over time by self-learning.
  • Customer offers that are tailored to their needs.

Recommendation of intelligent products

Personalized product recommendations are increasing conversion rates by 915 percent and average order values by 3 percent among eCommerce applications of artificial intelligence. AI in eCommerce is making a significant impact on customer choices thanks to its knowledge of previous purchases, searched products, and online browsing habits, which are based on big data.

The following benefits can be gained by Ecommerce retailers from product recommendations:

  • Customers who return more frequently
  • Increased retention and sales of customers
  • Online shopping made personalized
  • Make business emails more personalized.

AI Personalization in Ecommerce

Ecommerce marketing’s core technology, personalization, is one of AI’s most effective modes. By generating customer data from specific data gathered from online users, AI and machine learning in e-commerce are developing important insights into customer behavior.

Boomtrain, an AI-powered tool, can analyze data from multiple touch points (including mobile apps, email campaigns, and websites) to measure how customers are interacting online. Retailers can use this information to provide recommendations for products and provide a consistent experience across all devices to customers.

Managing inventories

It is crucial to maintain the right level of inventory in order to satisfy market demands without adding more inventory to idle stock.

The conventional approach to inventory management only considered current stock levels, whereas AI-enabled inventory management allows for estimating stock levels based on various factors, such as:

  • Trends in sales over the last few years
  • A change in demand for a product that is projected or anticipated
  • Stock levels could be affected by supply-related issues.

As AI advances, automated robots that are projected as the future of AI in eCommerce are enabling warehouse management, in addition to inventory management. Artificial intelligence robots have many advantages over human employees, including the ability to store and retrieve stocks 24 hours a day, 7 days a week, along with the ability to dispatch items immediately after online orders.

Artificial Intelligence in the B2B Ecommerce sector is driving multiple innovative solutions in addition to transforming the industry in multiple ways. The following are some case studies of artificial intelligence in the past year that have impacted the sector.

AI-Enabled Smart Solutions for the Ecommerce industry

A range of products that online shoppers didn’t even know existed on the market are now available to them through AI technology. Sentient Technologies, an AI-based company, creates virtual digital shoppers that can recommend products based on their shopping patterns and data insights to online shoppers.

This E-commerce giant, profiting from the success of its Alexa device, has introduced Alexa Voice Shopping, which allows consumers to review and order items online with just their voices. There’s more. In addition to wardrobe recommendations, Alexa can also show you what looks good on you based on outfit comparisons and best fashion combinations.

The fashion e-commerce industry is benefiting from artificial intelligence by reducing the number of returns. The fashion brand Zara, for instance, is deploying AI capabilities to help shoppers find the right size (based on their measurement) and style (loose vs. snug clothing). Fashion brands can benefit from this by reducing product returns and improving repeat sales.

Artificial intelligence is transforming the E-commerce industry not only with these innovations but in the following areas, too:

Marketing emails are powered by artificial intelligence and are geared towards products (or services) that the recipient will find of interest. Apart from reading more naturally than automated software, these email marketing tools also make intelligent user analyses that take into account their responses and tailor the email to the specific needs of the customer.

E-commerce platforms are enabled to manage supply chains more effectively with AI-enabled supply chain automation. Business decisions can also be influenced by information on vendors, delivery schedules, or market challenges.

E-commerce companies benefit from the use of AI-based data analytics tools to gain insight into their markets, their customers, and their sales.

Solutions that integrate AI into online and brick-and-mortar commerce to optimize the customer experience. A combination of AI and machine learning, natural language processing, and computer vision is being used by Sephora to deliver omnichannel solutions that reduce the gap between customer experiences in-store and online.


Artificial intelligence’s role in driving customer experiences and innovative solutions in eCommerce is discussed in this article. Personalized shopping, product recommendations, and inventory management are just a few of the common uses for artificial intelligence in eCommerce.

Would you like to know how to implement artificial intelligence for your business as an online retailer? Countants is an established data analytics company that offers AI solutions for eCommerce startups through solutions centered on product analytics and KPIs for eCommerce.