Artificial Intelligence

Artificial Intelligence in E-commerce

Mubarak Musthafa | Last Updated on : March 24, 2023

Ecommerce Artificial Intelligence

We are already aware of Artificial Intelligence (AI) as a cutting-edge technology, in which machines imitate human intelligence artificially. Things are becoming more interesting with artificial intelligence being implemented in different business sectors. It is not surprising that the e-commerce industry is using artificial intelligence not just for increasing sales but also to provide a better customer experience. Even e-commerce giants like Amazon have also adopted artificial intelligence applications in product recommendations and this resulted in an increase in Amazon’s overall revenue by 35 percent. Hereby, it is proved that the application of AI in the e-commerce industry has contributed to many benefits.  

AI applications in E-commerce 

The E-commerce industry is facing a great transformation with the use of artificial intelligence in online shopping, as it predicts the shopping pattern based on the customer’s purchase. Here are some major applications of artificial intelligence in e-commerce. 

Chatbots and virtual assistants 

Today there are no time restrictions or limitations in shopping as whatever we need can be ordered online and will be delivered to our doorsteps. We don’t have to wait in a long queue to get customer support. E-commerce platforms are providing 24/7 customer support and a hustle-free shopping experience with the help of digital assistants or chatbots. Since these support assistants are built using AI technologies, they are artificially trained to assist customers in the same way human agents do. Chatbots improve customer service. Other than customer support, they also offer other benefits, like: 

  • Comprehend voice-based commands from customers using Natural Language Processing (NLP). 
  • Address customer requirements through in-depth insights. 
  • Improves functionality through self-learning. 
  • Give customized or selected offers to consumers. 

Product recommendations  

One of the notable applications of AI in the e-commerce industry is personalized product recommendations to consumers. AI gives customized product recommendations to customers based on their previous search history, purchases, most browsed products, and browsing habits. As a result, the conversion rate has spiked up to 91.5% and the average order value to 3%. The benefits of product recommendations include: 

  • Increase in the number of customer returns. 
  • Increase in sales and customer retention. 
  • The customer gets a personalized shopping experience. 

Inventory management  

Effective inventory management involves the exact level of inventory maintenance that can meet market conditions without moving to unused stock. Unlike the conventional form of inventory management which was restricted to the prevailing stock levels, AI-induced inventory management enables you to keep track of data based on: 

  • Previous year’s sales trends. 
  • Expected or projected changes in the demand for products. 
  • Issues related to supply may affect the inventory level. 

Other than inventory management, AI also facilitates warehouse management where automated robots are being built to improve the future of the e-commerce industry. 

AI personalization  

When it comes to e-commerce marketing, personalization plays a major role and is rated as one of the most effective tools. Based on specific data collected from each user, Artificial Intelligence and Machine Learning in e-commerce gain important user statistics using this customer data. Boomtrain is an example of such an AI-enabled tool that is capable of analyzing customer data from different platforms like email campaigns or websites or mobile applications. These statistics help e-commerce retailers provide relevant product recommendations and a stable or uniform user experience throughout every device. 

Benefits of AI application in e-commerce 

As we have discussed the applications, here are some important benefits that accompany AI applications in e-commerce.  


With the help of AI technology and algorithms, robots allow retailers to deliver to the customers whatever they want whenever they want something. With the expansion of companies and businesses all over the world, the e-commerce industry continues to grow with a large number of customers. This growth automatically increases the number of repetitive job launches of new products in multiple channels, providing discount offers to customers, etc. which in turn demands automation to be taken as a top priority feature that needs more investment in e-commerce stores.  

Retarget potential customers  

As per the reports of Conversica, the sales team fails to follow a minimum of 33% of marketing leads. This indicates that many of the potential customers interested in a product are left behind and due to excess unmanageable data, most teams are unable to perform relevant actions. This is where AI becomes a game-changer. Artificial intelligence helps in developing an impactive sales message that grabs the attention of your customers at the right time and designing solutions for your problems, thus increasing the sales cycle.   

Filter fake reviews  

Customers always go through the reviews before making a purchase. This is a common customer behavior through which customers try to analyze the value of the product they are planning to buy. Fake reviews are always a headache for online as well as e-commerce shops. It is found that negative reviews have influenced almost 86% of customers’ decisions. The possibilities of fake reviews put by competitors, bots, and paid review writers are very high. All of these affect customer purchases. Artificial intelligence is used by many e-commerce businesses to defend their businesses with more focus on verified reviews. One of the best examples is Amazon using artificial intelligence to counterfeit fake reviews and increase their 5-star ratings. They focus on important reviews of purchases made by verified customers and promote them.  

After-sales service  

Selling products and increasing sales alone cannot help your business grow. You need to extend your service even after the sale. This includes giving assistance in returning a product, replacements, and installations, answering customer queries, checking customer satisfaction, etc. All these procedures can be easily managed by artificial intelligence. AI identifies whenever the delivery of a product, sends feedback forms to customers, notifies them to fill in the form, and asks them to rate the purchase and review it to offer better services in the future. 

Wrap Up 

Artificial Intelligence has proven its capability in many other areas before, but implementing AI technology in retail or e-commerce can bring out the best outcomes for growth in the overall business revenue as well. As per the reports revealed by a Forbes article, more than half of marketers are planning to adopt AI technology in their business within a few years. 

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Mubarak MusthafaVP of Technology & Services at ClaySys Technologies

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