How Artificial Intelligence is Changing the World of eCommerce

By: Denton Dickerson


Artificial Intelligence (AI) is rapidly becoming an integral part of the eCommerce landscape. In 2022, the global AI market size was valued at $136.6 billion. That market is projected to reach over half a trillion by 2024, and $1.8 trillion by 2030! AI is a type of computer programming that enables machines to learn and develop from experience without being explicitly programmed. The combination of AI and eCommerce is transforming the way businesses interact with customers and how they manage their operations. In this blog, we’ll cover how AI enhances eCommerce and discuss some of the challenges that come along with implementing it.


Automation and Customer Service

The impact of AI on e-commerce is far-reaching. Automation is one of the most important areas of impact. AI-powered automation can increase the speed and accuracy of customer service, product recommendation, pricing and scheduling, and other business operations. AI can also be used to create more personalized customer experiences. By analyzing customer data, AI can provide tailored product recommendations and personalized marketing messages to increase sales and customer loyalty. Predictive analytics is another application of AI in e-commerce that can be used to forecast customer demand and optimize product inventory. AI is already being widely used in e-commerce for a variety of applications. Automated customer service, such as chatbots, is one of the most common uses of AI in e-commerce. Chatbots can provide quick and accurate customer service while reducing the need for human customer service agents.


Personalized Marketing

AI can also be used to make product recommendations based on customer data. Many big companies have already implemented AI-based personalized marketing. Amazon saw a 29% sales increase when they started using AI to recommend products to its customer base. Netflix created its own model to predict what shows and movies users might enjoy. Those recommendations won 75% of the time! By analyzing customer data, AI-based product recommendations can be more tailored and precise than manual product recommendations. AI can also be used to optimize pricing and scheduling. AI-based pricing algorithms can adjust prices in real-time to optimize revenues, while AI-based scheduling algorithms can help businesses maximize their resources.



How AI is Changing the world of Ecommerce



Voice and Visual Search

Uttering “Ok Google”, “Alexa”, and “Hey Siri” have become second nature for many of us. Users are beginning to prefer voice search over typing queries in, because who has time for that? In fact, according to Tech Jury:

  • 97% of mobile device users use their AI-powered voice assistants.
  • Over 4 billion devices already work on AI-powered voice assistants.
  • 40% of people use a voice search function every single day.

eCommerce sites are revolutionizing the shopping experience with the use of visual search. Powered by AI, this incredible technology enables shoppers to upload an image of an item they are looking for and receive results of similar products from the company’s catalog. Neiman Marcus is a great example of an eCommerce site that is having tremendous success with visual search. Their visual search application feature, Snap. Find. Shop., allows customers to perform an image-based search and make an immediate purchase. By allowing app users to take photos of objects in the real world, they are then presented with a wide selection of similar items in the Neiman Marcus catalog – making the shopping experience easier and more enjoyable than ever! Neiman Marcus isn’t alone. ASOS, Nordstrom, and Alibaba have all built visual search functionality into their applications. More business will soon follow.



The implementation of artificial intelligence (AI) in eCommerce poses a number of challenges that must be overcome in order to fully leverage its potential. First, AI systems require a considerable amount of data to learn from and make decisions. This means that eCommerce businesses must invest in collecting and organizing large amounts of data from customers, products, and other sources. Additionally, AI systems must be trained to accurately recognize patterns and learn from them in order to tailor experiences for customers and make informed decisions. This requires substantial effort from engineers and data scientists and is often difficult to get right.

Second, AI systems must be constantly maintained and updated in order to remain effective. As customers’ behaviors and preferences evolve, AI systems must be able to adapt to changing trends and customer needs. This requires significant ongoing investments in the maintenance and upkeep of the AI system.

Third, AI systems must be carefully monitored to ensure they are working properly and making decisions that are in line with the goals of the business. This means that businesses must invest in monitoring and auditing systems that can track the AI system’s performance and detect any issues.

Finally, AI systems are often expensive to implement and can require a substantial amount of capital investment. This can be a major obstacle for small businesses and those without the necessary capital to invest in the technology.

In conclusion, AI is quickly becoming a core component of the e-commerce landscape. AI-based automation, personalization, and predictive analytics can help businesses increase efficiency, improve customer experiences, and enhance targeted marketing. However, businesses must be aware of the potential challenges associated with AI, such as cost, security, and data privacy. As AI technology continues to evolve, we can expect to see AI playing an even bigger role in the eCommerce industry in the future.