AI in Ecommerce: How Can Artificial Intelligence Empower Online Businesses

Artificial Intelligence (AI) started its journey as a technology that designs and develops tiny robots, used in shopping malls and restaurants to gather visitors’ attention; help with domestic chores or be used for industrial automation in large factories. It has experienced vast transformation over the last decade, as a technology that could revolutionize the way businesses are operated.

In addition to Artificial Intelligence (AI), Machine Learning (ML), Virtual Reality/Augmented Reality (VR/AR) and the Internet of Things (IoT) are making their way into ecommerce industries by offering great business solutions with their technological capabilities.

AI in ecommerce

Increasing digital transactions across the business arena, especially in the world of ecommerce, could be attributed to the need for AI-powered technology to stay ahead of the competition. In the present scenario, leading firms across the world are embracing AI to enhance brand recognition, online marketing and conversion rates. AI has extended its wings as a new source of business with leading tech giants such as Facebook, IBM, Amazon and eBay among others, making public announcements about embracing this technology.

A few AI Statistics and Trends

  • In 2016, Forrester Research had reportedly predicted that AI-related investments would grow by about 300% percent in 2017, contributing to annual profits worth $1.2 trillion and a highly competitive business arena by 2020.
  • On the other hand, in 2011, Gartner had predicted that more than 80% of all customer interactions will be handled by AI by the year 2020.
  • Sentient Technologies, which is said to be the world’s largest-funded AI company, introduced the concept of AI-enabled virtual personal shoppers to allow the users to purchase items that they never knew existed.
  • entientAWARE, an AI-powered ecommerce solution, utilizes computer vision and deep-learning capabilities to deliver accurate and relevant product recommendations for online shoppers.

In this article, we take a comprehensive look at some of the most common uses of the AI technology in ecommerce business, and how leading ecommerce firms are adopting AI-operated technologies.

How can it help an ecommerce business?

There are numerous ways in which AI-powered solutions can transform online retailers and B2B companies across the ecommerce industry on a global scale. This article discusses a few ways in which AI Machine Learning can help ecommerce businesses boost sales and increase revenue.

Customer Service Management

Chatbots: AI finds its importance in online stores’ customer services management by introducing ecommerce chatbots that are programmed to address customer queries and deliver a ‘round-the-clock’ customer service without human intervention. 

Demand Forecasting: These 24/7 operational chatbots also collect customer data, track buyer behavior, provide highly-intelligent analytics that can be used towards demand forecasting, product search rankings and market analysis. 

Ubiquitous Personalization: AI’s machine learning capabilities contribute to better-merchandising placements, deliver a ubiquitous personalization, quick and easy translations, image and voice recognition for faster search results to deliver better conversion rates and a great customer experience for the visitors on ecommerce platforms.

Customer Relationship Management

Data Analytics: Gone are the days when CRM means gathering a bunch of data on excel spreadsheets, spending tedious hours analysing data and generating reports. AI’s CRM capabilities streamline the entire process of data analytics and demand forecasting using AI-powered software that collects, consumes, analyses and organizes the data to scrutinize visitor spending habits, define effective buyer personas, predict buyer trends, and maximise conversion rates.

Marketing Campaigns: Ecommerce businesses use this data to improve their merchandise, retail and delivery operations. AI-powered CRM software can improve the quality of your marketing campaigns, enhance relevant advertising campaigns, and improve the overall customer experience.

Customer Review Management

Fraud Detection: Genuine user reviews help potential buyers make informed purchasing decisions while fake reviews affect the authenticity of the ecommerce platform altogether. However, the ecommerce industry is infected with a million-dollar fake review business that’s pushing a plethora of inauthentic reviews on ecommerce channels to promote a product or to degrade competitor products.

Fake Reviews: AI-generated reviews are said to be “effectively indistinguishable” from the real deal, and certain studies have given a “usefulness” rating of 3.15 by human evaluators, compared to 3.28 for genuine reviews. On the other hand, AI’s machine learning algorithms can be used to fight counterfeit reviews to filter real user feedback on each product.

Customer Engagement

Informed Purchase Decisions: AI-powered machine learning algorithms are programmed to provide ultra-precise product recommendations by creating accurate buyer-product matches based on purchase history and browsing behavior, user demographics and much more.

Accurate Product Recommendations: In 2017, Amazon reported a 30% rise in third-quarter sales worth $43.7 billion, which is attributed to its AI-powered product recommendation algorithms that use real-time online data. Accurate product recommendations contribute to reduced cart abandonment rates, improved market reach, accurate product and deals recommendations to help customers make informed purchase decisions, thus leading to higher conversion rates.

Which companies are already using AI?


  • As an early adopter of AI and Machine Learning, Amazon has reportedly committed investments worth $5 billion towards AI-related research and development in India.
  • Amazon Robotics, formed after Amazon acquired Kiva Systems in 2012, is a subsidiary that is dedicated to research and development in the field of robotics using machine learning, object recognition and computer vision.
  • Amazon Prime Air is an emerging technology that aims to replace delivery personnel with delivery drones that are programmed to ship and deliver packages to the customers with great accuracy. This helps improve delivery efficiency and reduce shipping costs.
  • The success of Amazon Alexa, a digital voice assistant, is another example of growing importance of AI machine learning for voice-based search.


  • Alibaba is expected to spend $15 billion towards AI-related research and development spending over the next three years.
  • In July 2017, Alibaba launched a voice-activated AI assistant named Tmall Genie, that is similar to Amazon’s Alexa in terms of functionality. This is currently available only in China.
  • Alibaba has signed a MoU with NTU Singapore to integrate NTU’s human-centred AI technology with Alibaba’s Natural Language Processing (NLP), computer vision, machine learning and cloud computing to explore further technology breakthroughs and real-life AI solutions.
  • Alibaba’s Zhang mentioned that “we are increasingly efficient in resolving disputes, relying on artificial intelligence based on voice-recognition technology and natural language processing technology.”


  • In October 2016, a pilot version of eBay Shopbot, an ecommerce chatbot accessed through the Facebook Messenger platform was successfully launched.
  • eBay Shopbot utilizes AI technology to assist buyers with precise product recommendations and communicates with the users via text, voice and images.
  • In 2016, eBay acquired 6 companies, 2 out of which – Salespredict and Expertmaker – were reportedly building AI-powered platforms.
  • In July 2017, eBay’s AI search tool was introduced. It uses computer vision and deep learning to compare photos uploaded by the shopper to generate relevant search results from existing eBay listings.

  • Beijing-based has reportedly stated that it’s new business strategy focuses on adopting AI-driven technology to reduce workforce and improve profit margins.
  • The company is also said to have set a target date in November 2018 to launch its first unmanned warehouse where AI and robots will handle jobs related to parcel packing, product sorting and categorisation.


  • UK’s fashion online retailer Asos, has embraced AI, image search features, and voice recognition technology with an aim to influence buyer behavior and improve style & fashion recommendations.
  • The firm is also said to be working on the research & development of an image recognition technology, with the introduction of a visual search capability that facilitates matching user-uploaded images with online merchandise.

Upcoming AI Trends

AI-driven ecommerce business is the future of online retail stores. By 2021, brands that redesign their websites to support visual- and voice-search are expected to experience a 30% rise in digital commerce revenue.

With advanced AI, Machine Learning is already making its way into the ecommerce industry, and the integration of Virtual Reality/Augmented Reality (VR/AR) technology is still at the budding stage. The future awaits the complete integration of VR/AR into ecommerce platforms allowing shoppers to visualize the products and merchandise on a real-time basis to create a better user experience.

How does it benefit customers?

There are so many reasons how an AI-driven ecommerce can improve customer’s online shopping experience, access to authentic products and lowered risk of online fraud. In addition to being a time saver, an AI-driven online retail platform is your personal style and fashion guide, shopping partner and a virtual assistant.


The ecommerce industry is the future of retail, and growing at full pace on a global scale, exhibiting no signs of decline in the coming years. With AI growing to be more and more sophisticated each day, ecommerce businesses need to harness its power to deliver a powerful shopping experience.

AI-driven technology could empower sales teams with never-before-seen information, thrill users with personalised product recommendations, engage sellers with the right prospects, generate leads at a much faster pace, improve brand loyalty, enhance customer experience, and revolutionize the way ecommerce businesses work.

As a strong promoter of technological advances, ecommerce is going to be one of the strongest global businesses making online purchases as simple as taking a selfie.

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