Digital Transformation

The Role of Artificial Intelligence in eCommerce

The Role of Artificial Intelligence in eCommerce

These days, AI is doing —self-driving, self-diagnosis in healthcare, and even self-writing. But what is the role of Artificial Intelligence in eCommerce?

If you have the same question in your mind, read this blog thoroughly to grab the answer.

Let’s kick off our exploration by addressing a common misconception. 

When someone mentions ‘artificial intelligence in front of us, it often happens we envision futuristic robots.

Don’t we? 

You may agree, we do! 

But that’s not at all true. AI application is more than that. Different industries have different use cases of AI. And having an artificial intelligence development company by your side can help you leverage these applications.

Some of the popular applications of AI are already mentioned in the starting paragraph of this blog.

Similarly, in eCommerce, AI has numerous practical roles to play. For example, AI can play the role of a personal shopper for you. Many big companies are already indulging in this. One of them is Amazon.

Amazon is using the power of AI through Alexa to grasp customer demand and deliver personalized product recommendations. 

As a result, it is able to engage customers to spend more time on the website and increase the conversion rate.

Amazon Product Page Dominance

This is something your eCommerce business can also achieve. But only if you hire AI developers with deep knowledge of the latest technologies.

Moving ahead, let’s explore more about AI in eCommerce-

What are the different benefits of Artificial Intelligence in eCommerce?

In the eCommerce landscape, AI serves up a buffet of advantages that can easily be seen around. Let’s first have a look at the statistics:

  1. In a recent report by InsightAceAnalytic, the AI-enabled eCommerce solutions market is expected to be valued at US$ 16.8 Billion by 2030. 

AI-enabled eCommerce solutions

  1. McKinsey’s report on AI adoption in 2021 reveals that AI has been adopted by 57% of respondents in emerging economies.
  2. Approximately 78% of eCommerce brands have already incorporated AI into their online stores.
  3. The market size of the global recommendation engine was worth USD 1.77 billion in 2020 and is projected to grow at a CAGR of 33.0% from 2021 to 2028.

Global Recommendation Engine

  1. According to a recent survey, over half (54%) of French e-commerce companies believe that artificial intelligence is crucial for the analysis of e-commerce data.

With these statistics, one thing you must agree with- AI in e-commerce holds huge potential for all sizes of businesses. Now let’s check the practical benefits of AI in eCommerce that you as a business owner can leverage:

Refined Targeting in Marketing and Advertising.

Speaking of personalization, it’s worth noting that in a recent survey, retailers have expressed that personalization ranks as a top priority. Surprisingly, only 15% claim to have fully implemented personalization across all channels. 

What sets you apart from the crowd? The answer lies in delivering a more personalized message and engaging in one-to-one conversations with your customers.

Thanks to significant advances in AI and machine learning, we can now employ deep personalization techniques that customize content for each user. By analyzing extensive data from purchase histories and various customer interactions, you can precisely serve what your customers desire and convey a message that genuinely resonates with them.

Customer Retention Increase

When businesses send marketing ads and email that are customized to what each customer likes, it can make those customers more likely to stick around. 

According to a study by McKinsey, using this kind of personalization across different channels, like online and in stores. It could boost revenue and keep more customers engaged.  They also say there’s potential for a 10-15% increase.

The study also points out that a big part of this -personalization is getting to know your customers better. That means collecting and understanding more data about them. This data is like a super useful tool that can benefit the whole business chain. The research suggests that investing in personalization is a smart move because it will likely give you a better return on investment compared to traditional one-size-fits-all marketing.

Increased Sales

”AI multiplied our human input, allowing us to smash revenue targets across the whole book of business.”

Said -Sara Furney-Howe, senior paid search director. 

Every online store, whether it’s a small shop or a big one- all of them have a clear goal to turn people looking at their products into actual buyers. 

Think about it – how often have you been online shopping, added items to your digital cart, and then had second thoughts, despite those persistent emails kept on reminding you that your cart is still there? You have missed something on your cart? 

With the help of AI, eCommerce companies do this not only to sell products but also trying to understand customer behavior and preferences to increase sales.

For example- Eva Bossy, Chronopost brand’s head of digital, said: “We multiplied our sales revenue by 85% and improved our profitability despite an uncertain economic scenario.”

Sales Revenue

This was because, in 2022, he conducted thorough testing of AI-driven campaigns just before the holiday.

Prevent From Fraud

The COVID-19 outbreak has seen a significant rise in e-commerce fraud cases. Since the beginning of the pandemic-related shutdowns, approximately 80% of medium-sized and 82% of large online retail businesses have reported an uptick in fraud attempts. 

In 2021, businesses worldwide suffered estimated losses of $20 billion due to e-commerce fraud attacks, compared to $17.5 billion the previous year.

Businesses Worldwide Suffered Estimated

Due to such alarming figures, e-commerce companies have found themselves compelled to ramp up their investments in cybersecurity and fraud protection. 

AI is playing a crucial role in fraud prevention for eCommerce. Where traditional methods, reliant on predefined rules, are insufficient. 

AI-based fraud detection employs unsupervised learning, analyzing vast datasets and millions of transactions to identify patterns in behavioral data. 

This approach offers flexibility and the real-time capability to detect anomalies and suspicious activities. Furthermore, AI also uses advanced data analytics, including IP addresses and device fingerprints, to cross-reference information and prioritize disputes efficiently. 

Moreover, as fraud tactics become more sophisticated, AI is evolving to analyze biometric data like voiceprints and mobile phone angles, thus safeguarding customer accounts from emerging fraud threats. In essence, AI is a powerful ally in the ongoing battle against eCommerce fraud.

Making Visual Search Journey More Efficient

Isn’t it true that the heart wants what it wants? After all, you don’t just fall head over heels for shoes because a friend talks it up, or decides to take the plunge on a dress without considering the fit, style, and occasion. 

Thus, in terms of our buying habits, we humans thrive on experiences, and visuals are one of the most effective ways to create those experiences. 

MIT conducted a study that revealed that the human brain processes 90% of information in a visual format. Also, research says- approximately 85% of consumers prioritize visual information over textual information while shopping online.

Visual Information Over Textual

Considering that, visual search technology is a game changer for the eCommerce industry.

Images, videos, and other visuals can be powerful motivators for having an online shopper to make a purchase. 

Major players like ASOS and Zalando are making use of AI and virtual search technology to simplify customer searches. 

Also, Amazon’s “Virtual Try-On Shoes” that hold AI lets you try shoes virtually using augmented reality, and you can even share these experiences with friends. 

Create Content For Their Brand

E-commerce companies are employing generative AI to streamline their marketing content production and adapt it for diverse audiences. 

Generative AI, like DALL-E, and ChatGPT, creates text, images, or other content in response to prompts. 

For instance, a copywriter can craft a Product description. Marketers can also seek input from generative AI to fine-tune brand messaging and positioning, ensuring alignment with specific customer personas. 

Using AI tools, it is easy for eCommerce marketers to create content for social media posts, emails, ads, and other marketing materials.

Virtual Assistant Implementation

Most of us have used software like Siri, Google Now, and Alexa. What are they? They are virtual assistants.

Such AI-based virtual assistants provide significant benefits to e-commerce across various dimensions. As the global e-commerce market grows, competition intensifies, necessitating innovation and efficiency. Virtual assistants are now considered a must-have tool, enhancing the customer experience and supporting business expansion.

Five key use cases in which virtual assistants prove invaluable include:

  • Product Search: Enhancing product discovery by engaging customers with conversational queries, enabling seamless navigation, and displaying tailored results.
  • Sales and Marketing: Offering personalized recommendations based on CRM integration, past purchases, and active marketing campaigns to boost sales.
  • Customer Engagement: Facilitating active communication, addressing customer queries, and reducing cart abandonment by providing real-time support and information.
  • Purchase and Payment: Streamlining the end-to-end shopping experience, from product search to payment, within a conversational interface.
  • Customer Service and Support: Automating repetitive customer support tasks, such as order tracking and address updates, to enhance efficiency and customer satisfaction.

The application of AI-based virtual assistants is an essential step for e-commerce businesses to remain competitive and meet customer expectations effectively.

Also read: The Future of Blockchain and AI

Closing Note

The role of AI in e-commerce is more important than ever, offering various benefits. It’s great at saving time on routine tasks, enhancing customer experiences, and identifying fake products. AI is incredibly versatile.

What’s more, the introduction of generative AI tools like ChatGPT is changing how brands connect with customers. We get that change can feel overwhelming, and AI adoption might raise questions.

But in our fast-paced world, not moving forward means falling behind. To be in the market, you need to hire an AI software development company who help you in integrating and developing AI solutions.


Q1: How AI is revolutionizing eCommerce?

Ans: AI is changing e-commerce in big ways:

  • Personalized Shopping: AI suggests products you might like.
  • Inventory Control: AI helps manage what’s in stock.
  • Customer Service: Chatbots answer your questions.
  • Stopping Fraud: AI spots and prevents scams.
  • Predicting Trends: AI forecasts what’s in demand.

Transform your eCommerce business with AI


Mahabir is a founder and CEO at ScalaCode who is good at guiding startups, enterprises, and Fortune 500 companies through digital transformation. His leadership has resulted in the development of more than 1300 effective digital products including mobile apps, SaaS products, AI and blockchain solutions. Mahabir's passion for technology, adaptability to emerging tech trends, and visionary leadership qualities have positioned him as an influential figure in the pursuit of digital product investment.