5 Applications of Artificial Intelligence in E-commerce Industry

Andrea Martinez
August 17, 2022
 Mins Read

Artificial Intelligence (AI) has transformed the technology space irreversibly. Higher efficiency, greater convenience, and cost-saving capabilities make AI an extremely good investment. Amidst high competition amongst businesses, early-bird AI adopters have an unfair edge over their competitors. The e-commerce industry, a vibrant and flourishing space, is no stranger to the transformational power of AI.

Here’s How AI in E-commerce is a Revolution in the Truest Sense: -

  • In 2017, beyond 60 percent of businesses claim using AI tools in some way. Furthermore, a whopping 77 percent of them say they used AI to improve their sales and marketing processes.
  • Close to 20 percent of consumers will consider buying things from chatbots. On average, these customers can at most spend £314.74.

Major Applications of Artificial Intelligence in the E-Commerce Industry

1. Create a Customer-focused Search

Irrelevant search results demotivate customers from a potential purchase. If your customers don't find their product on the first page of your search results, you will lose business. Hence, creating a customer-focused search enhances user experience and facilitates purchases. Fortunately, AI makes it simpler for businesses to build customer-centric searches. Several companies are sprinting towards this opportunity to capitalize on an untapped market.

For Example: -

  • Twiggle uses natural language processing to improve user experience and enable buying.  
  • Clarifai uses AI to focus on visual elements of search results and enables users to buy things they see in photos and videos.

Using imaging and video recognition in searches enhances the chances of clients discovering your product through similar images. Voice and video searches are trendy. Here's how we found that out: -

  • Intent Lab states that over 33 percent of people surveyed used visual searches. A similar percentage used voice searches too.
  • Approximately 60 percent of those surveyed accepted that visual information was more important than text.

2. Improve User Experience through Chatbots

Proper management of customer queries elevates the user experience of your e-commerce business. Letting virtual assistants and chatbots answer general queries saves staff time and also fastens the query resolution process. All huge e-commerce sites use virtual assistants to help customers interact with their sites and understand their policies.

Chatbots improve the impact of AI on e-commerce by using capabilities like: -

  • Natural Language Processing (NLP).
  • Catering to customer demands by using deeper insights.
  • Self-educating capabilities that enhance the future readiness of these tools.
  • Offer specific deals to consumers to enable purchases.

A renowned study states that 60 percent of customers prefer sites, apps, and chatbots to respond to easier queries. Furthermore, experts predict that 80 percent of all businesses will use chatbots in 2020.

If you're not using chatbots, incorporate them into your sites today as it is one of the major application of Artificial Intelligence in E-Commerce

3. Efficient Inventory Management

The rise in e-commerce forces businesses to optimize inventories to facilitates faster product access, improve packaging, and deliver products. Tracking your inventory and stock requirements helps you leverage your supply chain to improve your delivery services. Innumerable product categories complicate manual inventory management and hence, need AI intervention for better performance.

Constantly upgrading Artificial Intelligence in E-commerce businesses enhance the inventory management capabilities. AI also helps bridge the gap between current demand and future requirements successfully.

Here's How AI Improves Inventory Management:

  • Statista states that 44 percent of retail businesses believe AI will improve productivity.
  • A staggering 43 percent reported that AI increases revenue.
  • AI inventory management deployment causes a 32 percent reduction in costs across the operation.
  • 49 percent stated supply chain AI reduced costs.
  • 40 percent realized better retail decision-making as one of AI's most significant benefits.

4. Managing Customer Data

E-commerce platforms deal with enormous data every single day. Their systems need to manage daily sales data, inventory of items sold, the number of orders received, and customer data. Handling such a huge volume is impossible for humans. Hence, AI collects this data in a structured form and also generates accurate insights that simplify general customer behavior and specific buyer patterns as well. Knowledge of these patterns helps e-commerce companies modify their strategy and serve their customers well.

Here's How AI Helps to Manage Customer Data: -

  • 61 percent of professionals indicate AI and machine learning are their firm's most important data initiatives for next year.
  • 59 percent of executives state that AI will significantly improve their big data management.

So, leverage your customer data to provide you better insights and improve your business.

5. Enhance your Sales

Sales processes have evolved from old cold-calling techniques to AI-powered insight-rich tactics. The rising influence of social media and TV ads has coerced companies to leverage these tools to further their sales. Tailoring problem-solving capabilities and creating a strong sales message ensures you reach your customers at the correct time and channel. Integrating AI into CRM software gives you an edge over your competitors. Several NLP features and voice inputs address customer queries, resolve their issues, and even recognize new opportunities for the sales team.

The North Face uses Watson (IBM's AI solution) to improve their understanding of their customers and enable online shoppers to find their ideal product.

Here's How AI Enhances Sales: -

  • AI use reduces costs by 40 to 60 percent.
  • Chatbots will handle 25 percent of all customer service conversations.
  • 30 percent of businesses will use AI for at least one sales process.


"AI is about replacing human decision-making with more sophisticated technologies." – Falguni Desai

We hope this post helps you understand the role of AI in e-commerce. Keeping track of the latest AI trends and adopting them to enhance business processes and ensure future success. So, consider learning how to use AI in e-commerce and retain your customers for a long time.

Article by
Andrea Martinez

Related Blogs

Related Services

No items found.

Blog Categories

Enquiry With Us
Enquire with Us

Enquire with us

Fill out this form to get in touch with our expert team.

Oops! Something went wrong while submitting the form.
Top arrow Icon