The Benefits of Using Artificial Intelligence AI in Ecommerce

The Benefits of Using Artificial Intelligence AI in Ecommerce

Once only a crazy plot device in science fiction, artificial intelligence (AI) is now a reality in the business world.

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And its potential applications in ecommerce are growing every day.

So, what exactly is AI, and how can it help your online store? Here’s a quick overview:


What is AI?

What is Artificial Intelligence? (AI) - AI Time Journal - Artificial Intelligence, Automation, Work and Business

At its simplest, AI is a computer system that can learn and work independently, making decisions based on data.

That might sound like something out of a dystopian novel, but AI is already being used in all sorts of ways, from identifying fraud to providing customer service.

In ecommerce, AI can be used for anything from personalizing the shopping experience to improving product recommendations.

And since AI constantly learns, it’s only natural that it will get better at these things over time.

AI — Breaking into Ecommerce

In the past, AI was used mainly by large companies with deep pockets. But thanks to technological advances, AI is now within reach of even small businesses.

There are two main ways businesses can use AI:

  1. Off-the-shelf Solutions: These are AI services that can be bought and used without any need for coding or technical knowledge.
  2. Custom Solutions: These are AI systems built from scratch and tailored to the specific needs of a business.

Off-the-shelf solutions are usually cheaper and easier to set up, but they may not be as effective as custom solutions.

Let’s take a casual glance at some of the AI services that are available for ecommerce businesses:

  • Automated customer service: Also known as chatbots, these are computer programs that can mimic human conversation. Chatbots can answer customers’ questions, provide product recommendations, and even handle simple transactions.
  • Product recommendations: AI can analyse customer behaviour and generate personalized recommendations for each shopper.
  • Fraud detection: AI can help businesses identify suspicious activity, such as fraudulent orders or unusually high return rates.
  • Personalized shopping experiences: AI can show customers the products and offers that are most relevant to them.
  • Predictive analytics: AI can be used to analyse data and make predictions about future trends. It then uses this information to decide everything from product development to marketing.


Embrace E-Commerce with AI

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Many e-commerce businesses are already using AI to improve customer experiences and generate new leads and sales. 

In 2021, online retail sales amounted to 4.9 billion US dollars and were expected to grow by over 50% in the next four to five years.

As the ecommerce industry continues to grow, AI will play a significant role in its development. 

Still confused about how AI is empowering ecommerce? Below are ten real-life examples of businesses that are already using AI to improve their ecommerce operations:

#1. Alibaba: The world’s largest e-commerce platform uses AI to predict what the customer might want to buy and provide personalized recommendations.

#2. Amazon: The online retail giant uses AI for many things, including providing customer support, making product recommendations, and detecting fraud.

#3. Flipkart: India’s largest e-commerce platform uses AI to improve customer experiences by personalizing their shopping experience and providing guidance.

#4. Alphabet: Google’s parent company uses AI for tasks such as image recognition, voice recognition, and translating languages.

#5. Walmart: The world’s largest retailer uses AI to  improve inventory management and provide personalized recommendations to shoppers.

#6. eBay: The online marketplace uses AI to provide customer support and make product recommendations.

#7. Apple: Apple, one of the world’s most valuable companies, uses AI for tasks such as Siri (the virtual assistant), face recognition, and fraud detection. It even uses AI to recommend songs on Apple Music.

#8. Zara: The fashion retailer uses AI to keep track of inventory and suggest new styles to customers.

#9. Under Armour: The sports apparel company uses AI to provide personalized recommendations and content to shoppers.

#10. Baidu: The Chinese search engine uses AI for many things, including facial recognition, autonomous driving, and translating languages. They have a tool called Deep Voice that uses deep learning and AI to clone a voice in under 3.7 seconds.

As you can see, AI is already being used by some of the biggest names in ecommerce. And this is just the beginning. In the years to come, we’ll see more and more businesses using AI to improve their operations and serve their customers better.


What’s Next for Ecommerce?

How is artificial intelligence helping the e-commerce industry?

The future of ecommerce looks very promising. With the continued growth of the industry and the rise of new technologies, we can expect to see even more remarkable innovations in the years to come.

We expect to see more businesses using AI to improve their operations and better serve their customers. We’ll also see more companies using AR/VR to create immersive shopping experiences. And we’ll see more businesses using drones and robots to deliver orders.

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The possibilities are endless. So, if you’re considering starting an ecommerce business, now is the time to do it. Embrace the future of ecommerce and use AI to your advantage. You’ll be glad you did.

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Now that we know how important AI is for ecommerce, let’s take a look at some of the benefits of using AI in your business.


Benefits of Using Artificial Intelligence in Ecommerce

#1. Get a Virtual Personal Assistant (VPA)

We’re all aware of chatbots taking over the customer service industry. It’s changed the way businesses interact with their customers. 

With the help of AI, customers can ask their queries 24/7 without waiting for a customer service representative to become available. This not only saves businesses time and money but also improves customer satisfaction.

A VPA isn’t just a chatbot. It’s more innovative and more efficient. VPAs are powered by AI and are designed to handle more complex tasks. 

For example, a VPA can help you with product research, order management, marketing, and even accounting. All you need to do is give it a task, and it will get it done.

It will even keep you updated on the things taking place in your organization. This way, you can focus on your work and leave the menial tasks to your VPA.

#2. Focus on Predictive Marketing

If your business performance is not up to the mark, it might be time to think about making some positive changes. After all, the only way to improve your business is to know what your customers want and give it to them.

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Customers love to shop via Facebook and Instagram, both of which use AI-driven algorithms to understand people’s choices. It’s here that predictive marketing and machine learning come in.

Machine learning can help you study past customer behaviour and predict future trends. You can then use this information to improve your marketing strategy and attract more customers.

You can use AI to segment your customers and target them with personalized ads. You can also create dynamic pricing models that adjust prices based on customer demand.

#3. Personalization Can be a Game Changer

Embedding AI in your ecommerce website indirectly means grabbing more eyeballs. Wondering how? The answer is simple – when you personalize your website, you make your customers feel special. You show them that you care about their needs and requirements. That can, in turn, help you build trust and loyalty.

Use AI to study your customer’s buying behaviour and personalize the user experience.

For example, you can use it to recommend products based on past purchases or what’s currently in the customer’s shopping cart. You can also use it to offer customer discounts and relevant coupons.

#4. Improve Customer Service

Start paying attention to customer service. It can make or break your business. Studies show that poor customer service is one of the main reasons why people switch brands.

That’s where AI comes in. AI-powered chatbots can provide customers with 24/7 support, which is crucial for businesses that operate in multiple time zones. Chatbots can also help you reduce customer service costs.

In addition to that, AI can also be used to collect customer feedback and help you understand their needs and requirements.

In addition to that, AI can also be used to collect customer feedback and even help you understand their needs and requirements. 

With the help of AI-powered chatbots, you can provide your customers with an enjoyable and hassle-free shopping experience.

#5. Go for Optimized Search

Every AI expert would advise you to only go for AI after you’ve optimized your website for search engine ranking. That’s because if your website isn’t visible to your target audience, they won’t be able to find it – no matter how good it is.

Search engine optimization should be your top priority, AI secondary. 

You also want to integrate AI into your search capabilities. That will help you provide your customers with relevant search results. You can also use it to study customer behaviour and understand their needs.

#6. Make Use of abandoned Cart Emails

Did you know that 69% of online shoppers abandon their carts? That’s a lot of potential revenue down the drain.

There are many reasons why people abandon their carts. The most common ones are high shipping costs, unexpected fees, and complicated checkout processes.

You can use AI to send emails to customers that abandon their cart to win them back. AI-powered Abandoned Cart Emails are more personalized and relevant, which means they’re more likely to convert.

#7. Pay Attention to Social Listening

Social listening is how you monitor social media platforms for mentions of your brand, product, or service. It’s a great way to understand what people say about you and your business. 

You can use AI to monitor social media platforms and collect data about your customers. You can then use this data to improve your marketing strategy, identify weak areas, and make necessary changes.

Social listening is a great way to understand your customers, provide them with what they want, and, most importantly, make informed product decisions.

#9. Improve Warehouse and Inventory Management

Inventory management is a crucial part of any ecommerce business. If you don’t have enough inventory, you’ll lose out on sales. On the other hand, if you have too much inventory, you’ll incur unnecessary storage costs.

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AI can help you optimize your inventory and fulfil customer orders more efficiently. It can also help you monitor your inventory levels and automatically order more stock when needed. Not to mention, you can track customer behaviour and predict future demand. This information can help you make informed decisions about your inventory levels.

#10. Get Ahead of the Competition

AI is no longer a luxury; it’s a necessity.

 To stay ahead of the competition, you need to make AI a part of your ecommerce business. 

AI can help you automate repetitive tasks, improve customer service, and increase sales. It can also help you understand your customers better and make informed decisions about your product offerings.

Don’t wait – use AI today to give your business the competitive edge it needs to succeed.

#11. AI Offers Location-based Personalization

Location-based personalization is one of the most practical applications of AI in ecommerce. It allows businesses to offer relevant, personalized content and recommendations to their customers based on location. 

That’s especially useful for businesses with a physical storefront and an online presence. For example, if you own a clothing store, you can use AI to send recommendations for items currently in stock at your store nearest to the customer. 

This is just one example of how AI can personalize the customer experience and increase sales.

#12. Dynamic Pricing and Recommendations

Imagine a situation where you have tens of thousands of products. Adjusting the prices manually for each one is not only time-consuming, but it’s also impossible. That’s where AI can help.

AI can be used to adjust prices automatically, based on demand. For example, if you own a hotel, you can use AI to increase prices when demand is high and decrease prices when demand is low. 

It can easily adjust your product prices based on data points such as weather, time of day, day of the week, and events in the area. That ensures that you are always charging the optimal price for your product.

In addition to dynamic pricing, AI can also be used to provide personalized recommendations to customers. By understanding customer preferences and purchase history, AI can suggest products that the customer is likely interested in. 

That increases the chances of a sale and helps build customer loyalty.

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How to Implement Artificial Intelligence into Your Ecommerce Business

Shaping up E-Commerce with Machine Learning | by Nabeel Abdul Latheef | Towards Data Science

The next shiny object is always just around the corner.

Trying to keep up with the latest trends can be tempting, but it’s important to remember that not all new technologies are worth investing in. 

When it comes to AI, however, the benefits far outweigh the costs. Or we could just say you’re at a serious disadvantage if you’re not using AI in your ecommerce business.

That said, here are a few ways you could implement AI into your ecommerce business:

#1. Create a Strategy

Winging your AI strategy is one of the worst mistakes you can ever make as a marketer. You need to know what you want to achieve and how AI can help you get there.

An AI strategy lays out the path you and your team will take to get from point A to point B. 

You don’t want just want to punt everything to the AI and see what happens. That’s a recipe for disaster. Instead, you want to be strategic about it and plan how you will use AI to achieve your goals.

If you’re not sure where to start, here are a few questions to ask yourself:

  • What business goals do you want to achieve? 
  • What specific problems do you want to solve? 
  • How will AI help you achieve your goals? 
  • What data do you need to make your AI strategy successful? 
  • Who will be responsible for managing the AI project? 
  • How will you measure success?

Answering these questions will help create a solid foundation for your AI strategy.

You also want to start small and scale up as you see results. Doing too much at once will only lead to frustration and confusion.

#2. Find Narrow Use Cases

One of the most common mistakes a business can make with AI is going all-in headfast. They try to solve all of their problems with one AI project. That’s a recipe for disaster. 

You want to find narrow use cases for AI and then scale up from there. For example, if you’re a clothing store, you might want to start by using AI to recommend products to customers. 

Once you’ve mastered that, you can move on to other use cases such as dynamic pricing and automated customer service.

Don’t rush into things. Start small and then scale up once you’ve mastered one aspect – one step at a time.

#3. Get the Right Tools

There are a lot of different AI tools out there. It can be tempting to use all of them, but that’s not necessary. You just need to find the right tools for your specific use case. 

For example, if you’re using AI for customer service, you might want to consider a chatbot. If you’re using AI for product recommendations, you might want to consider a tool like Amazon Personalize

There’s no need to overcomplicate things. Just find the right tools for the job and stick with them.

Here are some of the most popular AI tools:

  • Chatbots: Chatfuel,, 
  • Product Recommendations: Amazon Personalize, PredictiveIntent 
  • Dynamic Pricing: Price f(x), PerfectPrice 
  • Automated Customer Service: DigitalGenius, Helpshift

#4. Implement AI Into Your Business Processes

Once you’ve selected the right tools, it’s time to implement AI into your business processes. 

That will vary depending on your specific use case, but there are a few general things you want to keep in mind. 

First, you want to ensure your data is clean and organized. That will make it much easier for the AI to work with.  

Second, you want to train your AI models regularly. That will ensure that they’re always up-to-date and accurate. 

Finally, you want to monitor your AI systems constantly. That will help you catch any errors or issues before they cause too much damage.

Implementing AI into your business processes can be challenging but necessary if you want success.

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#5. Hire an AI consultant

You can always hire an AI consultant if you need help with your AI strategy. Consultants can help you identify use cases, select the right tools, and implement AI into your business processes.

You can find AI consultants on sites like Toptal and or freelancing sites such as Upwork and Fiverr.

Hiring an AI consultant is a great way to get started with AI without having to do everything yourself.

#6. Build a Full-scale AI Solution

Once you’re confident in your AI strategy, you can build a full-scale AI solution. 

That will require more time and effort than the previous steps, but it’s necessary if you want to scale up your AI operation. 

Building a full-scale AI solution will involve things like creating an architecture, training models, and deploying systems.

Building a full-scale AI solution is a big undertaking, but it’s necessary if you want to scale up your AI operation.

#7. Measure Your Results

Once you’ve implemented AI into your business, it’s time to measure your results. 

That’s important because it will help you determine whether or not AI is actually providing value to your business. 

You want to keep a few things in mind when measuring your results. 

First, you want to set realistic goals. That will help you properly assess whether or not you’re meeting your targets. 

Second, you want to track both quantitative and qualitative data. That will give you a complete picture of how AI impacts your business. 

Finally, you want to compare your results over time. That will help you see if there’s a trend in your data.

Measuring your results is essential if you want to determine whether or not AI is providing value to your business.



Artificial intelligence is one of the hottest topics in eCommerce right now. And for a good reason: AI has the potential to revolutionize the way we do business online.

The benefits far outweigh the cost and the challenges, as you can see. Suffice it to say, any ecommerce business that chooses to ignore AI and its potential, risks missing out on a huge marketing opportunity.

Are you ready to take your ecommerce business to the next level with AI? If so, contact an AI consultant today and get started!

About the Author

Tom Koh

Tom is the CEO and Principal Consultant of MediaOne, a leading digital marketing agency. He has consulted for MNCs like Canon, Maybank, Capitaland, SingTel, ST Engineering, WWF, Cambridge University, as well as Government organisations like Enterprise Singapore, Ministry of Law, National Galleries, NTUC, e2i, SingHealth. His articles are published and referenced in CNA, Straits Times, MoneyFM, Financial Times, Yahoo! Finance, Hubspot, Zendesk, CIO Advisor.


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