What is Artificial Intelligence? How AI is Transforming Ecommerce

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    In the eCommerce industry, AI revolves around algorithms and learning technologies that serve as the base for automation and more.

    AI can help the online retailers of today to provide the best customer and customer experience and to make informed business decisions based on information from customers. In this post, we’ve discussed practical and effective ways that eCommerce companies can use AI to enhance their online shopping arena.

    definitions of artificial intelligence

    What is Artificial Intelligence?

    “Artificial intelligence” is a broad term to describe any computer software that performs human-like tasks such as planning, learning, and solving problems. When we refer to specific software as “artificial intelligence,” it is like calling the car” vehicle “vehicle” – it’s technically accurate but does not address any of the particulars. Therefore, we need to look further to know what kind of AI is most prevalent in the business world.

    How is artificial intelligence transforming the shopping industry?

    According to an Accenture study, AI could improve profitability by 38% on average across 16 industries in 2035.

    AI is particularly beneficial to the retail industry due to its immediate impact on two key areas that will majorly impact retail eCommerce: providing a highly personalized shopping experience and making business choices.

    Artificial intelligence is also helping e-commerce platforms meet the demands and interests of their customers. With open-source eCommerce platforms such as WooCommerce and Magento accessible, you can easily incorporate Artificial Intelligence (AI) tools into Ecommerce Marketing.

    Benefits of Artificial Intelligence in Ecommerce

    There are many applications in eCommerce that make use of AI, and you’re likely familiar with many of them. However, you may not realize that the technology they’re based on relates to AI. Here are the six most commonly used:

    1. Individualized product suggestions.

    It’s now easier to gather and analyze customer information regarding their online shopping experience. In addition, artificial intelligence is being utilized to provide specific product suggestions in response to past customer behavior and the behavior of lookalike customers.

    Websites that recommend products that you might enjoy using previous purchases use machine learning to study your purchase history. Retailers use machine learning to gather information, analyze it and then use it to provide an individual experience, create marketing campaigns, improve pricing, and gain customer insight.

    As time passes, machine learning will require less and less participation by data scientists in all types of applications used in e-commerce businesses.

    2. Pricing optimization.

    AI-enabled dynamic pricing is a technique for changing your product’s price according to demand and supply. With the correct information, the latest tools can anticipate when and how many discounts to offer while calculating the minimum discount needed to make a sale.

    3. Customer service has been improved.

    Customer service
    What is Artificial Intelligence? How AI is Transforming Ecommerce 4

    Through chatbots and virtual assistants tech, your business can give the appearance of more personal customer service. Although they aren’t 100% independent, they can help with easy transactions, making live support agents able to concentrate on more complicated problems.

    Virtual agents also benefit from being accessible all hours of the day, meaning that any minor concerns and questions can be resolved any time of the day without having to make your customer be waiting around for an answer.

    4. Customer segmentation.

    Access to more customer and business data and processing capabilities allows e-commerce companies to better understand their customers and spot emerging trends faster than ever.

    An analysis from Accenture Accenture says, “AI systems can explore the most complex and diverse possibilities for customer engagement quickly and continually improve their capabilities as more data becomes available. Marketers can also define parameters, and let the AI to improve and learn to improve its performance.”

    5. Intelligent logistics.

    According to an article from Emerging Technology Brew, “Machine learning’s predictive powers shine in logistics, helping to forecast transit times, demand levels, and shipment delays.”

    Intelligent logistics, also known as smart logistics, is all about using real-time data via RFID tags, sensors, and other similar technologies to aid in managing inventory and better-predicting demand. In addition, machine learning systems get smarter as time passes to make better forecasts for their logistical and supply chain processes.

    6. Forecasting demand and sales.

    Particularly, in the context of and following COVID-19, it is important to make your inventory plan based on historical and real-time information. Artificial Intelligence can help you accomplish this. A recently released McKinsey report suggests that investing in real-time analytics of customers will remain crucial to track and responding to shifts in consumer behavior that can be utilized to optimize prices and targeted advertising.

    4 Major AI Applications in E-commerce

    There are numerous advantages that artificial intelligence can bring to E-commerce. Here are four major AI-related applications to E-commerce that dominate the market today.

    Chatbots & virtual assistants

    Online businesses are shifting to chatbots, or digital assistants, to offer 24/7 support to online customers. Based on AI technology, chatbots are becoming efficient and are providing an improved customer experience.

    AI-Assisted Product Recommendations

    artificial intelligence
    examples of artificial intelligence

    One of the main uses of Artificial Intelligence in Ecommerce is personalized recommendations for online shoppers, which have increased sales conversion by 9155% and the average value of orders by 3 %. Furthermore, through massive datasets, AI in Ecommerce can influence the choices of customers because of its knowledge of purchases made in the past, searches for products, and online browsing patterns.

    Product recommendations offer multiple advantages for retailers who sell on eCommerce. These include:

    • More customers returning to the store
    • Increased customer retention and sales
    • A customized shopping experience for shoppers on the internet.
    • Set up a custom corporate email campaign.

    AI personalization in eCommerce

    Considered to be among the most efficient methods, personalization is at the heart of AI-based marketing in eCommerce. Based on specific data collected from each user who visits the site, AI and machine learning in eCommerce can provide crucial insights about users from created customer information.

    For instance, the AI-enabled tool, Boomtrain, can analyze customer information across different interaction points (including applications for mobile devices, email campaigns, and websites) to determine how customers interact online. These insights help eCommerce retailers to make appropriate product recommendations and offer an identical user experience across devices.

    Inventory Management

    A successful inventory management system is about keeping the appropriate level of inventory that meets market demands without adding idle stock.

    While the conventional form of inventory management was restricted to current stock levels, AI-enabled inventory management is enabling how to maintain stocks based on data related to:

    • Trends in sales over the last years
    • Expected or projected changes to the demands for products
    • Supply-related issues could affect the levels of inventory   

    Best AI tool for eCommerce  

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    What is Artificial Intelligence? How AI is Transforming Ecommerce 5

    1. Granify

    Granify provides simple and fast machine-learning revenue optimization for store owners. It works straightforwardly. When your customers browse your online site, Granify collects around 500 daily behavioral data points. Then, it uses this information to evaluate it against billions of other consumer behavior patterns to determine the customer’s probability of conversion.

    2. Seventh Sense

    Seventh Sense is an artificial intelligence program that can boost the effectiveness of your marketing emails. It also can increase the engagement of your online store.

    It is a great AI software for email marketing that could help you in a variety of ways. For example, email inboxes can be so noisy that you must get your message out of the noise by using artificial intelligence to manage your email messages and provide statistics.

    3. Choice.AI

    Choice AI allows you to create customized eCommerce landing pages and intelligent banners in real time. For top-line growth, retailers boost sales through massive discounts and promotions all over the place, putting a significant strain on profit. Choice.AI can help you create more sales through personalization rather instead of throwing discounts.

    4. ProProfs ChatBot

    The ideal solution for getting leads, simplifying the process of prospecting sales, and improving customer support by giving instant answers to customer questions.

    ProProfs chatbot can simultaneously assist your business in streamlining customer support and marketing efforts. The tool lets you take leads and then interact with them in a natural chat, seeking out information they need and also answering commonly asked questions. Learning how to set up and set up this chatbot software is not essential.

    5. PriSync

    Prisync is a price monitoring and tracking software. It reduces the time you have to track the prices of your competition and inventory availability. Optimization of pricing can be accomplished simply by looking through the information. They analyzed around 4.5 billion in prices on a daily basis. It is suitable for all types of online companies.


    In the end, machine learning and AI will revolutionize the eCommerce industry in the coming years, but it’s impacting the present. AI is a major factor in providing better customer experience and new solutions to eCommerce. Shopping recommendations for products, personalized experiences, digital assistants, chatbots, and voice searches are a few of the most notable applications of AI in eCommerce.

    With the aid of AI and the data gathered from businesses and customers, eCommerce companies can make informed decisions by using the data more effectively to forecast future performance and alter their marketing campaigns in line with the forecast.

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