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Artificial Intelligence in E-commerce: Online Business Transformation

Artificial Intelligence in E-commerce: Online Business Transformation

Imagine a world where a customer can get from the beginning to the end of the sales funnel without human intervention. All customer service issues, order preparation, and shopping is done with the help of artificial intelligence. It sounds like science fiction, right? The truth is that it is already happening.

AI is changing the game of eCommerce, helping companies to deliver a customer experience that is superior to the one provided by human workers. Its success has led many businesses, including industry giants such as Amazon, to invest heavily in eCommerce artificial intelligence technologies. 

AI Adoption your Organization

Source: Appen

According to the State of AI and Machine Learning Report, artificial intelligence significantly boosts business performance. As we can see in the chart mentioned above, approximately 50% of organizations that have implemented AI into their business processes are ahead of others in their industry, while 44% of them are even with others, and only 3% are still behind others. It is safe to conclude that this is the right path to stay ahead of the competition. But why does it work? Let’s find out.

Artificial Intelligence in E-commerce

Among all the industries, AI is set to change; some say it may impact eCommerce the most. Despite all the hype around AI in eCommerce, many still do not clearly understand how it can benefit eCommerce businesses.

Artificial Intelligence in E-commerce

Source: AI Multiple

Increasing sales and customer satisfaction, improving the shopping experience, and even automatically adapting marketing campaigns to suit different audience segments — AI has the power to do it all! 

With the rise of artificial intelligence, online shoppers will experience a more personalized, streamlined shopping experience tailored to their needs.

At the same time, AI-powered recommendations will provide the right products at the right time, making it easier for customers to find what they’re looking for. Now let's delve deeper into how AI helps businesses.

How Does AI Empower E-commerce?

1. Content Creation

The type of content based on search queries is called “adaptive content” – tailored to fit user needs, intents, and situations. Such content is the result of applying the keyword research and understanding consumer behavior. AI in eCommerce is built to understand human behavior, comprehend context, and provide the next logical step in the content journey. 

AI can automatically identify key trends that marketers would otherwise overlook. This is because AI's machine learning capabilities continuously improve due to the large volume of data it analyzes (on-site and off-site), allowing marketers to gain insights into meaningful information that can fuel their eCommerce activities.

That’s why savvy eCommerce companies use AI to identify important search opportunities and trends, which writers can then create and distribute content around.

When creating your product descriptions, include information that varies from product to product. Not only will this help you to find a better place in Google searches, but it also helps to grow your business by increasing the number of keywords your website ranks for.

2. Marketing Efforts

Keyword research and competitor analysis used to be done manually and take weeks, but now these processes have become automated. Artificial intelligence empowers eCommerce businesses to do all this at the push of a button, allowing you to optimize your website pages for conversion and higher rankings in search engines like Google.

For example, new AI-powered SEO tools like SE Ranking have made it easier to get the metrics you need and understand how your strategy stacks up against competitors. 

This applies not only to keyword research and competitor analysis but also to on-page optimization. An AI-based on-page SEO analyzer examines why your pages aren't ranking high enough so you can fix the issues behind them.

With this tool, you can check whether your content and UX fit the bill, get AI-based insights into how your on-page optimization compares to that of competitors, get an action plan on improving your pages, and much more. Thanks to AI, you'll be able to perform complex processes much more effectively. 

Marketing Effort

Source: SE Ranking

3. Intelligent Virtual Assistants

E-commerce AI virtual assistants can be added to your company website or app to improve your customer engagement, boost your conversion rate and sales, and even support your customers' overall experience. Besides the well-known chatbot, there are three more virtual assistants. Let’s discover all of them:

A chatbot is AI that is trained to interact with humans conversationally, helping them purchase items online. Chatbots can operate in text or voice and use artificial intelligence to talk to users. These virtual assistants don't replace the human element in business but act as support by allowing people to focus on more important tasks.

AI Chatbots

Source: ZARA

A voice assistant is an intelligent virtual assistant with a voice and conversation interface that operates via a spoken natural language. Some examples of this technology are Apple's Siri, Google Assistant, and Amazon Alexa. These tools provide an additional touchpoint for customers and brand advocates, handle complex tasks easily, and provide instant access to relevant information about products and services. 

Voicw Assistant: A Intelligent Virtual Assistant

Source: Slang Labs

An AI avatar is a human-like entity or character of a virtual assistant designed to provide customer service and sales support and is also fun to talk to. They come with multiple personalities and allow users to chat without human intervention. AI avatars can also be used for Virtual Reality (VR) and Augmented Reality (AR) purposes. 

Domain-specific virtual assistants are a new type of AI virtual assistant. They can provide personalized assistance with the skills and knowledge specific to the context in which they operate, with a given intent behind the user’s request.

Nowadays, customers can buy goods and services under one roof without having to travel to different shops, resulting in increased demand. Here, intelligent virtual assistants come in handy since they are vital in leading customers through the sales process. 

Their main role is to assist customers by personalizing their shopping experience and helping them to discover new products and services. 

Moreover, intelligent virtual assistants help businesses engage with customers deeper and enable enterprises to optimize their digital channels. 

VAs have replaced human interaction since they provide faster response times, incorporate customer feedback more effectively into customer service strategies, and even anticipate potential customer needs. This can increase sales by reducing shopping cart abandonment rates and increasing purchase conversion rates.

4. New Level of Personalization 

Whether it is an email, social media, or mobile application, an AI engine continuously monitors all channels to create a universal customer view. This unified customer view enables retailers to initiate new sales channels like chatbots and voice assistants and provide a seamless customer experience across all AI eCommerce platforms. 

Note: AI first brings together many databases, entries, and other pieces of information from different sources. Then, it analyzes this massive scope of data and learns from it, thus ​enabling companies to create a more personalized experience for each customer.

Therefore, eCommerce retailers increase the capability to personalize customer acquisition efforts and improve brand engagement through recommendations based on previous customer preferences and behavioral analytics. 

Using artificial intelligence, eCommerce technology companies like Amazon, Everlane, and Zappos can identify each customer’s needs and offer them the most relevant products at the right time. For example: 

(a) Everlane sends shoppers a series of curated outfits based on their personal preferences for price and style;

Use cases of Artificial Intelligence

Source: Everlane

(b) Amazon uses its AI capabilities to predict what users want next based on past purchases.

Use cases of Artificial Intelligence

Source: Amazon

5. Sales Forecasting 

Sales forecasting is one of the most important elements of every business, but it can also be one of the most difficult. The sales numbers you need to make informed decisions are frequently unavailable, and you may not have enough historical data to generate accurate forecasts. Here is where AI comes into play! 

Algorithms are constantly working to improve the accuracy of sales forecasts along all points of the demand chain—from the beginning, when you’re exploring new markets, to when you're forecasting sales demand based on historical data and projected market trends.

This greatly helps to keep your customers satisfied and minimize stock-outs. AI can predict how much inventory is needed across your distribution centers and shipping routes across various countries or continents. 

After the initial surge in new demand, AI algorithms can identify and adjust inventory levels. They do this by analyzing demand patterns, sales trends, customer purchase behaviors, etc., to predict how much demand there will be over a particular period.

6. Dynamic Pricing 

AI technologies can be used to create comprehensive, dynamic pricing models. This is particularly useful in eCommerce, where many companies offer customers a variety of products and services at different price points.

Dynamic pricing requires vendors to analyze thousands of factors and constantly change the price to reflect the current market conditions, such as the product’s demand and availability, competing products on the market, changes in local tax rates or regulations, and changes in supply costs. 

AI can help make this process a lot more efficient and easier and ensure that your prices stay competitive and relevant by learning which factors influence pricing so that you can correctly price products with different levels of quality.

In short, artificial intelligence takes into account dozens if not hundreds of business factors and offers specific prices to different customer groups with different willingness to pay.

7. AI Helps with Inventory Management 

AI helps with inventory management by automating replenishment and forecasting. It effectively predicts needs, especially when it has access to a wide range of information from many sources. This insight allows sellers to reduce stock-out rates by ensuring that their supply levels are adequate, so they don't have to wait until an item is sold out before replenishing the stock. 

Moreover, artificial intelligence can identify trends, forecast actual demand, and make decisions regarding inventory replenishment based on these predictions. AI also suggests seasonal changes that can help retailers respond to changing market conditions more effectively.

Beyond the basic inventory management functions, this technology is also used to optimize fulfillment processes. For example, AI can help determine the most efficient delivery routes based on factors like weather or traffic volume. 

By embracing AI-powered commerce technologies, retailers can also maintain optimal conditions inside warehouses and deliver products according to customer demands.

8. Remarketing to Potential Prospects

Remarketing is a marketing strategy where an eCommerce business aims to bring prospective customers’ attention back to the brand by showing them additional shopping options. This is done through advertising in the form of emails or banner ads on the Internet and social media.

Remarketing efforts can be based on user data collected by AI-powered dashboards. This way, businesses using artificial intelligence are better positioned to track customer behavior while increasing the likelihood that visitors will engage with their eCommerce site again in the future. 

If the customer was browsing through your website and then left, AI-powered remarketing allows you to capture their attention once more with a more personalized message.

This way, you will be able to engage with users who left without taking action and those who already visited your store but didn’t take any action.


AI has been predicted to have a long-tail effect across virtually all industries, but it is particularly exciting for eCommerce since it can bring many benefits.

Among them are opportunities to make better decisions on inventory management due to correctly predicting customers’ demands, as well as improve customer experience by implementing intelligent virtual assistants and providing a new level of personalization. 

Moreover, artificial intelligence can create comprehensive, dynamic pricing models by analyzing thousands of factors, constantly changing the price. The list can go on!

But one more advantage of AI is that it allows leadership teams to focus on strategy, growth, and innovation while taking care of repetitive tasks, leading to improved performance and the ability to stay ahead of competitors. 

Feel free to implement AI into your business processes to elevate your eCommerce business to a higher spot!

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