Artificial Intelligence (AI) is not a futuristic concept or something we would still associate with science fiction – it has become an integral part of our daily digital experiences.

There is no difference when it comes to AI in ecommerce: from personalized recommendations to shopping assistance chatbots, AI influences our interactions over various platforms and touchpoints, offering customers personalized experiences.

We should also remember the numerous automation opportunities AI offers for retailers, like inventory management and customer service tasks, saving time and money and reducing human error. In a 2024 report, 69% of retailers reported that their annual revenue grew thanks to AI utilization, and 72% saw a decrease in operating costs. Therefore, it’s clear that AI plays a foundational role in modern ecommerce.

 


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AI in ecommerce

One of the main advantages of AI in ecommerce is the ability to perform many tasks a human would normally carry out—only better and much faster.

Whether sifting through large amounts of data, identifying images, or finding discrepancies in systems and processes, AI will usually beat its human counterpart in speed and accuracy. AI never tires, needs sleep, gets distracted, or gets bored.

Retailers frequently use AI in ecommerce today to predict shopping patterns based on consumer data. This can help retailers maximize their store’s offerings and boost conversion rates.

Besides product recommendations, online merchants use ecommerce intelligence to provide chatbot services, analyze customer comments, and offer personalized services to online shoppers.

By integrating AI into their digital experience, businesses can give customers what they want when they want it, with a personalized experience.

 

9 Uses of AI in ecommerce

1 – AI and pricing in ecommerce

Pricing strategy in ecommerce involves many factors and inputs, traditionally including manual competitive analysis and calculations. Pricing decisions are based on large data sets, which means they’re a perfect application for AI.

Companies like PriceShape provide automated processes that combine internal and competitive pricing with inventory data, all enacted in real time. These continual updates allow companies to employ a dynamic pricing strategy that is scalable, evolving, and tailored to their specific profit targets.

AI also allows you to personalize your pricing. This means you can adjust prices and offers based on the current users on your website and how they behave. You can even change your prices based on global supply and demand. For example, you can increase prices when your competitor’s stocks are running low. Shoppers looking to buy the product right away will often be happy to buy it from your store at a higher price if they can get the item sooner.

2 – AI and fraud prevention in ecommerce

The value of ecommerce fraud is expected to rise by 141% from 44.3 billion U.S. dollars in 2024 to 107 billion U.S. dollars. That being said, finding efficient strategies to prevent fraud can significantly impact your company’s bottom line.

Luckily, AI offers those solutions. AI-based machine learning can spot irregular and suspicious behavior and transactions by analyzing millions of online global transactions.

For example, a customer may have made an abnormal number of orders at a given time, entered a false address in the address fields, or skipped the basic information needed to deliver an order. These details are impossible for humans to spot and evaluate in real time.

AI models can quickly develop complex rules that help prevent the sometimes disastrous outcomes of fraudulent transactions. AI helps protect companies against attempted fraud, which minimizes lost revenue and increases credit acceptance rates.

Read more: Ecommerce security

3 – AI and synthetic media in ecommerce

An important aspect of ecommerce design and development is personalization—surfacing the right products to the right buyers—all based on AI.

A relatively new area of AI-enhanced personalization is synthetic media. Synthetic media refers to images, videos, sounds, or any other form of content that has been generated, edited, or synthesized by AI. In other words, synthetic media content has been automatically created by AI. This includes hyper-realistic AI-generated images and videos, known as “deepfakes.”

There are many applications for synthetic media in ecommerce that can help businesses engage, convert, and retain customers. Examples include image enhancement, content localization, human-like voices, and virtual environments.

Today, the development of AI tools like Generative Adversarial Networks (GANs) and Natural Language Generation (NLG) is making it possible to automate content production almost entirely. The goal is to reduce the time, cost, and friction associated with conventional content production.

4 – Intelligent product recommendations with AI

AI enables an ecommerce website to recommend products uniquely suited to shoppers and allows users to search for products using conversational language or images, as though they were interacting with a person. This personalization of customer experience highlights a limitation of physical stores and shows how AI plays a key role in an increased revenue share of ecommerce in the retail industry.

With big data, AI is impacting customer choices thanks to its knowledge of previous purchases, searched products, and online browsing habits. AI can also use visual data to provide customers with product recommendations similar to ones they’ve already viewed.

AI can make product recommendations in multiple ways. Behavioral recommendations show customers products that other customers have viewed or bought. Shopper-focused recommendations can be personalized based on each customer’s browsing history. And content similarity recommendations can provide products with adjacent features or benefits.

5 – A personalized customer experience with AI

Personalization is at the core of AI in ecommerce content marketing. Based on specific data gathered from each online user, AI and machine learning derive important user insights from the generated customer data.

For example, the AI-enabled tool Boomtrain analyzes customer data from multiple touchpoints, including mobile apps, email campaigns, and websites, to measure their online interactions. These insights enable digital retailers to make suitable product recommendations and provide a consistent digital experience across all devices.

6 – Natural language processing with AI

Natural language processing can help your system understand what your shopper meant if their original search was unsuccessful. This allows your shoppers to use more natural language or dialogue-style terms instead of precise keywords and enhances customer experience.

It can also correct misspellings, add synonyms, or automatically add missing terms. Sometimes, users don’t know what to search for; an AI system can extract a category or concept the search might represent before sending the query to the search engine.

7 – Chatbots and other virtual assistants powered by AI

Chatbots have taken the ecommerce arena by storm, and they’re not slowing down. According to experts, retailers will spend $ 72 billion on virtual assistants worldwide by 2028. Chatbots can play multiple roles during the shopping experience, whether businesses target B2B, D2C, or B2C shoppers.

Chatbots can act as customer service representatives for quick questions or facilitate shopping by providing information and tips. As more businesses migrate to online platforms, chatbots allow retailers to achieve high scalability, collect data, and strengthen the user experience by providing assistance 24/7.

8 – Inventory management AI-enabled

Efficient inventory management involves maintaining the right level of inventory to fulfill market demand without creating idle stock.

Apart from inventory management, AI enables warehouse management with the help of automated robots. Unlike human employees, AI robots can store or retrieve stocks 24/7 and immediately dispatch items for online orders.

While the conventional form of inventory management was restricted to current stock levels, AI-enabled inventory management maintains stock levels based on data related to several factors:

– Sales trends over the previous years
– Projected or anticipated changes in product demands
– Potential supply-related issues that could impact inventory levels

9 – How to integrate AI into your ecommerce strategy

For businesses that are ready to use AI in ecommerce for one or all of the above sectors, it’s important to create a plan of action. We recommend the following steps:

  1. Create a vision and strategy for using AI to drive your business forward. This strategy should be built using your data as a guide. Think about how your data differentiates you from the competition.
  2. Prioritize your AI initiatives within your organization. AI should be at the top of your technology and information budgets to ensure it gets the focus and support it needs to succeed.
  3. Curate the right expertise and skillsets. You can’t trust just anyone with your company’s AI. You’ll need data scientists to build your programs to ensure you capture great data. The most valuable data for AI remains hidden in unstructured or flat files (between 80% and 90% of all data generated worldwide is unstructured). If you don’t have the right quality or quantity of data, the value of AI is limited. Most companies are committed to collecting and storing data but lack the resources and understanding to identify the good from the bad.
  4. With your strategy, budget, and expertise sorted out, it’s time to take action and outline your projects. We recommend focusing on relevant and narrow use cases that are well supported by what your data tells you. Pragmatism and selecting SaaS AI solutions will get you to success the fastest.

 

AI in professional ecommerce roles

AI is already changing many of the classic professional roles in ecommerce. AI can easily replace manual, mundane tasks that digital teams carry out daily.

Any well-defined task that doesn’t require creativity can easily be outsourced to an AI bot. To illustrate what this means concretely, let’s look at ecommerce roles where AI can steal the show.

1 – Category manager

In an ecommerce business, a category manager is a specific category of products; for example, shoes. The category manager oversees the pricing, promotion, and inventory levels. To perform these tasks, the category manager must look at the data. Which shoes sold out? What are the hottest trends in footwear? What’s in stock?

Monitoring this data and basing data-driven decisions on that information is the perfect task for AI. People can’t process information at the same speed and quantity as an AI bot. An AI bot can calculate what to buy, how much, at what price, and when to mark items for sale.

2 – Visual merchandiser

Another example is the visual merchandiser role. Assigning products to the correct category, associating products with categories, deciding what goes where on a web page, and what item to show a website visitor next are tasks where an AI-based solution will outperform humans by light-years. AI will enable you to see brand-new connections.

For example, do you know what will happen if you recommend a specific pair of boots with a particular pair of jeans? AI can make reliable predictions and recommendations based on accumulated data, allowing for unprecedented levels of personalization and conversion optimization.

Other areas in your ecommerce team that can benefit from AI include sales managers, promotion managers, email marketers, and advertising managers.

 

Partner with experts to create a winning AI strategy for your business

As Artificial Intelligence continues to evolve, we can only expect its impact on ecommerce to grow. Implementing AI in your ecommerce business will help you make data-driven strategic choices, optimize for personalized customer experience, and scale your business way faster than you otherwise could.

If you are interested in discovering the opportunities AI could offer for your business or how it could be integrated with your existing strategy, tools, and platform, Vaimo is here to guide and help you through it all.

At Vaimo, we’ve helped over 500 clients to build world-class ecommerce solutions. Contact our team of experts to learn how we can help you make the most of AI and grow your ecommerce business.