How Artificial Intelligence is Taking E-commerce Business to the Next Level

E-commerce is booming, and every business, big or small, wants to sell its products on this platform because of the reach it provides. There are big players like Amazon, eBay, and Alibaba, along with small eCommerce platforms. 

With so many competitors, E-Commerce businesses need to differentiate themselves to stand out. Technology is one aspect that can help them stand out and compete. Artificial Intelligence is one such technology that is taking the E-Commerce business to the next level.

The AI-enabled eCommerce market size is projected to reach $16.8 billion by 2030, growing at a rate of 15.7% CAGR in the next eight years.” (Source: Forbes)

In this blog, we will dive deep into how AI is reshaping the Ecommerce business for the better.

So, let’s get started.

You all know what E-Commerce is and probably have purchased something or the other on any of the platforms. But what is AI in E-Commerce? We’ll explore this in detail and see how it is making E-Commerce grow by leaps and bounds.

Applications of AI in Ecommerce

There are several ways in which AI can be used in E-Commerce. However, we will examine some of the popular uses of AI in e-commerce today.


You all must have used the chat now option while you are shopping online. This is the most basic form of AI in Ecommerce. Chatbots are programmed to understand and reply to some of the basic questions. 

However, these days chatbots are getting more intelligent and can answer even not so routine questions. 

Chatbots allow Ecommerce stores to provide 24/7 support to customers, collect data, and track their behavior. 

By having an intelligent chatbot, Ecommerce businesses can increase their conversion rates.

Image Segmentation

AI can not only work with data or text but now also with images and interpret them. AI can now help you find what you didn’t even know the name of. For example, on Pinterest you find a room that you like, and then you are directed to the page called Visually similar Results.

You find someone wearing incredibly nice shoes on the street and you click a photo of the same. You can buy the exact same shoes by uploading the photo on an Ecommerce app, which makes use of AI to find them for you. 

Amazon mobile app has a feature using which, you can point your phone camera to anything in the room and Amazon will capture that and put the same product on your cart. You don’t need to even type or speak a single word for the search; image segmentation AI does all the work for you.

Dynamic Pricing

This AI-feature allows you to rapidly adjust rates in response to supply-demand, forecasts and user behavior. AI helps in predicting the right time to offer discounts, provides dynamic calculations to ascertain the minimum discounts needed for conversions.

In the case of multi-channel retailers, AI offers greater price structuring flexibility. AI can also provides assortment intelligence, which can help with product recommendations, after a particular product has been added to the cart or purchased.

Fraud Detection

AI technology is capable of detecting and preventing frauds through data analysis, real-time transaction monitoring and anomaly detection. AI is capable of recognizing unusual transactions like high-value transfers or multiple transfers from unknown or unexpected locations.

Along with this, Machine learning helps in developing customer profiles based on past transactions, purchases and usage behavior. In case, someone makes an unexpected large-value purchase from an unusual location, an AI model can flag that purchase and report it.

Inventory Management

AI’s can be used for predictive analytics, which is very useful of inventory management. Ecommerce owners no longer have to worry about keeping inventory up-to-date. Keeping the shelves stocked can be a nightmare for any inventory manager. 

AI helps Ecommerce owners in getting information about factors which drive demand and predictive analysis tells what the future demand will be. As an ECommerce firm uses AI & ML, the latter becomes smarter as it learns about the companies, clients and products. With advances in AI, Ecommerce owners will be able to accurately predict, real-time and future inventory requirements.

Customer Relationship Management(CRM)

AI’s biggest advantage is its predictive nature and forecasting ability. CRM used to mean collecting large amounts of data which had to be analyzed by someone to draw inferences out of it. You needed someone who was an expert in Excel pivot tables and charts. 

With AI technology, all the data is collected and analyzed automatically, and important information like who will buy from you, what will they buy and how you can engage them and increase their spending habits. You no longer have to spend huge amounts of money on remarketing and advertising. All you need to do for a CRM is have a good AI tool in place.

5 Advantages AI Provides in ECommerce

#1 Easier to Target Potential Customers

Over the years, ad companies have developed ad campaigns, created a list of target audience, and then presented these ads via different platforms. However, the internet and AI have changed all the dynamics. Customers are presented only with relevant ads on the internet, which improves the perception of a brand.

AI development is also changing the ad creation process with AI bots creating ads for companies. This is a great alternative for small businesses that cannot afford ad agencies.

#2 Reduces Cart Abandonment

A major concern for many Ecommerce businesses is cart abandonment with many of them reporting cart abandonment close to 70% or more. This means a majority of customers add items to the cart and then leave. 

This is heartbreaking for Ecommerce owners who spend so much time and money on bringing them to the website. There are several A tools available which can increase the chances of sales rather than abandonment. They track what is called “ Digital footprints “ to see how they are interacting with the Ecommerce platform and whether they will make a purchase. 

Some AI tools also work to bring abandoned cart customers back. They make use of machine learning to determine which customers would respond to abandoned cart emails or retargeting on the web and come back to make the purchase.

#3 Ecommerce Localization

Ecommerce localization refers to the process of customizing an Ecommerce store to meet the demands of a new market. For this, user preferences, habits, and economic conditions of the new market need to be analyzed. This can easily be done by AI tools, which can collect data and then analyze them to provide inputs.

Another major change, the Ecommerce business will have to make is Ecommerce translation. Customers in the new market may not understand English or any language other than local language. AI-powered chatbots can be used for Ecommerce translation services. An Ecommerce store may hire an Ecommerce localization agency which provides ECommerce localization services.

Payment gateways which are popular in one region, may not be accepted in other regions. An Ecommerce localization service, while localizing the website will integrate the accepted payment gateways in the new region.

#4 Streamlines Various Processes

ECommerce is flourishing with every passing year but it requires a lot of planning, hard work, discipline and ability to foresee the future. Use of AI, streamlines most of the processes involved in day-to-day operations.

AI assists in supply chain management, which involves material procurement, tracking to product delivery. It can also provide updates to customers about the products in transit and when they will get delivered. 

AI tools can also be used for stocking, picking and packing items for delivery to customers. Human errors which creep in repetitive tasks get completely eliminated by automation of these mundane tasks.

#5 Improves Product Recommendations

You just cannot recommend anything and everything to potential customers. Many Ecommerce brands make the mistake of displaying their top items first instead of focusing on what customers want.

AI tools on the other hand try to figure out which item a particular customer is most likely to buy. AI tools are integrated with category pages or even product pages. They can recommend better products, which customers will be happier with. AI can also show how wearables will look on the customer, which makes them more confident about purchasing it.

AI technology can also help a lot with upselling and cross-selling products with smart recommendations.

Wrapping & Packing Up…

So, now you have a clear picture of how AI or Artificial Intelligence is taking Ecommerce business to the next level. It can help in almost all processes involved in running an Ecommerce store, right from product recommendations, payment processing, transit and delivery of goods. 

You can save a lot of time, money and other resources by incorporating AI tools into your Ecommerce business. With Machine Learning, these tools will only get smarter with time and provide better utility. For your Ecommerce localization and translation services, get in touch with Linguidoor.

Author Image

Rishi Anand

Rishi is a Language enthusiast and Founder and CEO of Linguidoor Translation and Localization Services based in Berlin, Germany. He is passionate about the Localization Industry, and he has a keen interest in sharing Insights, News, and development to create awareness, educate, and inspire.


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