How Artificial Intelligence is transforming the E-commerce Industry

6 min readMay 10, 2019


Accounting for an impressive 35% of its overall revenues, product upselling and cross-selling on the Amazon E-commerce platform is among this retailer’s major success stories. Which technology is driving this mode of conversion? Amazon’s product recommendation technology that is primarily enabled by artificial intelligence or AI.

Apart from product recommendations, artificial intelligence in Ecommerce industry is being utilized by online retailers for providing chatbot services, analysing customer comments, and for providing personalized services to online shoppers. In fact, a 2019 Ubisend study found that 1 in every 5 consumers are willing to purchase goods or services from a chatbot, while 40% of the online shoppers are looking for great offers and shopping deals from chatbots.

While the global E-commerce sales are projected to touch $4.8 billion by the year 2021, Gartner predicts that around 80% of all customer interactions will be managed by AI technologies (without any human agent) by the year 2020.

So, how is AI in Ecommerce changing the shopping experience in 2019? Through this article, let’s see some of the important applications of artificial intelligence in Ecommerce along with some of the real-life industry examples.

How is Artificial Intelligence transforming shopping experience?

The use of artificial intelligence in online shopping is transforming the E-commerce industry by predicting shopping patterns based on the products that shoppers buy and when they buy them. For example, if online shoppers frequently buy a particular brand of rice every week, then the online retailer could send a personalized offer to these shoppers for this product, or even use a machine learning-enabled recommendation for a supplementary product that goes well with rice dishes.

Ecommerce AI tools or AI-enabled digital assistants such as the Google Duplex tool is developing capabilities like creating grocery lists (from the shopper’s natural voice) and even placing online shopping orders for them.

4 Major AI Applications in Ecommerce

While there are multiple benefits of artificial intelligence in Ecommerce, here are 4 major AI applications for Ecommerce that is dominating the industry today.

Chatbots and other virtual assistants

E-commerce retailers are increasingly turning towards chatbots or digital assistants to provide 24×7 support to their online shoppers. Built using AI technologies, chatbots are getting more intuitive and are enabling a better customer experience.

Apart from providing good customer support, chatbots are enhancing the impact of AI in Ecommerce through capabilities such:

  • Natural language processing (or NLP) that can interpret voice-based interactions with consumers.
  • Addressing consumer needs through deeper insights.
  • Self-learning capabilities that help them improve over time.
  • Provide personalized or targeted offers to customers.

Intelligent Product Recommendations

Among the major applications of artificial intelligence in Ecommerce, personalized product recommendations for online shoppers are increasing conversion rates by 915% and average order values by 3%. With the use of big data, AI in Ecommerce is impacting customer choices thanks to its knowledge of previous purchases, searched products, and online browsing habits.

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Product recommendations provide multiple benefits for Ecommerce retailers including:

  • Higher number of returning customers
  • Improved customer retention and sales
  • A personalized shopping experience to online shoppers
  • Enable a personalized business email campaign.

AI Personalization in Ecommerce

Rated among the most effective modes, personalization is at the core of AI in Ecommerce marketing. Based on specific data gathered from each online user, AI and machine learning in Ecommerce is deriving important user insights from the generated customer data.

For instance, the AI-enabled tool, Boomtrain is able to analyse customer data from multiple touch points (including mobile apps, email campaigns, and websites) to see how they are performing online interactions. These insights enable Ecommerce retailers to make suitable product recommendations and provide a consistent user experience across all devices.

Inventory Management

Efficient inventory management is all about maintaining the right level of inventory that can fulfil market demand without adding to 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:

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

Apart from inventory management, AI is enabling warehouse management with the emergence of automated robots that is being projected as the future of artificial intelligence in Ecommerce. Unlike human employees, AI robots can be used to store or retrieve stocks 24×7 along with immediate dispatching of ordered items following an online order.

In addition to transforming the E-commerce industry in multiple ways, AI in the B2B Ecommerce sector is driving a host of innovative solutions. Let’s look at some of the recent industry case studies on artificial intelligence that is impacting this sector.

AI-Enabled Smart Solutions for the Ecommerce industry

AI-based technologies are introducing online shoppers to a range of products that they didn’t even know existed in the market. For instance, AI-based technology company, Sentient Technologies is enabling virtual digital shoppers that can recommend new products for online shoppers based on their personal buying patterns and data insights.

Buoyed by the success of the Amazon Alexa device, this E-commerce giant is introducing Alexa Voice Shopping that lets you review the best of daily deals on Amazon and place online shopping orders with just your voice. What’s more? Amazon Alexa can also provide you with wardrobe tips including the best fashion combinations, and a comparison between outfits on what would look better on you.

AI in the Fashion Ecommerce industry is reducing the number of returned goods purchased through online sales. For instance, the fashion brand, Zara is deploying AI capabilities to suggest the right apparel size (based on the shopper’s measurement) along with their style preferences (loose or tight clothing). This can help the fashion brand to reduce its product returns and improve repeat purchases.

Besides these innovations, AI-powered solutions are transforming the E-commerce industry in the following areas:

  • AI-enabled Email Marketing that sends out marketing emails for products (or services) that are of interest to the recipient. Apart from reading more human than automated, these email marketing tools make an intelligent user analysis based on their response and are more aligned to individual customer needs.
  • AI-enabled Supply Chain Automation that enable effective management of supply chains for E-commerce platforms. Other benefits include enabling business decisions related to vendors, delivery schedules, and market needs.
  • AI-based data analytics tools for the E-commerce sector that provide a host of benefits such as business intelligence, customer profiles, and online sale analysis.
  • Omnichannel AI solutions that are creating a consistent and seamless customer experience across online and brick-and-mortar retail stores. For instance, AI-based omnichannel solutions from Sephora are utilizing a combination of AI and machine learning, natural language processing, and computer vision to reduce the gap between in-store and online customer experiences.


As highlighted in this article, artificial intelligence in Ecommerce is playing a leading role in driving innovative solutions and customer experiences. Some the leading use cases of artificial intelligence in Ecommerce is in the area of personalized shopping, product recommendations, and inventory management.

As an online retailer, are you considering how to implement a working model of artificial intelligence for your business? Designed for AI in Ecommerce startups, Countants is an established data analytics provider that are enabling online retailers with solutions centred around product analytics and E-commerce KPIs.

Originally published at on May 10, 2019.




We build cloud-based data infrastructure & custom analytics solutions for eCommerce companies.