How Ecommerce Businesses Can Maximize Artificial Intelligence


Years ago, artificial intelligence (AI) was only exclusive to scientific research. Nowadays, you can also find AI in the eCommerce industry, as it has become an invaluable tool to many companies in the online space. Numerous businesses use AI to reduce operating expenses, improve analytical insights, and stay ahead of competitors. 

There’s no doubt that AI provides many new opportunities for eCommerce, which is why more and more companies adopt this technology. The growth of AI is at a rapid pace. Its estimated market revenue by 2025 is $126 billion

The AI market has many applications, from machine learning to robotic process automation. In this article, we’ll discuss how AI contributes to eCommerce. 

Artificial Intelligence in eCommerce

How Ecommerce Businesses Can Maximize Artificial Intelligence

Because of the boom of eCommerce, the online marketplace has become saturated and, therefore, more competitive. For your business to rise above the competition, it has to do things smarter and faster.

Here are the different areas of eCommerce and how you can use AI to improve each one of them. 

1. Fraud detection

Fraudsters thrive in the online space, which is bad news for retailers. However, you need not worry if you have AI in place. This technology can help you reduce the risks of fake reviews, forged products, and credit card fraud. 

Fake reviews can bring a great deal of trouble to companies. When buying products, 93% of customers believe they should read online reviews first before purchasing. Having false negative reviews in your customer feedback can drive away a huge chunk of potential customers.

With AI, you’ll be able to identify multiple fake reviews at a time, as it can go through all your current reviews faster than if you were to do it manually. The technology conducts sentiment analysis in distinguishing which comments appear to be fake.

AI can also help you with spotting and reporting counterfeit items. Adopting AI technology in your system can allow you to identify third-party sellers and the kind of products they sell, and if reviews about them are real. 

On the financial side, AI technology can help you prevent credit card fraud. This kind of criminal activity is more common than you think. In 2019, there were 393,207 reports of credit card fraud which is a 44.7% increase from the previous year. AI solutions can detect sophisticated cybercrime techniques by identifying and evaluating patterns using data points. If people’s lifestyles and habits change, AI can adjust to them to avoid false positives.

2. Chatbots 

Many businesses rely on chatbot services, which are AI-enabled messaging apps, to enhance customer support. Whenever you see a “Chat Now” button in eCommerce sites, most likely, the agent you’re talking to on the other side is a programmed bot. They have answers prepared for every question you have.

Nowadays, chatbots are so advanced you can’t even tell the difference between talking to a bot and a human. The experience is intelligent, personalized, and branded. Because of chatbots, businesses can now offer 24/7 customer support. The technology can also track customer behavior and collect valuable data while creating seamless brand continuity and growing conversion rates.

3. Voice search

As eCommerce takes over the retail industry, AI shopping has become more popular over the years. Around 60 million people own a smart speaker in the U.S., and 62% of them use this device to buy something online. Rather than doing conventional shopping, people prefer ordering items through voice search via virtual assistants like Apple Siri, Google Home, Amazon Alexa, or Microsoft Cortana. 

The difference between chatbots and voice assistants is that chatbots are developed and offered by a company. Conversations with chatbots are also usually done through text chat. Plus, chatbots can’t understand human emotions.

Meanwhile, voice assistants are stand-alone solutions that exist in multiple channels. They can also detect emotions from your speech patterns, understand what you’re saying, and even translate languages. 

Since the latter can understand human emotions, people can receive human-like responses when placing orders rather than getting a plain emotionless confirmation. This sense of empathy builds company loyalty and trust. 

4. Personalized shopping

AI can provide personalized customer experiences for eCommerce businesses. You can deeply analyze how your customers interact with your brand. After collecting this information, you’ll be able to engage your customers with personalized offers. Being an online retailer, you know that high customer engagement means more loyalty and conversions for your business. 

An example of this feature is recommendation engines. AI can have sophisticated filtering capabilities that refine your site’s product portfolio. Then, based on customer data, your customers will get relevant and highly specific product recommendations.

5. Inventory management

Many companies in the retail industry are looking for ways to overcome challenges in inventory management, including insufficient warehouse storage space. Here, AI seems to be the answer since according to a 2021 report from Gartner, 77% of eCommerce businesses were ready to incorporate AI into their operations. 

With AI, you can better arrange your company’s internal workflow. The technology can conduct demand forecasts by analyzing the history of purchases and inventory levels. As AI works on predicting sales, you’ll be able to adjust your budget accordingly.

 You can just order the items in demand when you know what your sales will be like for a particular season. This will improve your warehouse management and prevent long-term storage or the expiration of products.

6. Delivery

AI tools in eCommerce can provide customers with enhanced delivery options. AI can calculate the item’s weight and offer the shortest and cheapest shipping method.

Customers will also be able to adjust delivery dates according to their preferences. They can track their orders in real-time and get notifications via text messages or email throughout the shipping process. 

Make AI Work for Your eCommerce Needs

You can leverage your company’s big data by using AI tools. These flexible and powerful solutions will help you learn more about your customer’s buying patterns and achieve new optimization levels.

As eCommerce continues to progress, more and more AI tools will likely develop, so you should maximize their benefits by integrating them into your business today.

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Author: Karl Pulanco is the Product Portfolio Manager for Yondu. He’s into photography which is not surprising as he is a travel junkie as well. While he enjoys working on product planning and custom software development, he has a soft spot for writing and occasionally contributes articles related to his work.