4 Ways AI Is Improving the E-Commerce Experience

Artificial Intelligence  

⯀ Machine learning and artificial intelligence are disrupting every industry imaginable. Between 2013 and 2017, machine learning patents grew at a 34 percent compound annual growth rate, the third highest among patent categories. It’s no surprise then that global AI spending is estimated to reach $2 billion this year, and by 2022, expected to jump to $7.3 billion, nearly a fourfold increase.

One of the many industries experiencing rapid change at the hands of AI is the $2.3 trillion and climbing global e-commerce market. From more personal messaging to round-the-clock customer service, let’s look at four ways AI is improving the e-commerce experience.

More Personalized (Less Creepy) Messaging

Have you ever browsed a product on an e-commerce site, then saw an ad for it in your news feed on your next social media jaunt? Were you intrigued, or creeped out? I’m guessing the latter. Bland re-targeted ads aim to be personal but really just feel like someone’s watching us.

Meanwhile, personal recommendations and messaging crafted with our personalities in mind? We love that kind of thing. While most of us have always appreciated a solid recommendation from a friend (e.g. an album recommendation)we love it just as much, if not more, when Amazon does it via a list of products we might be interested in.

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AI affords e-commerce marketers the ability to form deeper customer insights to appeal to individual users instead of broad groups. Through machine learning, patterns are identified to create new, unique personas that otherwise would have gone undetected. Each of these sub-segments can then be targeted with more specific messaging that’s likely to resonate. Applying machine learning to customer segmentation doesn’t provide the context, but instead offers marketers or e-commerce owners the ability to create context from data.

24/7 Customer Service

Customer service remains the most vital aspect of e-commerce success and through AI, companies can do it a whole lot better. Chatbot development has changed the e-commerce game. In addition to chatbots being able to answer consumers’ questions immediately at any time of day, chatbots are crucial data collectors — logging customer interactions and gathering feedback. Machine learning algorithms can use this data to better optimize the customer journey and improve conversion rates.

Better Inventory Management 

Even as AI helps predict customer leads and develops more nuanced customer segments, it helps predict inventory surplus and out of stocks, helping companies optimize their inventory to keep items moving. When 70 percent of consumers would shop at a competitor versus wait for a back-ordered product from their initial choice, keeping timely and balanced product stock is key to maximizing e-commerce revenue.

Imagine the lead-up to a holiday like Halloween if you sell beauty products from home. Due to the popularity of getting into character, cosmetic products are through the roof. But how do you forecast sales to ensure you can meet order volume without filling your house with too much product? AI would use your past sales data and current inventory to predict Halloween’s contribution in overall orders so you can still meet regular demand while boosting inventory for the holiday.

Image Recognition

As if e-commerce wasn’t consumer-centric enough, AI-driven image recognition fills in any convenience gaps. Image recognition ensures we find what we’re looking for as long as we can snap a picture, whether it’s a jacket we see while walking the street or a particular type of sunglasses we don’t know how else to find. If you weren’t a believer in the importance of images in e-commerce conversions, hopefully this is proof enough.


Whether it’s e-commerce or the world as a whole, there’s no shortage of exciting AI applications. In the e-commerce realm, many opportunities seem like a win-win for consumers and merchants alike. What AI-driven e-commerce developments do you have your eyes on? Let us know what you’re planning in the comments section!

By  33rd Square