How AI is Driving E-Commerce Industry in 2020

How AI is Driving E-Commerce Industry in 2020

Artificial Intelligence can do wonders for your eCommerce business. With so much going on in eCommerce, it’s essential to stay on top of things. So, let’s have a look at how AI technology has disrupted the eCommerce industry in 2020.

In the upcoming years, businesses will increasingly put operations on autopilot. The global enterprises are expected to spend hugely on AI-powered automation. According to Statista, “The worldwide AI and process automation expenditures are expected to be $15.4 billion by 2021.”

As eCommerce booms, AI can gradually be the driving force behind it. The best thing about using AI technology in eCommerce is personalization, which was lacking in brick-and-mortars.

AI enables eCommerce sites to suggest products uniquely and allow users to search for products using images or conversational language as similar as they interact with a person. It’s fair to say that AI is the future of the eCommerce industry. 

In this blog post, we’ll explore how AI is becoming a driving force behind the eCommerce industry. 

Let’s dive in and get started. 

Here’s How AI has Disrupted eCommerce 

1. Personalization in customer experience 

AI has dramatically changed the customer experience by providing personalized content. Or, we can say personalization in customer experience is another area in which AI promises more meaningful results. The big names of online retailers, for example: Under Armour, Macy’s On Call, Levi’s Virtual Stylist, all are investing in AI-powered personalization. 

This technology is revamping every area of our lives, such as online shopping, online streaming of music, movies, and TV shows. 

  • AI helps shoppers to search for products online by speaking or using images uploaded from their devices. To put it another way, it helps online retailers boost their word-of-mouth sales and increase customer engagement and loyalty. 
  • Another bonus of AI: Various tools powered by AI analyze the website’s catalog in real-time to serve customers with similar or related products. It provides a seamless and intuitive shopping experience for online shoppers and helps surface the products that customers may potentially want to buy. 

Using personalization in customer experience can significantly boost customer satisfaction and sales. 

2. Predictive Behavior Modeling 

AI helps to anticipate customers’ next move by its predictive capabilities. Here comes into play predictive behavior modeling, which utilizes historical customer data to predict behavioral patterns and future trends. But eCommerce alone cannot drive sales. Along with this, you also need a powerful marketing strategy and a deeper understanding of the consumer to leverage this predictive analysis. 

It can be done individually or for the whole customer base. Such information can be helpful in the decision-making process while determining the next marketing actions like - 

  • Highlighting and taking care of those users who are most likely to convert by bringing attention to their requirements early. 
  • Identify customers who are ready to buy or push them towards the purchase. 
  • Predict the timing when customers are most likely to open your emails and ensure that emails are sent when they are most expected to be seen. 

It’s safe to say that Predictive Behavior Modeling can help businesses convert more customers, increase spending of existing customers, and lessen customers’ conversion time. 

3. Artificial Agents & Chatbots 

Artificial agents and chatbots have already created a boom in the eCommerce industry. Both technologies are computer programs that simulate conversations with human users. There are multiple use cases of chatbots, such as personal finance assistants, customer support, and product suggestions. 

Here’re some benefits of AI-powered chatbots in eCommerce sites: 

  • Product Guidance: eCommerce visitors often get lost in millions of products during online shopping. Bots can help them to find out the desired products. It can guide and provide answers to specific customers’ inquiries and enables them to shop on the fly. 
  • Cart Recovery: Chatbots can subtly remind customers of items in their shopping carts to sustain their interest. Mostly, such reminders allow customers to revisit their carts and push them forward in the buyer’s process. 
  • Multiple client management: Chatbots can manage all the necessary queries at once, whereas humans can only handle a limited number of customers. Using chatbots, there’s no customer left unattended and solving different problems at the same time.
  • 24x7 Availability: By integrating chatbots, customer assistance is available 24 hours a day. It allows companies to monitor customers and traffic even during non-working hours.

That’s why several eCommerce giants have invested in AI. For example, the eCommerce goliath, eBay introduced Shopbot, a smart personal shopping assistant in 2016. It functions as an AI assistant to help its users find products of their interests using natural language.

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In reality, customers use chatbots for a range of services, such as getting product information, customer services, pay bills, etc. With chatbot technology, users can communicate via text, voice, or using pictures taken with their smartphones if it is related to a specific product. 

Apart from eBay, some other popular eCommerce giants such as Amazon, Starbucks have already employed the benefits of implementing AI chatbots. 

4. Inventory Management 

Using AI in inventory management is a great way to meet customer demands without any hassle. AI simply makes inventory management more efficient and predictive. 

It helps forecast future demand based on previous orders. AI warehouse management tool keeps a meticulous update on what’s in stock and what’s not. This technology precisely knows what and when exactly needs to reorder. 

The problem with traditional inventory management software is that it shows only what’s in the warehouse and where it is. However, it would not intelligently manage the stock. 

Unlike traditional software, AI is aware of all the factors that could affect the stock levels. Being an eCommerce retailer, here’re the benefits that you can enjoy from AI: 

  • Fast work
  • Lower labor cost
  • Enhanced accuracy
  • Decreases loss from damaged goods 

Undeniably, AI-based inventory management software is a smarter way to manage your business. 

5. Intelligent Email Marketing 

The opening rate of emails received from an eCommerce site is indeed extremely thin. But this doesn’t necessarily mean that consumers are not interested in receiving emails about discounts and newly launched products. 

The simple logic is that people do not like receiving emails about the products they are not interested in. All you need to do is transform your email marketing strategy. Here’s how AI can help you with the following: 

  • AI automatically sends emails at the right time when recipients may read it. Instead of sounding automated, it also ensures a more ‘human touch.’
  • It also makes real-time changes in the strategy based on customer feedback and real-time interests.
  • AI can make smart and intelligent customer analysis based on the responses. 

In other words, using AI in the eCommerce business can help you to know your customers better. It helps in crafting better plans for email campaigning. 

6. Voice & Virtual Assistance 

AI focuses on offering interactive solutions and provides real-time voice assistance to users. Simply put, AI can help you tap the conversational marketing segment. 

You must have come across virtual assistants such as Google Assistant, Alexa, Siri, etc. Virtual assistance can easily interpret and understand the message of customers. Integrating these virtual assistants with your eCommerce site can smartly allow consumers to make purchases. 

According to the Invespcro, voice shopping is predicted to reach $40 billion in the U.S. by 2022, and more than 30% of U.S internet users have used a voice assistant to look for information and buy products.

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The AI-based voice and virtual assistants have transformed the way we purchase the products online. For instance, Starbucks launched My Starbucks Barista, which allows consumers to use voice for placing orders. It’s based on an algorithm that extracts data from purchase history and customers’ past preferences. Also, the customized data is used to send offers and recommendations to customers. 

Therefore, implementing AI-based voice and virtual assistants in eCommerce sites can prove lucrative for your business.  


AI offers an immense amount of opportunities in an eCommerce world. If you fail to deliver something that your customers are possibly looking for, then the odds are they could choose another brand. 

Want to boom your eCommerce business? The answer is to implement AI during your next eCommerce development. The blend of AI and machine learning into eCommerce websites strengthens its value and makes your business successful in this new era. 

If you want to share your thoughts with us, you can leave your comments below.

Hardik Shah works as a Tech Consultant at Simform, a leading custom software development company. He leads large scale mobility programs covering platforms, solutions, governance, standardization, and best practices.

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