News & Insights

How is AI being used in Ecommerce?

30 Aug 2023

Sophie Robson

Head of Innovation

2 minute read


Artificial Intelligence (AI) stands as a revolutionary force In the rapidly evolving e-commerce landscape, reshaping the way businesses engage with consumers. From personalised shopping features and efficient inventory management to predictive analytics and chatbot customer service, AI's impact on e-commerce is unquestionable. This blog delves into the many benefits that AI brings to e-commerce companies by harnessing the power of machine learning, data analysis, and automation. 


What are the Benefits of Using AI in Ecommerce companies?

More and more e-commerce companies are recognizing the benefits of using Artificial Intelligence to improve and optimise user experience and logistics. Some of the advantages of AI include but are not limited to-

Efficient targeted marketing and advertising: According to surveyed retailers, personalization is top priority across channels. Companies who are able to offer a user-experience tailored to their preferences based on user profiles stand the chance to engage with customers on a one-on-basis, lending a more personal appeal to the company-customer transaction.

Improved customer retention: The McKinsey omnichannel personalization research indicates a 10-15% increase in revenue and retention from omnichannel personalization strategies, as opposed to the ROI on traditional mass marketing.

Seamless automation: Dedicated to minimise human intervention, AI enables automation of repetitive tasks like product recommendations, loyalty discounts, and low level support- all important aspects of keeping an online store running smoothly. 

Smooth sales process: AI can tremendously improve the sales process by gathering background data and automating follow up communication about abandoned cart inquiries among other things. Customers can also engage with chatbots for simple questions, ensuring a smooth journey through the purchase funnel.


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1. AI use cases in Ecommerce

AI is a great tool that is helping redefine customer journeys on E-commerce. Six of the most common ones include-


2. Personalised product recommendations.

Based on their online shopping preferences, purchase history, and look alike customers, AI is able to collect and process customer data to offer personalised product recommendations. 


3. Pricing optimization.

AI-driven dynamic pricing involves the approach of adjusting the cost of your product according to shifts in supply and demand. Through the use of appropriate data, modern systems can forecast optimal times for price and discount adjustments to secure sales.


4. Enhanced customer service.

AI virtual assistants and chatbot technology provides 24/7 customer support. Although these bots are not entirely independent, they can streamline basic transactions, allowing human support agents to dedicate their attention to more complex matters.


5. Customer segmentation.

Enhanced access to business and customer data, along with increased processing capability, is empowering e-commerce businesses to gain deeper insights into their customers and spot emerging trends more effectively. This enables marketers to establish parameters and enable AI to learn and fine-tune its performance for precise outcomes.


6. Smart logistics.

Smart/Intelligent logistics use real-time information to forecast transit, demand, and any delays in shipment. 


7. Sales and demand forecasting.

For those wanting to plan inventory on both current and historical data, AI can help monitor and react to shifts in consumer demand that can be utilised for targeting marketing and optimal pricing. 

AI is dedicated towards improving user journeys, increasing conversion rates, and helping streamline sales. To implement AI technology solutions into your E-commerce business, contact Crowd.

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