Seven Ways to Use Artificial Intelligence in E-Commerce

AI is more than just the wildly popular generative tools like ChatGPT; it also includes natural language processing (NLP), data mining, and machine learning systems that work behind the scenes of website automation, customer service bots, search results, and more. You’ve probably encountered these AI tools while shopping online without realizing it.

In e-commerce industry, these skills can improve the shopping experience for customers, as well as the productivity and profitability of online stores for business owners. When it comes to business operations, there are many ways to leverage AI, and seven of the most common are outlined below.

1. Personalized product recommendations

No matter where you shop online, you’ve probably come across product recommendations. They’re a common feature in e-commerce stores that help you find what you’re looking for and upsell other products to increase the size (and price) of your order.

AI integrations enable tailored product recommendations to your needs by analyzing and predicting your shopping habits based on past purchases, searches, products viewed, and the behavior of similar customers (customers with similar shopping habits and purchase history as you).

The impact of these personalized recommendations is significant and increases revenue by over 30% on average. It is so powerful that almost 50% of shoppers purchased recommended items despite not initially intending to buy them.

2. Improved site search

Until recently, search engines relied on keywords to get results. This method of searching required knowing the exact name of the item you were looking for and typing it correctly if you wanted to get useful results. Today, search engines rely on natural language processingwhich is much more intuitive for our queries — and lenient on spelling.

With natural language processing, your e-commerce site’s search results will be based on what you enter, including synonyms, missing words or phrases, and correct spellings. By taking these additional elements into account when sorting your data, your results are much more relevant and much more likely to lead to a sale.

3. Customer service

Customer service is essential for e-commerce operations. Whether processing reviews or resolving issues, chatbots can take many customer inquiries and resolve them without the need for human intervention.

Chatbots incorporate many aspects of AI systems, including NLP and machine learning. Similar to how customer discovery works, an NLP system will enable the chatbot to understand what the customer is asking for, and the machine learning system will search through the available data to provide the correct answer.

The time savings that such a tool provides are invaluable in business activities, but it also has other features that make it extremely valuable, such as an inexhaustible supply of patience, 24/7 availability, and the ability to constantly learn and improve.

4. Inventory management

Inventory management is a huge undertaking that requires monitoring many moving parts, not just changing inventory levels. Inventory management also involves closely tracking the entire supply chain, customer demand, order history, and special events (like a big sale or promotion). AI can help with all of these tasks.

Machine learning processes can analyze current and historical counts of each item listed here (and any other items you need) to make predictions about your inventory needs—such as which items you need in greater quantity and how many of them you need to order or produce.

5. Fraud prevention

Whether you are a consumer or a business owner, the threat of fraudulent activities or scams that expose confidential data is a common concern. This has led to solutions being developed across industries to prevent fraud. For example, online casino customers can avoid sharing their financial information by choosing a platform with list of all Paysafecard operators as one of the payment options.

One way that business owners and operators can prevent fraud is by using machine learning. This technology can evaluate purchasing activity and flag any transactions that seem suspicious or unusual so that necessary steps can be taken to protect the business and its customers.

6. Price optimization

The e-commerce industry is highly saturated, and a strategic approach to pricing can give companies a competitive advantage. AI integrations can help you find the perfect price for your product by analyzing your competitors’ prices and product deliveries, and by analyzing your customers’ buying patterns.

7. Streamlined content production

Generative AI is an innovative and exciting new tool that is gaining incredible attention and imagination as people realize its possibilities. When it comes to e-commerce marketing, generative AI has the potential to be a powerful tool for streamlining content production and other marketing initiatives.

Tools like ChatGPT, Gemini, and Copilot can review and provide feedback on current content and brand messaging. When creating new content, these tools and others like DALL-E can help at every stage of the creative process, from ideation to final production. This saves a significant amount of time and can help reinforce the work done in the process.

Application

AI is increasingly being used as people and businesses look for ways to update their workflows and use their time more efficiently. For e-commerce businesses, AI integrations help with efficiency and improve the overall customer experience. Whether businesses use generative AI tools or the less visible tools of machine learning or natural language processing, the impact of the tools is compounding.

As AI advances, its use in e-commerce is likely to grow as well, further streamlining e-commerce operations. But even now, AI capabilities are helping businesses grow revenue and thrive at an astonishing rate.