Artificial Intelligence (AI) has transformed almost all the business sectors in the world. Technologies such as Virtual Reality (VR) gaming systems have forever changed the way we interact with the world. The e-commerce boom in the past decade has been due to the influence and use of AI in optimizing customer experience and the efficient use of customer data. In this fiercely competitive landscape in e-commerce, the ability of retailers to quickly adapt to changes in the marketplace and provide a personalized and seamless customer experience has become the need of the hour. 

According to Statista, the global AI market in the retail industry is projected to reach $23.32 billion by 2027. 

Almost 70 percent of e-commerce business owners agree that infusing learning algorithms into their software helps with personalization. If you are an e-commerce retailer looking to level up your game, read on to find out how AI is transforming the e-commerce world for good. Rapid developments in the field of AI such as deep learning and reinforcement learning are expected to continue further at a quicker pace with the Big Tech companies investing billions of dollars into AI research. 

AI Technologies for E-commerce 

AI is being used in E-commerce in a number of ways whether it be augmented reality or intelligent product merchandising or sorting. Presently, the whole purpose behind using AI in E-commerce is to streamline the customer journey and deliver a superb shopping experience. Now, let’s look at some AI technologies adapted to E-commerce.  

  • Machine Learning for E-commerce 

A subset of AI gaining prominence for wide usage is Machine Learning (ML). Statistical ML algorithms use real-time data to make predictions which can then be used to gain actionable insights. The accuracy of the predictions depends on the kind and quantity of data available to feed and train the models once the algorithm is picked. More the data, the better these algorithms get over time. The ML for the E-commerce market is growing at a very rapid pace at a CAGR of 44 percent with the market being valued at USD 9 million, as per the stat offered by eescorp. ML for E-commerce is used in a wide variety of ways including but not limited to: 

  1. Accurate and real-time forecasting of customer behavior 
  2. Personalized search results  
  3. Autonomous pricing optimization or dynamic pricing 
  4. Fraud detection and prevention 
  5. Advanced and accurate product sorting   
  • Deep Learning for E-commerce 

Deep Learning is a subset of Machine Learning modeled on the structure and behavior of the human brain. It is basically a collection of neural network algorithms which imitate the way humans gain certain knowledge types and behave based on that information. A real-life example of the application of deep learning is Amazon’s voice assistant Alexa.   

  • NLP for E-commerce  

Another subset of Machine Learning that enables machines to understand speech and patterns in human language is Natural Language Processing (NLP). Along with deep learning, NLP is commonly used in voice assistants and chatbots. According to Mordor Intelligence reporting, the market for NLP for E-commerce is predicted to be worth USD 48.46 billion by 2026. The main applications for NLP for E-commerce include virtual conversations and, voice-assisted payment and searches, along with: 

  1. Semantic-based and intelligent search functionality  
  2. Voice assistants such as Alexa and chatbots  
  3. Categorizing products and personalized product descriptions 
  4. Collecting and storing data on shopping habits and customer behavior  
  5. Automatic translation of the site language 
  • Computer Vision for E-commerce  

Another new subset of AI that enables a computer to see, collect, and store visual information such as photos and videos is Computer Vision. A real-life example of E-commerce using computer vision is Augmented Reality (AR). It is also used in the back-end processes such as inventory and logistics. Another interesting use of Computer Vision in E-commerce is Facial Recognition. An article stated that European E-commerce retailers have seen an improvement in customer insights by over 90 percent.  

One feature on your E-commerce platform which could distinguish it from your competitors would be product match with visual search where a user can upload a picture of their desired product and the platform generates suggestions of existing products which are either a perfect match or close to it. Computer Vision is also being used in warehouse robots and can be used to reduce reliance on human labor.  

Interesting Uses for AI in E-commerce 

By implementing the right full tech stack for AI across all channels of your E-commerce platform, you can drive personalization and streamline operations across the entire process right placement of the order to its fulfillment. Advancements in AI have made it possible for you to: 

  1. Enhance the logistics operations  
  2. Forecast sales and demand with high accuracy 
  3. Drive personalization to a whole new level  
  4. Leverage the power of customer segmentation 
  5. Advertise and market products to increase conversion rates  

All the above use cases play an important role and are the drivers to skyrocketing your revenue and profits.  

Benefits of AI in E-commerce  

At the time of writing, putting AI to use in E-commerce has the following benefits:  

  1. Putting AI to use in E-commerce to ensure seamless automation along with the right tech stack makes sure that your platform can optimize and shift to make changes in its behavior in reflection of changing customer behavior and market environments. 
  2. By utilizing appropriate persuasive design techniques across your entire platform stages of user experience, you can drive personalization to a whole new level. The more customized and personalized the experience, the greater the proportion of customer retention. In short, utilizing machine learning drives revenue and profits.  
  3. Utilizing AI to make the customers pass through the sales funnel smoothly and seamlessly can ensure repeat visits and more purchases from your customers. 
  4. Utilizing AI to optimize the marketing and advertising process to ensure that your customers are targeted with the right products at the appropriate time ensures a greater probability of a purchase.   


AI has become the tool of choice for E-commerce brands to enhance their logistics and optimize their inventory while driving personalization and gaining insights into customer behavior. There is not a single E-commerce brand that doesn’t use AI at some level. In order for your brand not to be left in the dust, it is imperative to adopt AI and automation platforms for enhanced e-commerce operations.