AI in E-commerce: 8 Ways It’s Transforming the Business

Ways AI Transforming E-commerce Business

Artificial Intelligence no longer revolves just around scary and futuristic movies; it is making headlines and can be found everywhere. Among the list of industries that are hopping on the trend of adopting AI, e-commerce has been an early adopter in implementing and improving through the power of AI.

AI in e-commerce is benefiting the industry in more than one way. Firstly, it has made it easy to collect customer behavior data, which helps businesses understand what customers want. Secondly, it assists in making the right merchandising decisions and ultimately providing the best user experience.

But there is more to the story!

In this blog, we have discussed the top 8 ways how AI is transforming online stores. We have also mentioned how businesses can adapt to the latest AI trends without fail.

AI in E-commerce: Stats and Reports

As per a report by Precedence Research, AI in e-commerce has reached $5.81 billion in 2022. This figure is expected to hit $22.60 billion by 2032, registering a CAGR of 14.60% from 2023 to 2032.

AI in E-commerce states

With the e-commerce sector readily adopting AI, businesses are able to offer real-time assistance to their customers and rightly comprehend demand patterns.

  • 40% of customers don’t care whether a chatbot or a real human is helping as long as they get help.
  • 50% of errors in supply chain networks have been reduced via AI-powered forecasting.
  • 85% of on-time deliveries have been improved because of AI in e-commerce.
  • 64% of businesses expect AI to increase productivity.
  • 58% of Millennial online shoppers rely on personalized product recommendations via AI.

AI Use Cases in E-commerce

AI technology in e-commerce is now being used to:

  • Offer excellent customer support via chatbots, which eliminates the need to wait on hold.
  • Observe and analyze shopping behavior & customer interactions to make better strategies.
  • Build brand awareness, improve conversions, and ROI to make e-commerce website successful.
  • Increase order values by cross-selling and upselling desirable items.
  • Offer personalized shopping experiences to win over customers.
  • Make personalized product recommendations to engage customers.

How AI is Transforming E-commerce Business

Here’s how AI is transforming e-commerce and taking businesses to the next level:

How AI is Transforming E-commerce Business

1. Boosting Credibility

In the e-commerce business, customer support matters the most. AI helps with the same by delivering relevant information and understanding individual customer preferences. Likewise, AI maintains transparency by strategizing dynamic pricing and reduces mistrust.

What’s more? Well, artificial intelligence strengthens quality and information flow, which enhances overall communication between companies and customers. Thus, creating lasting relationships.

2. Chatbot

As per a report, the chatbot market will rise to $3.99 billion by 2030. This shows how chatbots are helping e-commerce businesses deliver top-notch customer experience and augment sales.

Likewise, chatbots offer multilingual support, reduce human error, track orders, and provide 24/7 support. Regardless of the type of chatbot, it can select the right language to communicate with audiences.

3. Streamlining Inventory Management

One of the main benefits of AI in e-commerce is that it helps streamline inventory management. It’s possible because AI uses predictive analytics, which allows businesses to keep an eye on the supply chain.

E-commerce companies can further use machine learning to accurately determine the status of their inventory. With this level of forecasting, you can drastically reduce sales and know when the inventory is out of stock. Lastly, warehouse management also gets streamlined via AI.

4. Preventing Online Selling Fraud

Did you know that online fraud activities in 2021 in the e-commerce industry have reached $20 billion? Luckily, AI along with machine-learning algorithms is helping reduce fraud and detect suspicious behavior. Furthermore, AI also helps address another integrity-based e-commerce problem, i.e., fake reviews.

5. Cross-Selling and Upselling

E-commerce businesses use AI-driven algorithms to analyze customer’s shopping behavior. It helps offer the best deals and discounts to the customers. In addition, AI analyzes data and creates a strategy that resonates with the target audiences.

Artificial intelligence in e-commerce exceeds personalization by a massive amount. It helps get insights into individual preferences, which makes it easier to segregate customers based on their purchasing history.

6. Performance Evaluation

AI in data engineering and data management helps the sales team to concentrate on high-value prospects. It offers valuable information, customer acquisition rate, revenue growth, and more.

In addition, AI examines customer data patterns and gives e-commerce businesses access to data, which can be used to set relevant KPIs.

7. Omnichannel

AI helps combine multiple channels for the target market to create a cohesive customer experience. Through omnichannel, e-commerce businesses can provide customers with a seamless experience across all channels. This offers various advantages like access to more products, personalized experiences, and more.

Likewise, e-commerce businesses can use business models like inventory management and sales to allow customers to shop, compare, and get consistent services.

AI also ensures that e-commerce business websites stay user-friendly, emails remain relevant, and social media stays engaging. In short, with AI in omnichannel, businesses can drastically improve their ROIs.

8. Reduce Manual Labor

Besides impacting e-commerce business on a basic level, AI helps in automating daily tasks and reducing manual labor. This results in keeping the overall process as smooth as possible, while minimizing errors.

How E-commerce Businesses Can Adapt Latest AI Trends

As an e-commerce business owner, you need to figure out which AI trend is most relevant. You can do this via a calculative and systematic approach.

Let’s navigate the process:

1. Understand Your Business

First things first, you need to determine your e-commerce business’s objectives. Remember that each business has different objectives and requirements for AI trends. So, what’s working for a business might not work for yours.

2. Uncover Pain Points

Next, you need to uncover the pain points, which can vary greatly from operational issues to financial channels. You can find the pain point by inspecting data and patterns.

3. Perform Technical Audits

By performing technical audits, you can discover the gaps in your business. You can further use AI solutions for e-commerce to make improvements.

4. Resource Allocation and Budget

By using AI-powered tools, e-commerce businesses can make accurate forecasts about product demands and customer behavior. These tools can even help refine targeting efforts and create a better strategy for resource allocation and budget.

5. Start with the Pilot Project

You can start with a smaller-scale AI project to rightly evaluate the impact of AI on your business. This approach will provide you with an opportunity to strengthen your marketing approach.

6. Ethical and Regulatory Compliance

Businesses should focus on assessing regulatory and ethical compliance that rightly aligns with their value.

7. Competitive Analysis

Did you know that businesses can gain a competitive advantage with AI in terms of marketing methodology, audience segmentation, budget specification, and platform utilization? These things help a business to stand out in the market.

Lastly, you can create an innovative surrounding where everyone can share ideas without hesitation.


E-commerce companies that have adopted AI now are going to reap the benefits sooner. They will be rewarded with a strong market presence. But it’s wise to be aware of the potential road bumps that might hinder the journey.

AI solutions are indeed highly beneficial in the long run. But to position yourself as a market leader, you need a trusted e-commerce app development company on your side.

You can hire Protonshub Technologies. We are an award-winning company that believes in taking an innovative approach to meet their client’s expectations. We offer custom AI development solutions that can help you create a lasting impact in the e-commerce industry.

Reach out to us today to elevate your e-commerce business like never before.

Frequently Asked Questions

AI in e-commerce helps with behavior analysis, data processing, customer targeting, personalized recommendations, inventory management, customer segregation, and more.

AI helps businesses in various ways. For instance, it assists with pricing strategies, which lets you modify prices as per the market standard in real time. In addition, AI-powered chatbots deliver better responses and solve customer queries 24/7. Lastly, AI detects fraud and prevents suspicious activities.

Designing and developing an AI-based e-commerce app can cost you anywhere between $35,000 to $200,000. The exact app development cost depends on multiple factors like the app’s complexity, tech stack, features, and more.

Ekta Singh

"Senior Content Writer"

Ekta Singh is a rookie food experimentalist and k-drama fan with 4+ years of experience in writing. Bridging gaps between companies and customers through conversion-driven content is her forte. She believes in writing stories for a living and living life for exploring places.