E-commerce powered by Artificial Intelligence.

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Thirunayan Dinesh

10th June 2020

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The emergence of the internet has fueled a new form of commerce — eCommerce. Online retails is a booming business, but too many eCommerce businesses struggle to get traction. Running an online store can get complicated fast, which is why applying machine learning and AI practices can help. Artificial Intelligence (AI) is infiltrating every industry; from virtual reality (VR) gaming systems to AI robots in manufacturing, the development of AI technology is revolutionizing the way we interact with the world.


But e-commerce is especially susceptible to AI disruption, as learning technologies and algorithms are currently transforming the way we buy and sell goods online. Not only can AI perform the tasks we previously did manually, but it can also optimize the customer experience and provide retailers with the information they need to make an informed business decision.


Utilizing AI can help you to work on targeted marketing and advertising more precisely towards your ideal customers, increase customer retention, and find capabilities in your sales processes. AI can play a major role by automating the repetitive tasks of an online store. By making use of AI, certain functions can be automated, such as product recommendations, loyalty discounts, low-level support, and more. Artificial intelligence offers many services such as personalized product recommendations, price optimization, smart logistics, sales, demand forecasting, etc. e-commerce retailers deliver an optimized customer experience on and off their websites by using collected business and customer data to make smarter business decisions and more accurate forecasts on shifts in customer expectations.


AI systems are capable of exploring and analyzing highly complex data related to customer engagement and optimizing performance on a continuous basis as more data becomes available. Marketers can benefit from this by setting parameters and allowing the AI to optimize and learn to achieve accuracy. Most e-commerce operators get the opportunity to understand their customers and new trends by implementing AI-driven solutions for their accessing business and customer data. Through this article let’s look at how AI is reshaping the e-commerce industry and what advances are to be expected.

Intelligent conversational assistants

In a survey, 70% of the customers stated that they prefer interacting with an intelligent agent or a virtual assistant, because of reasons like simplicity, timeliness, accuracy, etc. What’s common to conversational assistants in any domain is their ability to have conversations with human users at any given time of the day. These assistants have the ability to demonstrate it by engaging in conversations with the customer and making more online sales.


These assistants are capable of collecting and analyzing information generated by the conversations, which can lead companies to understand the customers’ needs and preferences. This conversational data can be utilized to anticipate customer behavior and send offers or marketing messages at the right time.

Personalization and Recommendation systems

AI is also incredibly adept at providing a personalized experience to customers through accurate product recommendations and advertising. AI algorithms will sift through enormous datasets to retrieve actionable insights into customer behavior that will help them better predict exactly what a customer needs when they need it. These collect and process customer data based on certain criteria such as previous searches, most visited, etc. The recognized patterns based on past customer behavior and look-alike potential customers and their online shopping patterns will result in a process named ‘individual profiling’ which leads to personalized product recommendations.


Utilizing AI solutions and machine learning, deep personalization techniques can be used in order to customize content by the user. By analyzing big data related to purchase history and customer interactions effective targeted marketing campaigns can be organized.


Businesses can reap many benefits from recommendation systems such as creating customer-centric search options, retargeting potential customers with a better approach, analyzing and identifying exceptional target prospects in order to create a more efficient sales process, and as well as by creating a new level of personalization across multiple devices.


This AI technology can even be used across platforms such as websites, email, and even mobile apps. By helping you create localized content to fit your audience (or multiple audiences), AI can help you give your customers a more enjoyable and streamlined experience. Personalization is the key to a pleasant customer journey, which is why so much e-commerce advertising is now using artificial intelligence algorithms.


For instance, at Rootcode AI, our team of Data Scientists, Machine Learning Engineers, and Data Engineers built “ConverseAI” - an intelligent conversational AI assistant that can help e-commerce users with their inquiries, suggest them products, and help resolve their questions about products, reducing the response time to customers from hours to seconds providing an overall superior customer support experience.

Inventory Management

Inventory management is a procedure that includes tasks such as monitoring the buying, manufacturing, storing, and using of goods from the purchasing phase till direct store sales. The whole motive of inventory management ensures that the provided goods are of good quality. Although inventory management depends on the organizational structure and certain coherent actions, utilizing AI can add consistency and improve inventory supervision.


For instance, at Rootcode AI, our team of Data Scientists, Machine Learning Engineers, and Data Engineers built “ConverseAI” - an intelligent conversational AI assistant that can help e-commerce users with their inquiries, suggest them products, and help resolve their questions about products, reducing the response time to customers from hours to seconds providing an overall superior customer support experience.


AI technology uses predictive analysis to make estimates about what future demands in the market will look like. With the use of machine learning, this AI technology becomes better and better at accurately predicting what inventory you need to order and how much of it you should always have on hand. These AI systems can anticipate quick changes in demand, conduct preventive maintenance for your technology and even automate certain packing procedures to increase efficiency.


Note that, inventory management affects many not only e-commerce operations but also supply chain management. Check out our article here on how AI powers the modern-day operations of the supply chain.


Transforming manual operations into AI operations may provide benefits such as real-time tracking of products, manual error reduction, and inventory optimization. By tracking and recording the interests of every consumer via algorithms, companies can get a better image of consumer demands and work on their business development plans. Therefore, companies get a pre-plan of their future customer needs and stock products accordingly.

Price Optimization.

What if every product sold helps organizations to maximize their profits? Well, implementing AI to price optimization can benefit businesses to make more profits while automating time-and-labor consuming tasks allowing teams to focus more on customer-centric decision making. Price optimization fueled by AI has self-learning algorithms, which scan enormous amounts of data, comb through related pricing scenarios, and suggest the most relevant price accordingly. This strategy also analyzes changes in product prices based on supply and demand. With access to accurate data, AI tools can predict when and what to discount, by dynamically calculating the minimum discounts which are necessary for the sale.

Rounding up

E-commerce brands are increasingly turning to artificial intelligence to improve their analytical insights, create a more personalized customer experience and increase their competitiveness. Technologies like Natural language analysis will advance more applications in e-commerce, bringing more value and convenience to businesses and users. As the market for AI in e-commerce continues to grow, any brand not investing in its potential will be left in the dust.


  • How e-commerce has revolutionized the way people sell and purchase goods

  • E-commerce businesses generate a ton of data - User clickstreams, purchase histories, product reviews, sales data, and so on.

  • Modern customers are expecting a more and more personalized experience in every digital service they interact with and especially with the advent of hyper-personalized recommendation engines in e-commerce platforms like Amazon and eBay, users now by default expect e-commerce sites to understand their needs and proactively suggest their products.

  • The second biggest challenge faced by e-commerce businesses is managing inventory. Consumer demands tend to fluctuate over different periods of time and knowing these seasonal fluctuations are crucial for e-commerce businesses to manufacture enough inventory to meet consumer demands. This can not only be applied to inventory management but can be scaled to forecast entire supply chains. Visit our article on how AI is used in supply chains to learn more.

  • The third and most crucial challenge is customer support. Many of our large scale e-commerce customers receive more than a 1000 customer inquiries through their different web and social media channels every week, and as this number scales, the pressure on human customer support agents starts to mount to respond to these messages and the cost of not responding can be losing potential customers and this is what we call as the message overload bottleneck. Where e-commerce businesses keep increasing the size of their customer support teams which not only introduces a scaling overhead cost but is also unsustainable for the business in the long run. So how can AI help? Narrowing down, this problem condenses down to the fact that although online e-commerce provides customers to purchase goods more independently compared to brick-and-mortar stores customers still expect the same level of human interaction when it comes to supporting, they still want to message and inquire about a product before purchasing it and sometimes even ask support agents about specific products.And this is the exact problem AI conversational assistants solve. We train first to embed an AI agent with the knowledge of a particular e-commerce business’s products and their hierarchies. Then we train the agent to understand and navigate through conversational paths users can take and respond to users accordingly. The biggest advantage of an intelligent conversational assistant is that it can virtually serve any number of customers parallelly and if trained enough can mimic the exact conversational flows a human customer support agent would take providing the end-user with the same experience. This can not only help businesses cut massive cost overheads in scaling their customer support teams but also makes sure that the human customer support agents only attend to user inquiries in places where human intervention is needed. Whereas the AI agent can take over inquiries that are common and have a fixed flow of answers.
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