How Artificial Intelligence Transformed The Ecommerce Retail Industry

Be it through smart chatbots or the Internet of Things, the technology of Artificial intelligence (or AI) is growing rapidly in many industry domains and business areas. Starting with the 2014 acquisition of the AI company, DeepMind by Google, artificial intelligence is attracting major investments from software giants like Microsoft and Google. Additionally, a 2016 Gartner report projected over 85% of customer interactions to be managed without a human being by the year 2020.

Along with improving the overall experience of online shoppers in E-commerce retail, AI technology is working effectively for online retailers to get a better understanding of their customers and personalize their product offering. AI technology vendors in 2018 are developing advanced machine learning algorithms that can identify and recommend products to individual customers based on the marketing funnel stage of their shopping.
The continued positive impact of AI in E-commerce is an eye opener for other industry domains, who can learn and leverage its immense capabilities for transforming their customer experiences.

This article describes the ways in which artificial intelligence is shaping the E-commerce industry in 2018 and beyond.

Visual Search

Want to search for your favourite product on the online retail site? Simple, just add its real-world picture and the E-commerce site will search for the same match. Among the first E-commerce companies to enable this capability was Neiman Marcus. This powerful AI technology feature can enable visual searches based on colour, brand, size, and brand.

Merging of offline and online retail

The visual search capability is a prime example of how artificial intelligence is merging the offline and online world for retail shoppers. Retailers are using omnichannel solutions to gather and analyse online comments (for example, product reviews or customer service feedback) to provide better service for their brick-and-mortar customers.


Personalization is a powerful tool for online retailers to gather shopping-related data about shoppers and position the products that they are most likely to be interested in. However, AI technology has transformed personalization to a higher level by targeting specific product recommendations based on their online shopping history, top brands, and the touch points that customers are using for online interactions. For example, AI-based engines like Boomtrain monitor and analyse how each customer is using devices and channels (like mobile apps, websites, or e-mail campaigns) for online shopping, thus creating a universal view of the retail brands for the individual.

Virtual Shopper

Retailers work on the premise that all shoppers love to and have the time to go shopping, but this may not always be the case. Also known as intelligent shopping assistants, AI has enabled the creation of the virtual shopper, which can save the individual shopper’s time and recommend retail products after analysing the shopper’s cognitive data in quick time. The success of virtual assistants such as Amazon Alexa and Google Now with their natural language processing abilities is also impacting the way retail customers are using technology to make their purchases.

E-commerce stores such as North Face have been successful in integrating AI technologies to shop on behalf of their customers.


With over 70% of the American millennials appreciating the use of AI technology by retail brands to promote their products, artificial intelligence is improving rapidly in providing a richer and more personalized experience for retail customers.

Leveraging the power of AI for improved customer experience and service is not restricted to the E-commerce retail segment but can also work to the advantage of other industry sectors.

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