How Can Artificial Intelligence Help Online Retailers

AI help online retailers

Artificial Intelligence has proven to be the most transformational technology for worldwide businesses, especially for online retailers. The best examples of this are Amazon’s recommendation engine, Alexa shopping assistant, customer support bots, and voice search. As per Statista, The Global retail spending on AI was USD 3 billion in 2019, which is expected to reach USD 23.32 billion by 2027. Moreover, a survey conducted among global retailers states that more than 80% of revenues will be generated from AI by 2023.

In this post, we will discuss nine revolutionary advantages of AI technology that have transformed the global eCommerce landscape most innovatively and reliably.

Table of Content

  • How Can Artificial Intelligence Help Online Retailers?
    • Optimizing Customer Service Via Chatbots
    • Develop Much Efficient Sales Process
    • Gaining Valuable Insights on Marketing & Advertising
    • Reducing The Margin For Human Errors
    • Strategizing Pricing & Inventory Management
    • Eliminating Fake Reviews
    • Trend Forecasting
    • Improving Customer Retention Rate
    • AI-driven Site Search
  • Endnote

Optimizing Customer Service Via Chatbots

According to a survey by Forrester, 89% of online retailers found AI-powered chatbots much more resourceful for customizing customer experiences. These chatbots use AI capabilities to stimulate conversations with humans and respond intelligently to their various types of queries. 

This allows online retailers to offer 24×7 active support to website visitors who are looking for some clarification regarding a product or a service. Various eCommerce giants like Amazon, eBay, Flipkart, Jindong, and Alibaba have utilized AI capabilities to offer uninterrupted customer support.

Develop More Efficient Sales Process

Develop Efficient Sales Process

Escalating sales is the primary target of any eCommerce business, irrespective of its size. AI has proven its worth in this context too. Integrating AI into your CRM will enable you to troubleshoot customers’ concerns and drive new opportunities for the sales team by creating an overall better understanding of the audience, an automated system for timely responses to their concerns, and a robust footing to plan strategically.

AI has enabled online retailers to access relevant information quickly to create better sales outcomes. For instance, The North Face, a major eCommerce retailer, uses IBM’s AI solution “Watson” to ask several questions regarding the usage of a particular product, and then depending on their response, they deliver highly customized product options for customers to consider. 

Gaining Valuable Insights on Marketing & Advertising

Personalization is the key to success in the highly competitive eCommerce landscape. It’s evident by the fact that more than 76% of online customers expect companies to understand their needs and preferences.

Gaining insights into consumer behavior with the help of AI and Big Data has helped online retailers to prepare a predictive customer analysis based on the relevant data. This helps them to design customer journeys in a better way and be more targeted towards their marketing approach. 

AI is also known for its proven excellence in automating marketing intelligence and translating data into desired outcomes. AI can help marketers to scale up their marketing campaigns by optimizing content, help gain more clicks, and simultaneously track the performance of campaigns. Read Also: How AI has Reduced the Content Cost of an eCommerce SMBs to Half

Reducing The Margin For Human Errors 

AI has unquestionably helped online retailers to reduce errors of a vast variety to a great extent. Especially when it comes to data security, safeguarding customers’ data is a critical component of online business. We know how cyber-attacks are ruining online retailers’ hard-earned reputations. AI can help you learn, adapt, and react to possible security threats and ensure foolproof data storage and utilization for bringing personalization to products and services.

Strategizing Pricing & Inventory Management

Inventory Management

Pricing is important to remain competitive in the eCommerce industry. However, present-day pricing standards have gone far beyond guesswork. The only thing is that you must have expert human resources to effectively analyze a huge volume of data and then come up with actionable insights to work on both pricing and inventory management. 

AI uses complex learning algorithms to evaluate market dynamics and all other major aspects of market competition. It enables online retailers to forecast demand, order velocity, and plan inventory management based on available data and product performances.

Eliminating Fake Reviews

The role of reviews in online shopping is vital. A higher number of positive reviews paints a good picture of a brand, its products, and its customer management competency. So, this is one component that online retailers need to manage smartly and efficiently. 

However, with fake reviews on your eCommerce site, you are most likely to lose your worth and credibility. AI can help you encounter such issues as Amazon does with its in-house AI system for detecting fake reviews based on their characteristics. The AI-based system also highlights reviews made by verified customers to increase visibility and enhance customers’ trust in a product. Hence, you easily manage to sustain your brand’s credibility with the help of AI and get more attention as a store that prioritizes integrity and authenticity.

Trend Forecasting

Offering personalized experiences for online customers depends on how well you know their requirements, expectations, purchase motivations, and buying behavior, So, you must get acquainted with their preferences and pain points. The more insights you gain about your customers’ shopping patterns, the better customization you can offer to them. One way to that goal is through a constant vigilance on market-wide as well as niche-specific consumer behavior analysis. 

AI enables online retailers to track recent market trends and anticipate time-to-market speed accordingly. Using AI & ML, you can easily review various metrics at your disposal, and prepare a business plan accordingly. Moreover, you can also develop turnkey solutions based on AI-based data and reconfigure projections with the changing pattern.

Improving Customer Retention Rate

Customer retention remains a dominant factor for all business types and sizes, especially since so many eCommerce websites have started flooding the market after the pandemic. The rise of Artificial Intelligence in the online retail sector has allowed retailers to innovate customer retention strategies to maintain their brand’s credibility among the masses. Besides this, AI has also enabled online retailers to target the right audience for their products and build stronger relationships with them. Most eCommerce giants like Amazon and eBay have effectively used AI technology to enhance their customer segmentation and retention rate.

AI-driven Site Search

Site search is a crucial tool used by online retailers to help customers search, compare, and finalize products swiftly. It also helps them to enhance conversion rates by ensuring high-quality search options using filters. AI has taken the entire search experience to a whole new level where shoppers are directed towards more relevant search results based on their purchasing patterns and preferences. Using adaptive search, visual search, and voice-based search has allowed store owners to facilitate better shopping accessibility for their target customers. 


Besides Artificial Intelligence, other promising technologies for the eCommerce industry are machine learning, augmented and virtual reality integration, and visual commerce. All of these can enhance how people perceive online shopping by providing immersive shopping experiences. Hence, it can easily be concluded that technology-based strategic investments and adaptations are currently the best way for online retailers to develop a more connected relationship with customers and enhance their overall shopping experience.

Nathan Smith

Nathan Smith is a Web & App Developer and the current Practice Head at Technoscore- a leading eCommerce web development company in India. He constantly brings updated information on the latest tech trends. His passion for transforming technologies encourages him to inform and educate people through his write-ups.