Artificial Intelligence – a Driving Disruptive Force in e-Commerce

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E-commerce is thriving at the moment, representing 10% of total commerce and standing at nearly $2.5 trillion; and there is not a single sign of retreat. Over half a million e-stores are active worldwide, but Amazon remains the dominant market share eater, followed by some big players willing to fight for a bigger slice of the pie. However, technologies like Artificial intelligence (AI) and machine learning are hugely disruptive and will give buyers a much greater bargaining power than ever before, probably causing e-commerce as we know it to end. Those not fully prepared for the disruptive technology will suffer a significant blow, which is basically the case with any disruptive event.

AI Satisfying Consumer’s Needs

In the last century, marketing was focused heavily on mass advertising as a means to stimulate consumer demand. In the 21st century, everything is about the consumer and what they want. AI, combined with neuroscience breakthroughs, is expected to change the marketing paradigm by empowering shoppers. Until now, one had to search for a product and then go through offers at several e-shops before they were ready to make the purchase. AI advancements, though, enables them to merely name the product they want (image searches, voice commands, etc.).

 Technology evolves rapidly. Take chatbots, for example. When they were first introduced, they were falling short on consumers’ expectations for quick and efficient customer service. Today, they are able to learn about the consumer over time and provide more to-the-point replies and more personalized experiences. Who knows what more surprises the future holds.

AI & Personalised Recommendations

Recommendation agents are getting smarter (and more omnipresent) by the day, making machines not only able to recognize a consumer’s need and also meet that need by ordering the product that is just right for them (or even print it for them).

AI-powered search engines are becoming more sophisticated and can now understand long search terms, giving an internal website searches a greater ability to understand the customer’s intent and actually anticipate/predict what they want, which is huge. Consumers are not only pointed toward the right direction but are also provided with tailored recommendations to fit their particular needs – the definition of excellent customer service indeed. It is no wonder that Amazon sales increased by almost 30% when it started targeted recommendations via its “item-to-item collaborative filtering” algorithm that enabled personalized content direct users to the homepage the moment they stepped their virtual foot on the virtual store.

AI can also enhance the core operations of e-commerce as it can recommend products to the customer (products they are more likely to buy), based on the channel or stage a customer is shopping in, and increase conversion rates with algorithms for merchandising placements, recommendations, product search ranking, demand forecasting, A/B ads testings and more. With AI streamlining the process and creating excellent customer experiences, online retailers will find it easier to individualize product recommendations in real-time for every single consumer.


AI is here to stay, with a mission to make customer journeys more pleasurable while giving the small fish the chance to compete with online retail sharks much fairly than ever before and igniting an inevitable disruption to e-commerce.

If you want to read more about AI, we recommend this article: THE PROS AND CONS OF ARTIFICIAL INTELLIGENCE

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