Artificial intelligence, or AI, has become quite the hot topic this year, and for good reason–AI is not only revolutionizing the way we work, it’s opening our eyes to possibilities we didn’t even know to dream about. With its ability to analyze vast amounts of data, make real-time decisions, and enhance user experiences, AI has become a cornerstone for success in the competitive world of online commerce. While AI is shiny, new(ish), and exciting, there is always a price to pay for advancements of this magnitude. I’ve highlighted here some of the ways AI is making us better marketers, ways any business can improve their eCommerce site, and some ethical considerations to discuss with your favorite contrarian.
At the heart of AI in eCommerce lies machine learning, a subset of AI that enables systems to learn from data and improve their performance over time. This could include suggesting products to users based on browsing history, optimizing pricing strategies, and predicting the needs of the consumer, revolutionizing the customer experience.
Nine ways AI is transforming the industry and improving customer experiences:
- AI can tailor recommendations to individual customers. These personalized product recommendations enhance customer interactions and drive higher conversion rates and customer loyalty. By analyzing data from each user’s session and clicks, this recommendation engine can glean insights into that person and create hyper-personalized recommendations. Streaming services and social media algorithms are a great example of how this works in real time.
- AI can automatically adjust your store’s pricing based on competition and supply and demand, maximizing your profitability potential. This dynamic pricing feature frees up countless hours of research, especially with a large product catalog. If you allow it to, you can set up parameters that essentially allow your site to put certain items on sale, lowering and raising your product prices to hit the sweet spot, time and again. If it’s good enough for Amazon, it’s something every online business should look into.
- AI is a data wizard who loves to show off in all sorts of geeky ways. Its analytical prowess can create customer segments for improved marketing campaign effectiveness, forecast sales and demand, and streamline inventory management, thereby optimizing supply chain operations, faster than it took you to read this sentence. It is reshaping traditional processes. This not only reduces operational costs, but also ensures timely delivery, a crucial factor in customer satisfaction.
- AI can take the burden off of your customer service team by answering simple questions and directing those who need a human’s assistance to the right person or department the first time. Chatbots not only provide immediate responses, but they also allow your online store to provide a ‘round the clock service. Your website may be a 24/7/365 operation, but that’s not something any human I know can do, so let AI work while you sleep.
- AI said “I see your search bar, and I raise you an audio and graphics bar, AR, and VR too!” Gone are the days of only seeking information with your keyboard. Voice and image searching align with consumer behavior trends. Websites can integrate tools such as Google Assistant, a Lens feature, vectors, and natural language processing, enhancing the shopping experience. Voice recognition systems allow users to make purchases, track orders, and inquire about products using voice commands. Augmented reality and virtual reality technologies in e-commerce are poised to redefine the online shopping experience. AI-driven applications in AR and VR enable users to virtually try on products such as glasses, visualize furniture in their homes, and engage with products in ways previously reserved for physical stores. This immersive experience increases user engagement and reduces uncertainty, making customers more confident in completing a purchase. These tools for finding products online or within your website are becoming an integral part of the e-commerce landscape.
- AI can help combat fraud by analyzing data patterns to identify and prevent fraudulent activities, including payment fraud and account takeovers. AI-powered detection systems employ advanced algorithms to detect these anomalies, protecting businesses and customers. This not only saves time, money, and frustration, it also fosters trust in the eCommerce ecosystem.
- AI can be used to generate product descriptions. Even if you’re a natural wordsmith, allowing AI to auto-generate this for your store saves time, eliminates writers’ block, and allows for greater efficiency. This can be a game-changer for creating and editing engaging and SEO-friendly content. Sorry, thesaurus. We still love you.
- AI can be used to set up email campaigns, automating outreach for various stages of the sales process for timely and effective customer communications. You can even use AI to write the emails for you!
- AI can identify fake reviews and filter them out. Approximately 31% of online reviews are fraudulent. AI analyzes text patterns, writing styles, and formatting to flag suspicious reviews. It’s hard enough being everything to every customer, without having to defend your reputation against someone who doesn’t even exist. Bye, bye imposter!
The Role of AI in Marketing Strategies
Marketing practices are evolving rapidly with the widespread commercialization of artificial intelligence. AI is allowing businesses to analyze data more quickly and automate activities such as targeted advertising, customer segmentation, and social media engagement.
AI heightens the precision of targeted advertising by predicting which ads are most likely to resonate with specific individuals, which not only optimizes ad spend, but also improves the effectiveness of marketing campaigns. AI algorithms can identify the most relevant audience segments, ensuring advertisements that convert reach the right people at the right time.
AI-driven customer segmentation enables businesses to categorize their audience based on behavior, preferences, and demographics. This segmentation, combined with retargeting strategies, allows eCommerce platforms to deliver personalized messages and promotions to specific customer segments. This tailored approach increases the likelihood of re-engagement and repeat business.
The integration of AI in social media is not new, but it has become increasingly prevalent in eCommerce. These tools use data to understand customer sentient, identify trends, and optimize content delivery. Chatbots on social media platforms provide instant customer support, further elevating the overall customer experience and building brand loyalty. It is an extension of your website. You want to meet your customers where they are, and you want there to be consistency across your online presence (that’s branding!). If it works on your website, it can work on your social channels too.
Challenges and Ethical Considerations of AI
The proliferation of AI in eCommerce raises concerns about data privacy and security. With great power comes great responsibility. Everyone at your company can be a saint, but there are hackers lurking, just waiting for the opportunity to infiltrate precious data of all kinds. Businesses must implement robust security measures to safeguard customer data and comply with regulations anywhere they serve customers. This could include the American Data Privacy and Protection Act (ADPPA), the General Data Protection Regulation (GDPR) in the European Union, and state-specific laws such as the California Consumer Privacy Act (CCPA). Note: the five US states that have enacted comprehensive consumer data privacy laws are California, Colorado, Connecticut, Utah, and Virginia. These rules aim to regulate how organizations keep and use consumer data. Balancing the use of customer data for personalization with the need for privacy is a delicate challenge that requires a transparent and ethical approach. This can be done by sharing data usage policies and requesting customer consent.
Another concern we should be talking about is bias and discrimination in AI. The algorithms are only as neutral as the data on which they are trained. Ecommerce businesses need to be vigilant about potential biases in their algorithms, particularly in areas such as product recommendations and pricing. Addressing and mitigating bias requires ongoing monitoring, transparency, and a commitment to fairness in algorithm decision-making. Note: for a deeper discussion on unconscious bias, I highly recommend checking out Dr. Rebecca Heiss’s extensive research and easy to understand breakdown of how to spot and correct these biases.
And what about responsibility? Who should be held accountable when unintended actions take place? Is it the creator of the system you’ve implemented? The person or people who set up the systems for your company? The robot itself? Though AI automation can free up time and handle mundane or undesirable tasks, human oversight is still incredibly important. AI is sophisticated and capable, and there is concern that it can make decisions on its own. If things go awry, it is your company that must answer to its customers, not AI, so it’s critical you ensure your team is equipped with the skills to monitor and manage AI systems effectively.
Another potential concern of implementation could be resources. AI systems need dedicated infrastructures with advanced data processing capabilities. Not every company will be able to invest in the tools required to run AI systems, or may not have enough quality data to train their systems effectively. The great thing is, AI is not an all-or-nothing tool, reserved for the ultra-elite. That’s why working with a knowledgeable company like Virid is important. We can help you create a roadmap utilizing your wishlist and implement these advancements in phases.
The Bow (and an Encore)
The integration of artificial intelligence in eCommerce has transformed the way businesses operate, interact with customers, and make strategic decisions. From personalized recommendations and enhanced user interfaces to optimized operations and targeted marketing, AI has become a driving force behind the success of eCommerce platforms. As technology continues to evolve, the future promises even more innovative applications of AI, shaping eCommerce in ways that were once unimaginable. To navigate successfully, businesses need to not only embrace the capabilities of AI, but also prioritize ethical considerations and data security, ensuring a harmonious and sustainable relationship between technology and commerce. As we move forward, synergy between artificial intelligence and eCommerce will undoubtedly shape the future of digital business.
This article only touches the surface of what we can share about AI. Stay tuned over the next few months as we dive deeper into this topic. If you’re ready to talk about setting up your eCommerce business for greater success in 2024, don’t wait one more day to connect with our team. AI is bringing mind-blowing opportunities to the forefront, and we want YOU to be one of the leaders paving the way.
Last Updated on February 19, 2026 by Team Virid
