Anticipating Customer Needs: 11 Best Use Cases of AI in eCommerce

Imagine a world where your eCommerce platform can anticipate customer needs, streamline operations, guarantee high volumes at the checkout, and deliver personalized user experiences. 

You don’t have to imagine it because by leveraging artificial intelligence solutions, eCommerce businesses are defining the new frontier of online shopping. 

Read on to discover how AI is transforming the eCommerce industry, from personalized shopping experiences to intelligent inventory management, and explore the cutting-edge applications shaping online retail's future.

But first, we should explore how artificial intelligence is changing how eCommerce platforms do business. 

How is AI Changing eCommerce?

Artificial intelligence advancements have become an essential component of online retail businesses. 

These tools enable eCommerce websites to gain valuable analytical insights and access to data that can aid in understanding their customers' needs and preferences to create a competitive online shopping experience. 

By harnessing the power of AI, retailers can make more informed decisions that improve their overall business operations and enhance customer engagement. This technology also helps online stores optimize their offerings, increase conversion rates at the checkout, and drive sales. 

In today's competitive eCommerce landscape, AI-powered tools can make all the difference for retailers looking to stay ahead of the curve, succeed in the marketplace, and give their online shoppers that personalized shopping experience. 

11 Best Use Cases of AI in eCommerce

eCommerce companies are increasingly leveraging AI, machine learning, and deep learning to enhance their images, optimize pricing, and boost their revenue while also improving the overall customer experience. 

These 11 innovative use cases of AI in eCommerce are helping businesses stay ahead of the competition and remain at the forefront of the rapidly evolving eCommerce industry.

1. Streamline workflows

Innovative AI solutions can empower eCommerce companies to increase sales by streamlining workflows, boosting categorization accuracy through metadata encryption, and automating image editing.

For instance, a significant company in the foodtech industry recently employed OCUS' AI Solutions to verify and enhance their images. Thanks to this technology, they successfully fixed the background on 93.5% of the photos, saved 51%, and accurately categorized them according to their website categories with a 94% success rate.

2. Personalized product recommendations

Personalized product recommendations use artificial intelligence to analyze customer data and behavior to provide tailored product suggestions that cater to individual preferences, needs, and interests.

Amazon has been using personalized product recommendations for over 20 years. These are those images of other similar products to boost customer experience during online shopping. Moreover, these recommendations can ramp up those conversion rates. 

Most noticeably, these personalized product recommendations wouldn’t have as big of an impact without custom and professional high-quality images to catch the customer’s eye.  For example, cast your memory on the ‘Popular on Netflix’ or ‘Trending Now’ banners on your Netflix homepage.

3. Dynamic pricing optimization

Dynamic pricing optimization is a strategy that uses AI and machine learning algorithms to analyze customer data and market conditions to set optimal prices for products and services in real time.

Uber's pricing mechanism is a significant example of dynamic pricing, which adapts to the ride's demand, time, and distance to provide a personalized pricing experience for users. 

Similarly, Maxify's dynamic pricing platform in the real estate industry automatically alters property prices to align with the current market demand and changes by leveraging AI technology. 

4. Chatbots and voice assistants in customer service

Chatbots and voice assistants are software programs that utilize AI and natural language processing to comprehend and reply to user inputs, simulating human conversation.

We’d be more than surprised if you haven't encountered a chatbot during your eCommerce experiences in 2023. With a high adoption rate, these AI-powered assistants are crucial for businesses that aim to boost customer support and provide a personalized user experience. 

For example, Alexa, developed by Amazon, is a virtual assistant that operates through natural voice commands that can perform various tasks, such as playing music, answering questions, controlling smart home devices, and providing personalized product recommendations.

Going further, Microsoft’s Bing Chat can now respond to questions with images, charts, and other visual elements, making answers more comprehensive and easier to process, again ramping up the customer experience. 

5. Website personalization

AI-driven website personalization analyzes user behavior, preferences, and other relevant data to deliver tailored experiences for each website visitor.

These tools help eCommerce businesses tailor their website content and layout to individual users, improving the overall user experience. 

For example, the Shopify app, Choice AI, provides AI-based personalization for banners, page content, and product displays, working on desktop and mobile devices without coding.

6. Customer segmentation

Customer segmentation involves using machine learning algorithms to split a customer base into smaller groups with comparable traits or requirements.

In eCommerce, this process can create customized customer experiences that enhance brand relevance, boost sales, and deliver personalized marketing messages and promotions according to customer segments.

For instance, H&M and other global retailers and online stores employ demographic customer segmentation to target particular age markets.

7. Inventory management and sales forecasting

In eCommerce, AI-powered inventory management and sales forecasting involve machine learning algorithms and data analysis techniques. 

The AI system collects sales, customer behavior, and market trend data to forecast customer demand and maintain optimal inventory levels. Online retailers can use this process to optimize inventory levels, forecast customer demand, and improve sales strategies to boost revenue. 

For example, Walmart optimizes its inventory management by analyzing historical sales data, seasonal patterns, and market trends to forecast demand for various products accurately.

8. Supply chain optimization

AI technology is transforming how eCommerce supply chains handle inventory, resulting in more efficient and cost-effective inventory management.

Implementing AI systems that help with inventory management and forecasting also improves supply chain productivity and connections for the eCommerce industry. AI solutions can streamline the supply chain process through the automation of deliveries, shipping, and overall eCommerce supply chain management. 

ECommerce platforms can benefit from AI technology by using Google Cloud’s Vertex to digitally represent their supply chain. This AI tool offers a comprehensive solution for overseeing operations, including visibility from start to finish, event management through alerts, analytics, and team collaboration to enhance efficiency.

9. Automated customer service

Customer service tools powered by AI, like bots, can handle common customer inquiries and issues through human-like interactions.

With the help of AI tools, businesses can efficiently answer customer inquiries. Additionally, the tools can analyze customer interactions like messages to determine sentiment. And it works, with more than 59% of customers rating their customer service interactions at least 8 out of 10.

A standout integration of AI into automated customer service sees the globally popular travel website Expedia leveraging conversational AI assistance to help customers plan their holidays as if chatting with a friendly, knowledgeable travel agent.

10. Retargeting potential customers

AI-powered retargeting tools help eCommerce businesses re-engage with potential customers who have displayed interest in their products but have not yet purchased them.

Using AI solutions can help eCommerce retailers identify and reduce customer churn by anticipating when customers are about to leave their site. The algorithm will collect data on the churn indicators, such as abandoned carts or bounce rate, and then they can leverage completion emails or questions about abandoned carts.

11. Generating content at pace

Many businesses are utilizing generative AI to increase the production of materials for their eCommerce marketing campaigns and make them more suitable for different audiences. 

Generative AI can create product descriptions, blog articles, email campaigns, and social media posts, saving business time and resources. For customer queries, this AI solution can also deliver personalized content, offers, and recommendations and enhance search and navigation features on eCommerce stores.

The Future of eCommerce: AI is here to stay

The integration of AI into eCommerce operations is transforming how online retailers operate and interact with their customers. 

With the continuous advancement of technology, we can anticipate more creative ways of using AI that will enhance customer experiences and boost business growth.

The future of eCommerce is undoubtedly intertwined with AI. By leveraging AI, businesses can streamline operations, gain valuable insights into customer behavior, and provide a more personalized shopping experience.