What does AI mean for e-commerce?

26-09-2019 CloudSuite

Stephen Spielberg’s A.I. Artificial Intelligence came out at the turn of the millennium, but it seems that we have had many false starts since then. AI never got going because computers lacked the processing power to translate even a small part of Spielberg’s fantasy into reality.

AI in e-commerce

That is no longer the case. Computational power has increased exponentially since 2001, and AI can finally make good on its promise.

All the same, the past two decades of expectation have taken their toll. AI may have won the argument, with 85% of companies believing that it offers a competitive advantage, but only 1 in 20 is employing AI extensively today. We can quibble about the meaning of “extensively”, but that is still a significant gap.

What explains this gap? For the background to this blog, we interviewed Saeed Yanousi of Rex, the CloudSuite partner for AI. In his experience, e-commerce marketers are excited about AI, but feel unsure about how exactly it would benefit them. This is unfortunate, because the expertise of specialists such as Saeed means that AI is now within reach of many e-commerce organizations.

This is just one of the misunderstandings that have beset AI. Let’s start by clearing up some of the confusion.

Misunderstandings about AI for e-commerce

AI is only for the big hitters

No longer true. Many e-commerce platforms are partnering with agile AI specialists such as rex.ai that are as adept at these technologies as Amazon and eBay.

AI is the same as Machine Learning or Deep Learning

Not quite. Machine and Deep Learning are part of AI. In Machine Learning, the algorithms modify themselves over time without human intervention to get better at doing a job we ask the model to do. Deep Learning refers to ML in very large and/or multiple data sets of the kind we do not really encounter in e-commerce. Both are examples of AI, which is a broader term for how computers mimic human cognitive functions. Here, we shall simply use the term AI throughout.

AI will ‘take over’ from humans

That’s the idea! As anyone who has ever looked at an Excel spreadsheet or a database will tell you, humans aren’t best equipped to cope with large amounts of information. But computers aren’t fazed by that and don’t need caffeine to keep going.

AI use in e-commerce

As you unleash the power of AI, the data that you have ─ or the real-time data that is ‘happening’ on your e-commerce platform ─ becomes much more valuable to you. But where that value lies is still steered by humans. We are a naturally creative species, and can think outside the box ─ inside the box, AI can do a lot of the work.

A lot of the work ─  but not all. AI is a process. Think of self-driving cars. Completely self-driving cars aren’t rolling off the production line just yet, but many cars already come with self-parking as standard. The same is true for e-commerce, where AI is bringing incremental change.

So let’s look at what AI can achieve for you right now. Above all, that means, personalization.


This is the Holy Grail of e-commerce marketing. Every customer wants recommendations and offers tailored to their needs, but without AI this is hit-and-miss (because humans make mistakes and need caffeine). Irrelevant product recommendations are fatal for two reasons:

  1. They annoy the customer
  2. You lose the sale of what could have been the perfect product recommendation

So personalisation is key to conversion. With AI you can personalise much more effectively and in real time. Two people go to the website of a sports retailer: one looks at football shirts, the other at tennis racquets. They both move on to “shoes” section of the website. Visitor A will see a landing page with football shoes and offers; visitor B is shown the e-tailer’s assortment of tennis shoes.

This is huge, because the recommendations are one-to-one and happen in real-time within 35 milliseconds. You don’t have to wait for A or B to visit your site again; you can get them there and then.

Real-time personalization is the main reason why AI-empowered platforms are seeing a rise in conversion rates of up to 45%, and an increase of 80% in revenue per session..

Email campagnes

We all hate those endless marketing emails that are not relevant to us. That ends with AI, which enables you to send out personalised and relevant emails at the most optimal time, with a subject field that is tailor-made for the customer you are reaching. Email campaigns used to be a blunt instrument, with thousands of customers receiving the same message at the same time. AI can massively fine-tune this and automate process ─ a huge win.

A different search experience

AI aggregates transactional and behavioural insights from all channels to create hyper-personalised search results. The quicker a customer finds the product he is looking for, the more likely it is that he will click on it (and hopefully purchase it). An AI search engine will even come up with sensible out-of-stock replacement results.

AI in your organization

If you want to improve how you personalise your customer experience and email campaigns, AI will be invaluable to you. You will do a much better job ─ and spend much less time doing it. A no-brainer then. 

Just as self-driving cars are slowly becoming a reality, e-commerce business and marketing will be increasingly steered by AI.

Isn’t it time you got behind the wheel?

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