Artificial intelligence (AI) has rapidly evolved from a futuristic concept to an integral part of many industries, with e-commerce standing at the forefront of it all. AI technologies have become critical in revolutionizing e-commerce, improving customer service, streamlining operations, offering personalized experiences, predicting market trends, and more. AI encompasses many technologies enabling machines to mimic and surpass human intelligence. These technologies are then employed in e-commerce to enhance various aspects of the shopping experience, streamline operations, and drive sales. A study by McKinsey found that personalization can increase revenue by 5–15% and improve spending efficiency by 10-30%. 

The growing need to meet customer expectations has spurred the adoption of AI, particularly in the e-commerce industry. Salesforce stated in one of its articles that 76% of consumers expect companies to understand their needs and expectations. AI caters to this demand and enhances the user experience through personalization.

AI-Driven Features Transforming eCommerce Apps

Personalized recommendations

These are considered to be the most impactful features of AI in e-commerce. AI algorithms can suggest products tailored to individual customers according to their requirements by analyzing user behavior and preferences. The majority of users expect personalization when they are shopping online. If personalization is supported with the correct customer data, it can strengthen the customer’s connection with the brand. McKinsey says in a 2021 report that companies leveraging personalization in the shopping journey have 40% more profits than companies that focus less on personalization. Amazon’s recommendation engine accounts for a significant chunk of its sales. Netflix, while not an e-commerce platform, similarly uses AI for content recommendation, showing the power of personalization in delivering sales and encouraging user engagement.