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    Artificial Intelligence in Ecommerce

    A Digital Shelf Guide

    Artificial intelligence (AI) in ecommerce has the potential to promote the free flow — and expansion — of product information and data between brands, retailers, distributors, and, ultimately, consumers.

    AI also has the potential to improve the shopping experiences, ever-evolving in intricacy, that consumers have across the digital shelf.

    Everyone wants to know which product solves which problem, where to buy it, for what price, and why consumers may choose one over another — and they want to be in the know, like, now.

    But with the increasing amount of information that’s becoming increasingly easy to access, across an increasing number of channels, through increasingly intelligent tools like ChatGPT and Gemini, there’s an increase in responsibility for organizations to disseminate accurate information and safeguard sensitive data — and, above all, maintain their humanity even at the helm of advancing AI technology.

    Examine the background and foundations of AI in ecommerce, explore common ecommerce AI tools used by businesses and consumers alike, read about benefits and use cases, and digest some next steps for your organization to consider before digging deeper into AI.

     

    What Is AI in Ecommerce?

    What makes AI, AI? Isn’t ecommerce just commerce? How (and why) do the two fit together? Why is it important to support this connection?

    AI in Basic Terms

    What mainly separates artificial intelligence from, say, traditional intelligence is the presence of a computer or modeled system rather than a living, sentient being.

    This computer can complete tasks on par with or beyond those typically reserved for humans, such as processing visual, auditory, and written information, all within the context of current and historical data.

    Ecommerce in Basic Terms

    Ecommerce, or electronic commerce, is any transaction that occurs on a network-connected entity. In other words, it’s any transaction that occurs online.

    In our digital world, ecommerce happens on the digital shelf, which makes just about every commerce interaction an ecommerce transaction.

    How AI and Ecommerce Work Together

    With so many connected devices and computers, this further increases the odds that AI has played a role in each ecommerce transaction. This makes the two terms even more inextricably linked.

    Properly enabling — or directly employing AI tools for ecommerce at your organization — plays a huge role in how quickly and effectively your products get to market and how consumers interact with them along their buying journey.

    Work With AI for Ecommerce and Digital Shelf Success

    An increasing number of buying journeys occur partly or entirely on the digital shelf. Buying journeys continue to involve more digital touch points, allowing more brands more ways to connect with more consumers.

    More touch points, more products, and more consumers can lead to increasingly competitive, complicated paths to purchase. But AI can help your target customers cut through the noise for an experience that feels more personal (and keeps them coming back).

    But how did AI come to fuel these personalized experiences that consumers crave?

     

    A Brief History of Artificial Intelligence in Ecommerce

    AI’s history originates in academic settings and research labs, dating back to the 1950s and ‘60s. Several decades passed before AI was applied in business settings.

    The Early Days of AI in Ecommerce

    The boom of the internet in the 1990s and 2000s — and, particularly, the rise of the ecommerce giant Amazon — fueled the integration of AI into ecommerce with its knack for offering personalized recommendations.

    How AI in Ecommerce Picked Up Speed

    In the 2010s, AI started “learning” more rapidly, gaining the ability to recognize and analyze patterns and written or verbal information, then curating appropriate responses. Businesses began further adopting AI for customer service and inventory management.

    AI in Ecommerce Now

    Well into the 2020s, the usage of AI, particularly generative AI (GenAI) in ecommerce, continues to grow. An IBM study estimates that 35% of businesses use AI — and even more (44%) are working to embed it into their applications and processes.

    IBM Research Graphic AI in Ecommerce Business Use

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    AI in Ecommerce Terms To Know

    To better understand AI in ecommerce — and the associated components and technology — here are some related terms to know.

    Ecommerce Term

    Description

    AI Writing Assistant

    What Is an AI Writing Assistant?

    An AI writing assistant is a program that automatically develops written copy based on user-provided prompts.

    Chatbots

    What Are Chatbots?

    Chatbots are computer programs that mimic a human in written or spoken conversation. A chatbot can perform tasks or process communication and respond accordingly.

    Computer Vision

    What Is Computer Vision?

    Computer vision is a field of computer science related to using AI and machine learning’s ability to process visual information, like images and videos.

    Conversational Commerce

    What Is Conversational Commerce?

    Conversational commerce occurs when consumers interact with businesses through messaging apps to access support, ask questions, or purchase products — for example, with an ecommerce AI chatbot.

    Data Mining

    What Is Data Mining?

    Data mining is the process of applying machine learning techniques to large datasets and conducting a statistical analysis of these datasets to recognize patterns and other valuable information within the data.

    Digital Shelf

    What Is the Digital Shelf?

    The digital shelf is the collection of diverse and rapidly evolving touch points that shoppers use to engage with brands and discover, browse, and purchase products.

    Digital Touch Points

    What Are Digital Touch Points?

    Digital touch points are places where customers interact with a business online or through a mobile app.

    Digital Transformation

    What Is Digital Transformation?

    Digital transformation is an approach to using technology to integrate, automate, and streamline otherwise manual or time-consuming tasks.

    Ecommerce Automation

    What Is Ecommerce Automation?

    Ecommerce automation is when businesses use software and other systems to automatically complete certain small or repetitive tasks, which frees employees up for more value-adding tasks.

    Ecommerce Chatbots

    What Are Ecommerce Chatbots?

    Ecommerce chatbots are technologies — often powered by artificial intelligence and machine learning — that help businesses engage with customers.

    Generative AI (GenAI)

    What Is GenAI?

    GenAI is artificial intelligence that can generate text, images, video, or other data.

    Natural Language Processing (NLP)

    What Is NLP?

    NLP is an area of AI that allows computers to communicate and understand human language and gradually improve through machine learning.

    Machine Learning (ML)

    What Is ML?

    Machine learning is a method of training AI using traditionally human approaches like tasking AI to learn from examples and experiences versus giving it exact instructions to complete a task.

    Machine-Learning Personalization

    What Is Machine-Learning Personalization?

    Machine-learning personalization is the process of using data sets and data modeling — typically within an artificial intelligence solution — to tailor a webpage, product, or piece of content to a person or group.

    Personalization

    What Is Personalization?

    Personalization is the process of tailoring something — such as a piece of content, a sales funnel, or marketing materials — to a particular individual’s or group’s interests and preferences.

    Voice Search

    What Is Voice Search?

    With voice search, a user speaks into a device, such as a compatible smartphone, app, or search engine, and the device answers the question or completes the command.

     

     

    Pros and Cons of AI in Ecommerce

    There’s a lot of information about AI to absorb. Whether you (knowingly) use it every day in your work (or, during scroll breaks on your small screen), it can be hard to wrap your head around everything that AI can offer.

    Here are the pros and cons of artificial intelligence in ecommerce at a glance.

    Pros of AI in Ecommerce

    In large and small organizations, some of the pros of AI in ecommerce are:

    • Consistent, accurate data through well-defined rules and parameters;
    • Operational efficiency through the automation of repeatable tasks; 
    • Higher brand engagement and recognition through search engine optimization (SEO);
    • Greater security for organizations and consumers;
    • Intelligent inventory management and order processing;
    • Cost and time savings, plus increased speed to market; 
    • A deeper understanding of your customer base; and
    • Higher, more predictable conversion rates and demand. 
    Cons of AI in Ecommerce

    In large and small organizations, some of the cons of AI in ecommerce are:

    • Limited, robotic-sounding product and brand content;
    • Inaccuracies from generative AI content left unchecked by a human editor;
    • Security risks from a lack of employee training;
    • Consumer (or employee) hesitancy to interact with artificially intelligent systems; and
    • The fast pace of AI technology’s growth and change.

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    AI in Ecommerce Examples

    Even for late or hesitant adopters, ecommerce professionals and digital marketers alike probably interact with AI far more than they realize. The same goes for consumers.

    Popular AI Examples

    Each of these examples of AI’s abilities, for both information and product data, is likely activated at least once in the course of your day, if not hundreds of times per hour as either a professional or a consumer:

    • AI overviews from popular search engines or visual and voice searches;
    • Content and product recommendations; and
    • Spell-checking, grammar and tone suggestions, predictive text, and auto-translation.

    These examples of virtual assistance are (typically) natively embedded in products and services you’re already using, likely via Apple’s Siri, Google’s Assistant, Amazon’s Alexa, or Meta. You generally don’t have to go out of your way to use these tools.

    Other powerful AI tools for marketing and ecommerce professionals go beyond just ChatGPT and can be used at all stages of the sales cycle — starting with ideation and content creation through churn prevention. For example, Midjourney can generate imagery and Google Analytics 4 can help measure content performance. 

    More AI Examples

    More examples of AI available for businesses to leverage are expanded on in this section, including:

    • Generative and creative AI;
    • Virtual reality (VR) and augmented reality (AR) for futuristic selling; 
    • AI for personalization and channel segmentation;
    • AI for customer service; 
    • AI inventory and order management; and
    • AI for demand forecasting and dynamic pricing.
    Generative and Creative AI, VR, and AR

    If humans created AI, how can AI create better than humans can? (It can’t.) A great way to think of using AI is for repurposing existing content. In a pinch, for cost-savings or otherwise, AI can create content and images for you — it just can’t replace your entire product catalog.

    Artificial Intelligence: Generative vs. Creative AI Uses

    Video Source: Salsify

    What humans can’t do, however, is directly visualize versions of products to scale. VR and AR will become increasingly valuable in selling items like furniture, clothing, and even makeup. 

    L’Oréal Paris virtual makeup try-on tool as an AI in ecommerce example

    Image Source: L’Oréal Paris

    In this virtual-try-on example, beauty brand L’Oréal Paris offers an “accurate and inclusive skin tool” with tips and step-by-step instructions to ensure all shoppers find their perfect look — bridging the gap between digital and physical shopping experiences.

    AI for Personalization

    If AI makes it easier for companies to bring their products in front of consumers, won’t that just increase the number of options? Won’t shopping just get increasingly difficult? Enter personalized recommendations — the cure for any potential decision fatigue.

    According to McKinsey & Company, nearly three-quarters (71%) of consumers expect companies to offer personalization, and if they do, 78% are more likely to recommend them to family and friends — word-of-mouth being arguably the most powerful review network.

    AI for Customer Service and Experience

    On the topic of personalization and the customer experience, another top example of AI is ecommerce chatbots. They can enhance the customer experience (in most cases) by capturing contact information, fielding simpler queries, and starting support tickets. 

    Spanx virtual styling assistant chatbot as an AI in ecommerce example

    Image Source: Spanx

     

    For shapewear and apparel brand Spanx, a virtual styling assistant greets shoppers and determines what they want to chat about before passing them along to a live agent.

    And, as noted by SmallBizGenius, chatbot usage is popular among smaller businesses — and can reduce operational costs by up to 30%. AI workflows can also trigger contact nurturing or alert you to security threats.

    SmallBizGenius Research Chatbot Usage Salsify AI for Ecommerce Graphic

    AI for Inventory and Order Management

    Another necessity for scaling and keeping your customers happy? Actually keeping your products in stock. And, beyond that, ensuring they reach customers quickly and efficiently — AI might even be able to reduce returns. AI can make your inventory management and order processing efforts more intelligent thanks to pattern recognition between your data and the market at large. 

    Columbia warranty claim support with AI in ecommerce example

    Image Source: Columbia

    Sporting goods brand Columbia offers a great example of order management and customer care post-delivery through their warranty claim page — featuring an option to easily submit a claim or use a chatbot, even offering support for Spanish speakers. 

    AI for Demand Forecasting and Dynamic Pricing

    Pattern recognition also lends itself to sales and demand forecasting as well as dynamic pricing abilities, so your organization can focus on improving your product and experience — not worrying about how much you’re going to sell or who’s going to buy what. And, not to mention, consumers will appreciate price reduction opportunities. You’ll appreciate offering informed discounts.

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    How Ecommerce Businesses Can Use AI With Success

    The uses and applications of AI for ecommerce businesses — including brands, retailers, and distributors — are only growing. Every organization operates differently and can find different value as they integrate AI into their workflow.

    Will AI Steal Your Job? (Hint: The Answer Is No)

    Thinking of AI as a scary, all-powerful, job-stealing entity is a bit of a misnomer. In actuality, it’s changing the nature of work for ecommerce and marketing professionals, serving as an additional tool in your toolbox.

    A (human) creative department and a dedicated legal team are still invaluable, as is thought leadership from stakeholders — that will never change. Instead, AI enables greater efficiency and can allot more time for the tasks these teams actually enjoy. That’s a win for everyone.

    Ecommerce AI and Ideation: Your Competitive Advantage

    AI is particularly useful in the ideation phase. Thinking of AI as a “thought partner” instead of something that can do all the work for you can help provide an alternate perspective and spur inspiration — especially if your colleagues are unavailable for a rap session.

    AI won’t have all the answers, but it can speed up the rate at which you digest new concepts that you can then put into your own words. It’s even possible to humanize your brand messaging with AI tools. AI can provide you with outlines or baseline content that you can then inject more flavor and personality into.

    Artificial Intelligence: A Thought Partner

    Video Source: Salsify

    Ecommerce AI and Iteration: Becoming a Content Powerhouse

    Another way that implementing AI can turn your organization into a bunch of speed demons? The rate at which the right GenAI tools can speed product content creation across your entire product catalog. It can get your products to market better, faster, and stronger — that is, more suited for each audience and channel.

    AI can help determine the best channel and customer segmentation and serve up seemingly one-of-a-kind experiences for consumers, no matter which platform or retailer they’re shopping from. After all, 76% of consumers become frustrated if companies don’t deliver personalized experiences, per McKinsey & Company.

    GenAI is even reshaping the future of product development thanks to its growing ability to predict the wants and needs of consumers based on feedback and suggest products that aren’t even on the market yet.

    Ecommerce AI and Optimization: Successful Scaling

    If more of your content — not just your superstar products — is constantly optimized, these efforts won’t go unnoticed. AI can easily improve your search rank and help your organization differentiate in the most crowded marketplaces to stand out among consumers.

    Imagine meeting complex, ever-changing retailer requirements automatically. AI can do that. And, with your time savings, you can easily justify expanding your retail network and channels.

    Artificial Intelligence: Successful Differentiation

    Video Source: Salsify

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    Shoppers and AI: How Do They Feel About It and Use It?

    More than half of consumers (52%) are interested in AI that assists them through “a product, website, or feature experience,” according to a report by SurveyMonkey.

    However, trust in AI is higher among younger generation groups, and perhaps it’s because younger generations understand it better, according to Salsify’s “2024 Consumer Research” report.

    Hesitancy or not, AI tools for ecommerce can support consumers in the discovery, consideration, and buying stages of the buyer’s journey.

    AI in the Discovery Phase

    How can AI support a consumer in the discovery phase of the buying journey? According to SurveyMonkey’s report, “42% of customers appreciate AI-driven product recommendations.” 

    SurveyMonkey Research Shoppers AI Driven Personalization AI for Ecommerce

    For example, a consumer may type “men’s rain jackets” into their preferred search engine or retailer search bar. If the consumer were to just go with this query, which isn’t highly specific, there would be a daunting number of results.

    Before submitting their query, the search engine will likely suggest several more, increasingly specific queries (either based on past searches from that same consumer or others), such as “men’s rain jackets waterproof with hood,” “Patagonia men’s rain jackets for sale,” and “Patagonia men’s rain jackets for sale used.”

    The query gets more specific based on the data mining ability of AI and related tools — that is, using past query data to notice and even predict patterns. Perhaps this user has searched for Patagonia products before or frequents resale or secondhand marketplaces. 

    AI in the Consideration Phase

    How can AI support a consumer in the consideration phase of the buying journey? According to Salsify’s research, AI tools have started to spur a small number of sales, with 9% of shoppers recently buying a product after using a virtual try-on tool and 8% of shoppers buying a product after using a virtual tool to preview placement.

    For example, Wayfair’s Room Planner tool can help shoppers better visualize their space (true to size) and dream up new decor prior to purchase — from platform beds to pothos planters. 
    Screenshot of Wayfair room planner AI in ecommerce tool

    Image Source: Wayfair

    Similar AR tools are available from Target, The Home Depot, and Amazon. Providing comprehensive specs to these retailers or enabling AR will allow your products to show up in more customers’ homes (literally).

    AI in the Decision Phase

    How can AI support a consumer in the decision phase of the buying journey? As discussed, personalization and product recommendations can go a long way for consumers who feel they have too many options.

    For example, a shopper with neck pain (heaven forbid) might be at their wit’s end with their current pillow. But maybe they don’t know what to look for in a pillow for side sleepers with neck pain — especially since every option can be labeled “the best,” without much to back it up.

    Tech-savvy shoppers could research their options via ChatGPT, which will not only recommend popular brands for side sleepers with neck pain, but will also provide them with specifications to consider, like firmness and material.

    Less tech-savvy shoppers would benefit from product recommendations and ads to help them find the pillow of their dreams.

    And if, from a lack of sleep, either shopper adds a few pillows to various carts but then doesn’t complete their purchase, AI-powered abandoned cart reminders (such as those from Alexa) can alert them to complete their purchase or if one drops in price.

    Even if their purchase doesn’t work out, “59% of customers would use AI to return a purchase,” per SurveyMonkey.

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    Get In on the Innovation With an Ecommerce AI Strategy

    Innovation doesn’t happen in a vacuum — and AI cannot drive innovation on its own. Humans are a crucial part of the equation, and the next big season of innovation at your brand is likely just a few clicks away.

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    Tips for Using AI To Build a Winning Ecommerce Strategy

    Here are some tips for employing AI at your organization:

    • AI fixes data problems, not hard problems: Use AI for well-defined processes, scale up, and repeat in other cases — this gives your teams more time for critical thinking.
    • AI can help you get more personal: AI’s talents include analysis and prediction — it can easily clue you in on what recommendations to send consumers and drive upsell.
    • AI helps with regulatory compliance: Some regulatory agencies and retailers change their requirements hundreds of times per year — to avoid penalties and keep up, use AI.
    • AI can help cut costs: Implementing AI workflows with human checks or AI-on-AI checks can speed time to market and boost efficiency.
    AI: Productive Play

    Bigger career or organizational challenges likely can’t be solved without creativity. And fruitful creativity requires freedom to daydream, experiment, and play. This begs one final question, can AI be fun?

    Artificial Intelligence: Can It Be Fun?

    Video Source: Salsify

    The more you play around with AI, the more you’ll learn — after all, play is how humans learn, according to Gonzalez. And, the more you play, the more your intuition will take hold, kickstarting inspiration and catalyzing growth.

    Better employment of AI at your organization can also come from a better understanding of how to speak AI’s language and how much legwork it can do for you.

    For example, by plugging in the following prompt to ChatGPT, you can identify your unique selling propositions (USPs) when compared to competitors: 

    Identify the unique selling propositions of [BRAND NAME] compared to the following competitors: [COMPETITOR NAMES].

    Once these selling points are identified, you can refresh your brand’s messaging or strategy accordingly.

    You can even take it a step further and request AI to update your product or brand content by infusing these USPs. A step further still? Conduct regular keyword research with AI to ensure you always rank near the top of the search. 

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    Risks and Limitations of Ecommerce AI

    Your organization is welcome to (try to) ignore AI. But, as you’ve likely learned from this post: No risk, no reward. And, also, it’s more likely than not that your organization is directly employing or interacting with AI in some capacity. Getting more familiar with the risks of AI can help you get more comfortable choosing the right tools and practices for your organization. 

    Top Risks of Using Artificial Intelligence in Ecommerce

    Here are some risks of artificial intelligence in ecommerce to consider:

    • Data errors or misuse: Arguably the biggest risk to your organization’s image? Leveraging bad data or mishandling data. (However, this is possible with or without AI.)
    • Poor AI practices: Not conducting training, human checks, or carefully selecting the right AI tools for your organization can be costly.
    • Avoiding AI and automation: While there are risks with any fast-paced, iterative technology such as AI, it’s a risk in itself to forego the advancements that AI can bring to your organization.
    Limitations of Artificial Intelligence in Ecommerce

    Here are some limitations of artificial intelligence in ecommerce to consider:

    • AI can get things wrong: AI is very far from being all-knowing, all-seeing, and always right — human judgment and checks can go a long way.
    • Consumers may prefer a human touch: The embrace of AI by consumers will likely never reach 100%, and, in some countries, customers far prefer chatting with live agents.
    • AI is still evolving: Though developers aim to improve AI tools, very few solutions are foolproof, and it’ll likely take your organization time to figure each one out.

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    Ecommerce AI Ethics: Questions To Consider

    Artificiality isn’t free of consequences. So often, people (and the organizations made up of who else, other than people) are applauded for acts of authenticity, honesty, and transparency. Likewise, organizations that exhibit strong values such as these attract not only employees, but customers.

    When it comes to the growth of AI and your business, it’s no longer a matter of if you choose to infuse it into your practices, but how. Internally, if not also externally, aligning your business’s ecommerce AI strategy and ethics policy will help ensure you reap the benefits of this technology and mitigate risks.

    Here are some questions to facilitate discussion and alignment of your stakeholders and employees. Businesses of any size or industry can benefit from having these conversations. 

    10 Questions To Help Develop a Strategy for Your Organization’s AI Ethics
    1. What are our goals for integrating AI and/or solutions that use AI into our tech stack?
    2. What questions do we have regarding AI for our solution providers?
    3. Which department(s) will be using AI tools?
    4. How often will we update or train our employees on AI usage?
    5. How does our business use and define original content and data?
    6. How does our organization store, collect, and use data?
    7. Which department(s) will check the data AI has interacted with?
    8. Are there content or data sets that we will bar from AI involvement?
    9. What specific AI risks might our organization face?
    10. Will we publicize our AI usage guidelines to the public?

    Artificial Intelligence: Salsify Strategy on AI and How We Can Innovate Together

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    The Future of AI in Ecommerce

    The future of artificial intelligence in ecommerce is synonymous with automation. Though no one can predict the full extent (or evolution) of AI’s involvement in buying and selling goods on the digital shelf, it’s safe to say it’ll expand.

    From automating (or creating) custom orders for repeat customers or developing new product iterations based on feedback, to intelligently recommending sustainable materials swaps and predicting demand, the possibilities are endless.

    For brands, retailers, and distributors that don’t want to fall behind the times of necessary digital transformation, what is the vehicle through which automation moves? A powerful product experience management (PXM) platform.

    Although, you won’t find full, reliable automation capabilities that help you keep up with the demands of the digital shelf in just any product experience management solution — you need a next-generation PXM solution.

    A next-gen PXM solution enables all your products across all your channels to meet ever-changing requirements and be backed by intelligent optimization to drive further visibility and sales, so your enterprise can enter its next stage of growth.

    And, as consumers (and society at large) continue to favor personalization, the right PXM solution also uses AI to automate the optimization process, for as much of the work as possible, as the combination of channels, products, and change rapidly increases in complexity.

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    Resources for Using AI in Ecommerce

    Though the list of applications of artificial intelligence in ecommerce grows every day, the value of ecommerce AI tools is lost without leaning in and giving that keyboard a workout. So much of AI’s value is tied to productivity, and much of any professional’s worth is also tied to output (sometimes in excess).

    AI, when used properly, can help extensively.

    However, AI’s ability to support your business processes and boost your efficiency is only as effective as your trust and knowledge of these tools. Understanding how to securely leverage AI capabilities and enact the right human checks and balances can be overwhelming.

    Finding the right AI-powered solution partner can help you navigate the intricacies of AI and cultivate a strategy of testing and learning for digital shelf success.

    Your AI Test-and-Learning Partner

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