If you are running an ecommerce store, the stakes are sky-high. With so many options available, your customers expect nothing but the best from you. So, you must deliver a customized experience to retain and engage them.

However, challenges like inefficient inventory management, poor personalization, and slow customer service expose many ecommerce businesses to lost sales and decreased customer satisfaction. Traditional solutions often lack the speed and accuracy needed in today's fast-paced digital marketplace.

Integrating AI virtual assistants can effectively address these issues. They leverage several latest technologies, including natural language processing, machine learning, and predictive analytics. Therefore, they can analyze customer data from multiple touchpoints, offer personalized product recommendations, and even manage inventory. 

Also, by integrating AI virtual assistants, businesses can enhance customer experiences, streamline operations, and potentially boost revenue by 10-12% or more.

In this article, we’ll explore eight major AI use cases in ecommerce and how you can implement them to uplift the bottom-line ROI.

AI use cases in ecommerce

Forward-thinking brands are actively preparing for AI integration—38% are investing in AI technology, 30% are partnering with providers, and 29% are training staff on AI capabilities. Also, the latest data suggests that 63% of brands acknowledge AI’s influence in their content marketing, SEO strategies, and website functionalities. 

Let’s look at some major use cases where AI is being extensively used in ecommerce:

1.Hyper personalized product recommendations

How does it feel to open YouTube and immediately see shorts that appeal to your interests? Instant curiosity and satisfaction. That’s exactly what platforms like Netflix and Amazon use to drive engagement.

Netflix adopts an AI-powered recommendation engine to filter around 3000 video titles on its platforms and arrange them into over a thousand clusters based on a user’s preference, past watch history, and online behavior. This helps the platform show only movies that matter to its viewers—an approach vital to helping Netflix generate over $1 billion in revenue.

Amazon uses a similar approach to recommend products to customers. If products A and B are often purchased together, Amazon’s intelligent recommendation engine employs item-based filtering to upsell product B to a buyer who has recently purchased product A and vice versa.

Moreover, AI-based recommendations enhance personalization, and as we already suggested, 91% of consumers will likely shop from brands offering sleek, personalized customer experiences. 

To meet this expectation, integrate an AI-powered recommendation engine into your online store and use it to personalize product recommendations using item and customer data.

2.Chatbots for customer service

A Forbes Advisor study found that 61% of consumers are willing to pay a 5% premium for exceptional customer service. However, relying solely on your team to deliver excellent service can be inefficient and strain your resources.

Also, there’s much room for human errors, delayed support, and inappropriate support, which can put off your customers. Besides, the 2024 HubSpot report notes that 90% want you to respond to their queries as early as 10 minutes—a fit nearly impossible without AI.

Using AI-powered chatbots to handle most routine requests frees up your support team and helps them focus on core customer queries. These bots act as virtual assistants capable of interacting in a human-like manner with customers, providing valuable recommendations and resources, scheduling callbacks, and escalating issues to appropriate agents—all significantly faster than human representatives.

As an omnichannel customer service platform with several AI-powered features, Plivo CX offers an OpenAI-powered self-service chatbot. It is capable of continuous learning in order to provide accurate responses to queries and take the pressure off your team. You can also train it according to your company’s custom dataset and guidelines to guard against misinformation or inconsistent messaging.

3.Dynamic pricing tools

Your pricing strategy is as important as the product itself. If you overprice, customers will switch to competitors, and if you underprice, your ROI will drop. Additionally, static pricing often fails to respond to market demand, competition, and customer behavior, limiting revenue opportunities.

AI solves this problem through dynamic pricing, which automates real-time product pricing based on current market factors, demand, supply, consumer data, stock availability, production costs, and profit margin. 

AI-driven dynamic pricing tools also help you monitor your competitors’ cost labels. Let’s say one of your competitors is offering a discount for a product you also sell. 

AI can immediately detect this discount and competitively modify your price to retain customers. This responsive pricing strategy, driven by AI and real-time data, balances profitability and customer satisfaction.

Uber employs this strategy to modify ride prices during changes in demand, time, and weather variability. 

To do the same, train your AI tool to recognize specific triggers, such as market demand, for the adjustments. While adjusting prices, you should be mindful of your bottom line. It’s always better to avoid sacrificing profitability for lower prices.

4.Customer segmentation tools

According to Campaign Monitor, segmented campaigns result in a whopping 760% revenue increase. 

While you can manually segment your customer base if it is just a few hundred, it’s a different ballgame for ecommerce businesses with thousands of buyers or a bulky audience. The process is often error-prone, time-consuming, and demands hefty human resources.

In this case, you can use AI-powered segmentation tools to do the heavy lifting. These tools can handle more data, analyze them in minutes, and section them into categories based on demographics, purchasing behavior, location, interests, or other relevant criteria. 

Moreover, they can eliminate preconceived biases, such as the idea that pink dresses are for young females and blue dresses for older ladies.

This integration, in turn, enables you to deliver hyper-personalized shopping experiences, from tailored emails and consumer-centric product recommendations to dynamic pricing and targeted promotions, ultimately enhancing customer satisfaction and boosting conversions.

5.Fake review detection

Online reviews add credibility to ecommerce businesses and help convince shoppers in their final purchase stages. At least 93% of shoppers read online reviews before making a purchase, and over 31% say they will spend more with brands that have positive reviews. 

Yes, bad reviews can damage your reputation, and not everyone cares enough to check if they’re fake or real.

To tackle this, AI algorithms analyze the troves of reviews on your ecommerce site based on intent, patterns, customer data, writing format, and real-time data to label fraud-like feedback.

Google applied the same approach to remove 170 million fake reviews in 2023.

6.Fraud detection and prevention

Sopho’s The State of Ransomware in Retail 2024 report shows that 69% of retail businesses were hit by ransomware in 2023. These attacks, from the usual ransom-style to card skimming and disruption of critical operations during cyber sales, continue to pose financial risks to ecommerce businesses.

However, AI can help identify such threats ahead of time by accurately analyzing network traffic for unusual patterns, tracing vulnerabilities, and spotting malicious activities in real time. This is useful for predicting potential threats, isolating affected systems, and automating responses.

AI-powered detection tools analyze transaction patterns to detect high-value purchases or repeated failed login attempts and flag suspicious behavior. For instance, if a customer’s spending suddenly spikes 10x compared to months of steady purchases. This could indicate an account breach and require immediate intervention.

A perfect case study is Mastercard, which has been able to reduce false positives in detecting payment fraud by about 200% and identify merchants affected faster by 300%. 

The payment service uses AI to scan millions of transactions at once, detect possibly fraudulent processes, halt any transfer in or out, and alert concerned banks. 

These smart programs can also assign risk scores to actions based on data like IP addresses, geolocation, payment methods, and customer behavior. 

For instance, if the system detects someone is reusing promo codes and discounts through dynamic proxies, a high-risk score is assigned, and the account is blocked.

7.Voice search optimization

In 2024, over 56% of smartphone and 28% of laptop users leverage voice search to find information and brands. Studies also expect the number of voice search users in the US to reach 157 million by 2026, highlighting its growing consumer adoption. 

With more people resorting to voice search over text search, AI can help streamline your customer experience by allowing them to place orders with voice commands, check inventory, or search for a product without moving a finger.

8.Visual search

Let’s say you took a picture with your friend dressed in a strawberry-colored, striped dress sometime last year, and now you want to get the same style. But you can’t find the right word to describe and search for it despite knowing how the dress looks. 

Visual search comes to the rescue here—simply upload the image.

Amazon introduced StyleSnap, an AI-powered visual search feature that lets users shop with the product images they have. This is also similar to Pinterest’s Lens functionality, which utilizes image recognition and analyzes its billions of datasets to provide relevant pictures in return.

You can also implement the same approach to boost your customers' search experience by placing a camera feature near your text search icon. Achieving visual search is also possible through chatbots.

Implement AI in your ecommerce business with Plivo CX

As an AI-driven, cloud-based customer service platform that lets you connect with customers in their preferred channels, Plivo CX comes with an OpenAI-powered chatbot. 

Our AI bot is trained to make smart decisions that align perfectly with your ecommerce policies. It can quickly and accurately resolve customer complaints and even escalate complex issues to human agents with detailed notes and data when needed.

This means faster resolutions, happier customers, and a more efficient team.

But that's not all! Our AI bot can also handle everyday tasks like processing refunds, tracking orders, modifying delivery addresses, and managing exchanges.

Here are some other powerful features Plivo CX offers:

• Unified communication: Manage all customer conversations across channels like email, voice, SMS, WhatsApp, and live chat from a single, intuitive dashboard.
• Effortless workflow design: Visually build custom workflows and automation with a drag-and-drop interface, no coding required.
• Seamless integrations: Connect Plivo CX with your existing tools, including CRM, ERP, helpdesk, and homegrown systems.
• Data-driven optimization: Track real-time analytics and generate custom reports to gain insights into customer interactions and agent performance.
• AI-enhanced efficiency: Prioritize urgent tickets, ensure brand consistency, and adapt quickly to changes with AI-powered support.
• Rich communication: Enhance interactions with multimedia support, including images, videos, and documents.
• Increased productivity: Streamline workflows with message templates, internal notes, and skills-based routing.
• Comprehensive features: Leverage call recording and barge-in for agent coaching, customizable IVR, multi-language support, and robust security features.

To learn more, book a demo now!