Artificial intelligence (AI) has revolutionized the e-commerce industry in recent years. One of the most significant ways in which AI is impacting e-commerce is by transforming customer service. AI-powered customer service technologies are becoming more common, and they are helping to improve the customer experience in numerous ways.

This article will discuss how AI improves customer service in e-commerce, with examples of companies using these technologies to their advantage.


AI-driven chatbots are assisting online retailers in offering prompt and effective customer support. Without human assistance, chatbots may provide 24/7 customer service. They can assist clients with information about the products, order tracking, returns and refunds, and other services. For instance, H&M uses a chatbot to assist shoppers in finding products and placing orders on its website.

However, chatbots may not always understand complex customer queries, leading to frustration and dissatisfaction.

Product recommendations

AI is capable of analyzing client data and making tailored product recommendations. E-commerce companies can provide customers with products more likely to be of interest by learning about their preferences and past purchases. For instance, using AI, Amazon suggests products based on a customer’s browsing and purchase history.

Personalized recommendations, however, may be perceived negatively by some customers as intrusive or creepy, which is one of the disadvantages of AI.

Fraud detection

AI can help e-commerce businesses detect and prevent fraudulent activity before it happens. By analyzing patterns of fraudulent behavior, AI can identify potential fraudsters and flag suspicious transactions. For example, PayPal uses AI to detect fraudulent transactions and prevent unauthorized account access.

Related: 7 Potential use cases of chatbots in banking

However, these systems may not always accurately distinguish between legitimate and fraudulent, leading to false positives that can inconvenience and frustrate customers.

Voice assistants

With the rise of voice assistants like Amazon’s Alexa and Google Home, e-commerce businesses can use AI to provide a more seamless customer experience. Customers can use their voices to order products, check order status and get answers to questions. For example, Walmart has integrated its shopping service with Google Home, allowing customers to add items to their cart and place orders using voice commands.

Still, voice assistants might not always understand consumer requests correctly, which could cause annoyance and mistakes during the ordering process.

Image recognition

E-commerce companies can enhance their product search and discovery with AI-powered image recognition. AI can make it easier for buyers to find what they want by examining product photos and recognizing characteristics like color, shape and texture. For instance, Wayfair uses image recognition technology to assist clients in locating furniture and home décor items that complement their tastes and aesthetics.

Related: 5 emerging trends in deep learning and artificial intelligence

However, one disadvantage is that image recognition may not always accurately identify products, especially if they are similar in appearance or if the lighting and background in the image are poor. This can lead to frustration and incorrect purchases for the customer.

The future of AI in e-commerce

As e-commerce continues to evolve, AI technology is playing an increasingly important role in the industry. AI is revolutionizing how online retailers conduct business, from personalizing the shopping experience to improving supply chain management. There are several areas where AI is anticipated to significantly affect e-commerce in the future.

Visual search is one such area that enables users to find things by merely submitting a photo. Retailers can use AI to analyze photos and determine product characteristics like color, style and material. Using this technology, a customer’s browsing history can be used to generate product recommendations.

Additionally, it is anticipated that e-commerce will place more emphasis on AI-powered fraud detection. AI can assist merchants in identifying and preventing fraudulent transactions by analyzing trends in client behavior. The risk of stockouts and overstocking can be decreased by using this technology to improve the accuracy of supply chain forecasts and inventory management.

Finally, thanks to its capability to analyze consumer behavior and make real-time price adjustments, AI can assist businesses in optimizing their pricing plans. Additionally, this technology can be used to design customized sales incentives and promotions for specific clients, fostering client loyalty and boosting revenue.