Assignment #1

Topic: Role of Artificial Intelligence in E-Commerce

Submitted to:
Sir Naveed
Submitted by: Areesha Zahra
BSc(Hons)Food Science And Technology
Roll no. FSAT51F23S027

Contents:
• Artificial intelligence:
• INTRODUCTION
• Types of Artificial Intelligence
• 1. Weak Artificial intelligence:
• 2. Strong Artificial intelligence:
• Role of artificial intelligence in eCommerce industry:
• 1. Search has become more customers centric within online stores
• 2. Customer experience has got more personalized
• 3. Much better sales processes
• 4. Targeting potential customers
 • 5. Better and efficient logistics
• 6. Advance Visual Search Engine:
• Cyber-security
⦁ Intelligent Data Management
Conclusion

Artificial intelligence:
Artificial intelligence has the powerful ability to acquire and analyze large volumes of
data and provide decisions for action. E-commerce is now adopting this technology to identify
patterns based on browsing, purchase history, credit checks, account information etc. This data
collected then form the basis of creating customized recommendations for each customer.
Google and Microsoft are already investing into new AI initiatives. Many e-commerce
businesses have started implementing different forms of AI to better understand their customers,
and provide an enhanced customer experience. This paper highlights the role of artificial
intelligence in e-commerce and its application in different areas of e-commerce.

INTRODUCTION
Artificial intelligence is the engineering and science of making intelligent machines and
intelligent computer programs. Artificial intelligence is different from psychology because it
emphasis on computation and is different from computer science because of its emphasis on
perception, reasoning and action. Artificial Intelligence is to develop intelligence in the
machines or software and provide them the ability to think as humans. John McCarthy is
known as the father of Artificial Intelligence. The eCommerce industry is on its way to
grossing $700 billion by the year 2022. The use of artificial intelligence or machine learning
in eCommerce is paving the way to the online portals that are easy to use, safe, and
profitable.
AI is one of the most talked topics in this digital world. AI offers the industry with smart and
innovative business solutions. It adds a plethora of valuable elements and features to the e-
commerce platforms.
Now, brand performance and user experience are balancing as artificial intelligence or machine
learning technology is changing the tedious working pattern. Manufacturers, retailers and digital
startups are setting a new example in this industry.
Due to continuous competition for clients, brands are enabling artificial intelligence in their
enterprise. AI is one of the fastest successions of technological breakthroughs owing to various
smart solutions that are transforming the e-commerce industry. The advancement of new
technologies has completely changed the present scenario of the eCommerce industry.
Artificial intelligence has 2 types:
1. Weak AI.
2. Strong AI.
1. Weak Artificial intelligence:
In weak artificial intelligence, machines behave like an intelligent human. Machines with weak
artificial intelligence have all abilities like thinking, moving, talking but are programmed to do
so. In the chess game, the machine has the ability to play but it does not possess any thinking
ability like humans. The machine is programmed to play chess and make smart moves to
compete with other players.

2. Strong Artificial intelligence:

In strong AI, machines actual ability is like humans. It is based on the concept that machines can
be programmed like the human mind. They can think, make decisions, and have perceptions and
beliefs. E.g. the artificial intellectual supercomputer “WATSON‟ invented by IBM. Strong AI
does not currently exist. It is estimated by some experts that it may be developed by 2030 or
2045.

Role of artificial intelligence in eCommerce industry:

1. Search has become more customers centric within online stores
It has been seen that due to lack of customer-centric search results in eCommerce websites, a lot
of users actually drop off. By making use of the AI tools and machine learning, search results can
be significantly improved. Moreover, AI aided search results are also gaining prominence, that is
luring businesses to provide a customer-centric experience. In this case, videos and images, such
as logo, style and product are tagged, organised to provide visually relevant search for customers.
Pinterest has utilized the image recognition software for the chrome extension. In this process,
customers are able to search for images across the web as per the choice of the product.
2. Customer experience has got more personalized
In case of a personalized customer experience, Artificial Intelligence can be used
in eCommerce portals for personalized experiences. This is possible by making an analysis of
comprehensive data and accordingly, products are recommended.
As per the study conducted by Boston Consulting Group (BCG), retailers who provide
personalized experiences have experienced around 6-10% increase in sales, which is two or three
faster compared to other retailers.

3. Much better sales processes

In the previous era, sales depended heavily on yellow pages and such conventional means to
attract customer attention. However, sales processes have moved on a lot from those days and
now retailers make use of different kind of digital platforms. Sales teams nowadays use AI
integrated CRM systems that cater to customer tastes and preferences. Moreover, AI can answer
customer queries, solve problems and even identify new sales opportunities.

Getty Images has effectively made use of integrated AI tools in order to identify data to get an
idea of which businesses use images from the competition. Accordingly, the sales team of Getty
Images lures more target audiences and woos new businesses.
4. Targeting potential customers
A huge customer base has its advantages as well as challenges. Due to the numbers, it gets a bit
difficult for sales and marketing teams to track prospective leads.
According to a study done by Conversica, around two-thirds of companies do not follow up on
inbound sales leads. To resolve this issue, more and more eCommerce companies are taking help
of AI in order to track consumer behaviour by observing their in-store behavior (using facial
recognition software) and online customers through different offers.

5. Better and efficient logistics

Making use of Artificial Intelligence in logistics also ensures a seamless and efficient delivery
process. Nowadays, warehousing uses automation to a great extent and machine learning
algorithms are used for automated warehousing operations. Most of the eCommerce giants, such
as Amazon, Alibaba, eBay, and others are making use of AI to a great extent in the form of
machine learning and robotics. It is expected that the speed and efficiency will be improved to a
great extent and it will also cut costs to a great extent.
If AI is used across different areas of eCommerce, such as warehousing and delivery, customer
service and other internal operations, eCommerce will be boosted to a huge extent.

6. Advance Visual Search Engine:

In recent months, Artificial intelligence introduced a visual search engine in the

eCommerce industry. This is one of the most exciting trends that help the user find what
they actually want with just a few clicks.
Hence, we can say that AI enables the visual search. With a simple click, the user can get
appropriate and desired results. An image can be helpful to find a better size, color, and
quality to identify product brands and names on search engines. Depending on the image,
the user can achieve the desired result.
• Cyber-security
AI is not ready to replace traditional solutions of cyber security but has a helping hand in
the lending. The threat to e-commerce platforms and customer data is always a great
problem. By incorporating AI and deep learning concepts into security solutions,
platforms can save data from cybercriminals.
Deep Learning and AI enable cyber traffic solutions to "outliers" in network traffic,
which can easily predict intrusion in an attempt.
• Intelligent Data Management
AI-based data management doesn’t need to organize raw data before using it. In fact,
things work better when it does not. By using data lakes, artificial intelligence can leave
e-commerce platform data in the unstructured and raw until it is processed.
But data has to be structured to be used efficiently, right? Not with artificial intelligence.
By placing product descriptions, images, and customer data in raw form, artificial
intelligence does not need to sort through data structures while using data for different
web applications.
People users of artificial intellegence in different countries:

Conclusion
Today, the eCommerce industry is in full swing in satisfying its customers in every
single aspect right from understanding their requirements, predicting their shopping
interests, recommending the products that best fit their interest to offer round the clock
customer support. With artificial intelligence, the eCommerce industry has quickly
changed the way people sell shop and browse things on the internet.