AI's Growing Influence in E-Commerce: The Future of Online Retail

09-01-2024 | By Gary Elinoff

Artificial Intelligence (AI) is revolutionizing the E-commerce industry. It is changing the way businesses interact with their customers, as well as in the way they complete offline tasks. 

A lot of the excitement is centered around ChatBots, AI programs that mimic human-to-human conversations. The now-familiar ChatGPT is a ChatBot, and specialized E-commerce ChatBots can take the place of human customer service representatives. They can also respond to verbal inquiries and help customers zero in on the specific product that they need.  

On the backend, away from customers, AI can access vast amounts of data to estimate the amount of inventory needed to keep up with expected sales volume. It can also make pricing calls to maximize profitability and can actually write effective product descriptions designed to boost sales and minimize returns.   

With online fraud having emerged as a major threat to the revenue of many online businesses, AI can aid shopkeepers here, too. With access to vast stores of company data, AI detects the patterns online criminals employ and derives methods to thwart them.  

AI: The New Power Player in E-commerce

It's not just about chatbots anymore. The e-commerce landscape is witnessing a seismic shift, thanks to AI's expanding role. Picture this: AI tools, as CNBC reports, are now adept at automating tasks that once ate up hours of a seller's day. We're talking about crafting those catchy product descriptions, tweaking them to play nice with search algorithms, and even orchestrating complex ad campaigns. This isn't just a time-saver; it's transforming how customers interact with products online, offering them richer, more detailed information at a glance.

Take eBay's 'Magical' Listing Tool, for example. As their tech blog reveals, this AI marvel takes a simple photo and turns it into a full-fledged product listing. It's like having an assistant who can whip up titles, descriptions, and neatly file each item into its right category. Over at Shopify, as their YouTube showcase 'Magic' tool illustrates, the AI is busy empowering merchants to craft compelling marketing campaigns and streamline customer interactions, all with a few clever algorithms at work.

This is more than just a tech upgrade; it's a game-changer. What used to be the domain of the big players in e-commerce is now accessible to the small and medium-sized entrepreneurs, leveling the digital playing field in a way we've never seen before.

As described in a CNBC article[1], generative AI tools are relieving online sellers of many of “the more labor-intensive, time-consuming and mundane tasks that sellers tend to hate”. These include writing product descriptions specific to the shopkeeper’s customer base, as well as the tasks of building advertising campaigns and generating business reports.    

AI is already supercharging the bottom line for online retailers. Image source:  

As we shall see, these powerful new AI tools are available not only to giants like Amazon and eBay but also to the proprietors of small, specialized online stores.  

AI: The Game Changer in E-commerce Strategy

Think of AI in e-commerce as not just a tech upgrade, but a whole new playbook for business strategy. It's like having a crystal ball, but better. AI-driven predictive analytics are giving businesses, big and small, the power to see into the future of market trends and customer desires. This isn't just about stocking up on the right products; it's about crafting marketing campaigns that hit the mark every time and creating shopping experiences that feel tailor-made for each customer.

And here's where it gets really interesting. AI isn't just making shopping easier; it's turning it into a conversation. By sifting through mountains of customer data, AI is playing the role of a digital shopping guru, offering personalized recommendations that feel like they're coming from a friend who knows your taste. This shift is redefining the shopping experience, making it more interactive, more personal, and a whole lot more engaging.

Linking AI in E-commerce with IIoT

Now, let's bridge AI in e-commerce with the Industrial Internet of Things (IIoT). Imagine the power of AI not just in your online store but also in your warehouse, where IIoT devices are tracking inventory in real-time. This combination is a match made in tech heaven. With AI and IIoT working together, businesses can automate and optimize everything from inventory management to supply chain logistics. It's like having a super-efficient assistant who's always two steps ahead, ensuring that your business runs like a well-oiled machine.

This synergy between AI and IIoT is more than just a convenience; it's a transformative force in e-commerce. It's enabling businesses to operate with a level of efficiency and insight that was once unthinkable. For the savvy e-commerce entrepreneur, this is an opportunity to leapfrog ahead in a competitive market, leveraging the power of AI and IIoT to create a business that's not just efficient but also intuitively aligned with the needs and wants of its customers.

IBM’s Watson – the Granddaddy of them all! 

While ChatGPT is today’s toast of the town, we have so soon forgotten that day, not so long ago, when IBM’s pioneering Watson shocked the world. Named after the company’s founder, Thomas J. Watson, Sr., Watson amazed everyone in 2011 when the generative AI platform beat Ken Jennings, the merely human champion of TV’s Jeopardy quiz show.  

As described in an article published in The Atlantic[2], David Ferrucci, Watson’s lead developer, describes how “His team fed Watson more than 200 million pages of documents—from dictionaries, encyclopedias, novels, plays, the Bible—creating something that sure seemed like a synthetic brain. And America lost its mind over it.”  

But glory is fleeting. You don’t hear much about Watson these days, and many criticize IBM for dropping the ball; however, Watson still survives, but in new, evolved forms. To borrow a phrase from UNIX, it seems to have been “forked” into specialized roles central to a variety of IBM products and services. These include IBM Watsonx, IBM Watsonx Orchestrate, IBM Watsonx Code Assistant and IBM Watsonx Assistant.   

  • In an article published by IBM[3], Luq Niazi, IBM Consulting Global is described by IBM as a "next-generation enterprise studio for AI builders to train, validate, tune and deploy AI capabilities through an open and intuitive user interface.  
  • is a data repository designed to manage enterprise data.  
  • Watsonx.governance is a set of tools to manage enterprise-wide governance and to control risk.  


Watsonx Data. Image source: IBM video contained in IBM Article 

As we learn from the video, IBM sees customer care, cybersecurity, supply chain and fulfilment as key areas that Watsonx and its components can enhance. Luq Niazi describes an instance where it made a 250% increase in forecast accuracy for an IBM client.  

EBAY’s Magical Listing Tool 

As described by eBay[4], the company’s goal is to make it easy for online store owners to create more detailed, accurate and in-depth listings. With the latest iteration of its “Magical” Listing tool, eBay takes the old adage of “a picture is worth a thousand words” to a new level.  

The system now allows users to upload a picture and then sit back and watch AI fill in the details. The AI can create titles, descriptions, categories and sub-categories, prices and shipping costs. This feature will be of particular interest to newbie sellers, who may otherwise be overwhelmed with the multiple tasks required and end up being stymied by what EBAY described as the “cold start” issue, a merchant’s version of the all-to-familiar writer’s block.  

The result is that the online store’s potential customers are offered more detailed, more accurate and more in-depth listings, multiplying the chances for a sale. And because the store’s proprietors or agents have spent virtually no time creating the listing, profitability soars.  

The article cites an unusual and unexpected sales item – baseball trading cards. Working from just a picture, the first job for the AI is to identify the card and the player it represents. Factors such as the card’s manufacturer and the printing date, as well as the player’s league and team, are also divulged. The AI also ascertains the card’s physical condition. There is also a background removal tool because sellers report that compelling, clean images are crucial for sales, and this tool can make a huge contribution towards closing a sale.  

AI: Crafting a Personal Touch in E-commerce

But wait, there's more to AI in e-commerce than just automating tasks. Picture this: AI, as IBM's blog illustrates, is now playing a key role in personalizing customer experiences. Imagine an AI that knows your customers almost as well as you do, tailoring interactions based on their feedback and purchase history. This isn't just about making sales; it's about building relationships, turning one-time buyers into loyal customers.

And let's not forget the backend magic. AI's prowess in sifting through mountains of data is transforming how retailers manage their inventory. It's like having a crystal ball that predicts what your customers will want next, ensuring you're always stocked up on the right products at the right time. This kind of operational wizardry used to be the stuff of dreams for small and medium-sized online shops, but now, it's very much their reality.

In essence, AI in e-commerce is evolving from a behind-the-scenes efficiency booster to a front-line customer charmer. It's not just about streamlining processes anymore; it's about creating shopping experiences that feel personal, intuitive, and downright satisfying for both the customer and the retailer.


Shopify is a commerce platform that lets anyone start, grow, manage, and scale a business. It, too, has an AI-based tool aimed at streamlining the lives of online shopkeepers by making “shop upkeep” simpler and more efficient. Magic seems to be in the air for AI-enhanced E-commerce platforms because Shopify’s offering also takes its name from the mystical realm and has been dubbed Shopify Magic.  

From a video[5] presented by Miqdad Jaffer, director of product for Shopify, we learn that Shopify Magic is aimed at aiding E-commerce storekeepers in tasks encompassing:  

  • Store building 
  • Marketing 
  • Customer Support 
  • Back office management  

As an example, email campaigns can be generated from just a few keywords. The results include subject lines and content as well as recommendations for send times aimed at achieving greater click-through rates. 

Shopify’s Miqdad Jaffer takes us through the process of creating an email campaign. Image source:  Shopify video (0.54)  

Also part of the mix is Sidekick, an AI-enabled “commerce expert”. One of the things that Sidekick can do if the shop owner wants to add a new product to the store’s offerings is to literally conjure it up. Jaffer cites an example where he inputs the type of product he wants and asks for a product name, a “fun” description, and a price. Solid results come back, and all the shopkeeper has to do now is to source it.   

Challenges and Opportunities 

Previously, discussions about automation centered on places like the factory floor or large-scale agriculture {link to my as yet unpublished agricultural AI article}. The jobs eliminated were either dangerous, repetitive or that kind of mind-killing drudgery that reduced a human being to a mindless tool.   

Not so this time. Writing product releases isn’t dangerous, and it’s kinda fun.   

ChatBOTs like ChatGPT can produce great output with minimal clues. You can even submit attempts at fiction to ChatBGPT, and the criticism you’ll get will remind you of your freshman English teacher. A similar thing happened with math a generation ago. Thanks to digital simulators, it’s now possible for undergraduates to work with and solve differential equations that would have previously challenged NASA.  

Regardless of what anyone says, nothing will stop AI, just like nothing could stop H-Bombs or the printing press.  

But even if ChatBOTs can write great press releases, people should still be able to write great press releases. Students should still learn how to solve differential equations. That’s the challenge because if, as a society, we don’t, then we truly become slaves of the machine.  

Wrapping Up 

E-commerce AI makes it possible for the smallest online store operator to “hire” the equivalent of a marketing agency. Great or tiny, these online proprietors are all digitally savvy, so getting on board will be easy.   

The new platforms can write product descriptions, respond to customers' inquiries, calculate inventory requirements, combat fraud and take care of many boring backend tasks. Platforms that are suited to the smallest part-time entrepreneur or to the mightiest corporation are available.  

Best of all, they possess memories and learn from experience in a manner eerily similar to that of living beings. So, the more you use it, the smarter it becomes. It will continue to achieve better and better results with fewer prompts from the online shopkeeper.  

Key Takeaways 

  • The now famous ChatGPT is a ChatBot. 
  • Specialized E-commerce ChatBots form the core of today's E-commerce Platforms.  
  • E-commerce Platforms can do many of the labor-intensive, time-consuming, mundane tasks that are anathema to the entrepreneurial mind, freeing online business people for the more creative tasks that they excel in.  
  • Users of these platforms will see their revenues and profitability soar.  


  1. On Amazon, eBay, and Shopify, AI is the new third-party seller:  
  2. America Forgot About IBM Watson. Is ChatGPT Next?: 
  3. IBM generative AI is ready for retail: 
  4. ‘Magical’ Listing Tool Harnesses the Power of AI to Make Selling on eBay Faster, Easier, and More Accurate: 
  5.  Introducing Shopify Magic: 


  • ChatBot: AI programs that mimic human-to-human conversation, often eliminating the need for frontline human agents. 
  • Forking: When software developers make a copy of an original program and modify it for a new purpose while generally leaving the original program unmodified.  
  • Generative AI: Based on inputs presented to it, generative AI produces relevant answers. ChatGPT is an example of generative AI. 

By Gary Elinoff

Gary Elinoff graduated from SUNY Stony Brook with a bachelor’s degree in physics and he also holds a master’s degree in electrical engineering from San Jose State University. Along the way, he was also awarded an MBA with a concentration in finance from Boston University. Now a professional science and engineering writer, he has worked in test engineering and as writer/editor for the electronic trade press.