Artificial Intelligence in the World of eCommerce
From chatbots like ChatGPT to image generators like Midjourney, Artificial Intelligence (AI) is rapidly transforming industries and reshaping how businesses operate and engage with consumers.
This is especially true in the world of eCommerce. While we’ve only uncovered the tip of the iceberg in terms of AI’s capabilities and we anticipate even greater innovations down the road, it is already offering brands powerful tools to optimize operations and improve the shopping experience. In this blog, we’ll explore why AI adoption is essential for eCommerce, highlight key AI categories making waves in the industry, and discuss exciting AI tools from Amazon that we’re actively monitoring to evaluate their impact on brand strategies. Let’s dive in!
Why AI Adoption in eCommerce Matters
There are three distinct reasons why leveraging AI is critical for brands’ eCommerce strategies:
1) AI offers efficiency and consumer connection opportunities brands have never had before.
Many AI solutions…
Enhance customer interactions through personalization.
Deliver personalized product recommendations to shoppers.
Streamline operations.
2) Businesses that embrace AI stay in step with competitors.
84% of eCommerce businesses now consider AI a top priority, indicating how brands will fall behind their competition if they don’t utilize these tools.
3) AI capabilities help brands unlock valuable growth opportunities.
Companies that adopt AI see at least 20% additional revenue growth and an 8% reduction in costs, showcasing the profitable opportunity that AI represents.
Unsure where to begin with AI to experience these gains? You're not alone—74% of companies are struggling to scale the value of AI adoption. Let our GO team help you get started.
Kathryn Armson, Global Overview’s Director of Digital Advertising and Product Management Performance, summarizes the necessity of adopting AI within eCommerce:
“AI adoption in eCommerce is no longer optional—it’s a competitive necessity. AI is reshaping how brands engage with shoppers by allowing for precision targeting and personalization, driving enhanced performance, and scaling ad operations without sacrificing strategic oversight. AI can be used for many purposes, from creative optimization to performance forecasting, and adopting this technology will help future-proof your eCommerce business.”
Key AI Categories Within eCommerce
With AI unearthing a large range of business possibilities for brands, it can be challenging to determine which innovations will have the most significant impact now and down the line. To simplify this search, AWS has identified three key AI categories that are already shaping eCommerce and will likely drive even greater transformation in the future:
1) Personalization
AI-driven personalization reviews vast amounts of consumer data, including individual preferences, behaviors, and intent, to elevate marketing strategies and deliver more relevant product recommendations. With 71% of consumers expecting personalized experiences, companies that prioritize personalization can achieve substantial growth:
Businesses investing in personalization see 40% more revenue.
According to a McKinsey study, AI-driven personalization delivers:
10-30% cost savings in marketing efficiency.
3-5% increase in customer acquisition.
5-10% boost in satisfaction and engagement.
GO has been leveraging this AI type to drive client success on Amazon. For example, we helped a brand in a competitive category utilize Amazon Marketing Cloud’s Flexible Shopping Insights dataset to uncover unique shopper behaviors that informed AI-driven personalization for their Sponsored Brand campaign. As a result, their Sponsored Brand CTR increased by 36% quarter over quarter.
2) Demand Forecasting
AI can analyze historical sales data, market trends, and external factors to predict demand with greater accuracy. This enables brands to reduce stockouts, minimize excess inventory, and improve supply chain efficiency.
AI-driven demand forecasting is rapidly gaining traction in the eCommerce sector, with 20% of executives currently using AI and/or machine learning for demand planning and 60% planning to adopt it in the near future.
Our team has begun leveraging AI-driven demand forecasting to help clients navigate seasonal demand in volatile categories. For one client, we implemented this approach and achieved a forecast accuracy within 3% of predicted units.
3) Social Media Monitoring & Sentiment Analysis
Natural Language Processing (NLP) allows AI to analyze customer feedback and social media conversations, helping businesses track trends and address shopper concerns in real-time. Brands can continuously leverage this data to enhance product offerings, refine their content, optimize organizational processes, and so much more.
The global sentiment analysis market is projected to reach $10.9 billion by 2027, growing at a 13.8% compound annual growth rate from 2022. This demonstrates how brands are increasingly focused on understanding and improving consumer perceptions, and leveraging AI can help them streamline this endeavor.
GO has been leveraging AI sentiment analysis to help clients measure positive sentiment rates and track trends over time. This approach enabled us to analyze over 20,000 Amazon reviews in a single quarter.
These categories are just the beginning of AI’s vast potential. Staying informed and consistently exploring emerging AI tools will be vital for businesses aiming to maximize their eCommerce success both now and in the future.
Additionally, as you continue to integrate AI into your business strategy, it’s important to remember that these tools should not run without human oversight. Ongoing monitoring of AI’s implementations is essential to ensure they align with your brand’s overall goals and strategies.
Amazon AI We’re Excited About: Cosmo & Rufus
One of the most exciting AI developments in eCommerce comes from Amazon, with the introduction of Cosmo and Rufus. These AI tools are designed to enhance product discovery and fall within the AI Personalization category that we outlined above.
Cosmo is like the engine operating in the background, delivering personalized search results thanks to backend data like:
User behavior
Semantics
Search query intent (e.g., “running shoes” and “athletic shoes” may or may not have the same meaning depending on who is shopping)
Contextual factors like location and current trends
Rufus serves as a user-facing shopping assistant, allowing consumers to interact directly, ask questions, and receive personalized product suggestions. Rufus’ key analytical capabilities include:
Semantic Similarity Models – evaluates relationships between words and concepts to deliver solutions based on customer intent.
Example: If a shopper searches for “dress for winter wedding,” they might also be presented with other suitable options, like seasonally and occasion-appropriate jumpsuits.
Click Training Data – generates product recommendations based on purchase history and preferences. It also identifies the true attributes of each product as well as its relevance to the consumer.
Visual Label Tagging – analyzes imagery to discern a product's purpose, features, and benefits.
Both tools support a consumer-centric approach that includes two critical elements:
Cosmo and Rufus tailor their results to each individual, prioritizing shopper behavior, intent, and browsing/purchase history to determine which products to display.
There’s potential for search to evolve toward conversational queries, where shoppers type questions in search bars rather than keywords. Cosmo and Rufus are designed to align with and support that evolution.
While the long-term impact of Cosmo and Rufus is still being determined, brands may need to consider several adjustments to their Amazon approach to align with these new tools:
Keyword strategy updates to complement conversational queries.
Enhanced visual content to improve product discoverability via Visual Label Tagging.
More robust product review monitoring and improvement to increase the likelihood you show up in AI-generated recommendations.
Looking to adjust your strategy to fit within Cosmo and Rufus’ capabilities? Our GO team can support (contact us!) – hear from Kathryn Armson as she sums up the significance of Cosmo and Rufus and how GO is supporting our partners in adapting to these new AI innovations:
“Cosmo and Rufus are poised to revolutionize how customers search by enabling conversational and generative search capabilities. This provides shoppers with immediate answers to product-related questions, AI-personalized recommendations, and real-time assistance, reducing friction in the buying process. New opportunities for sponsored placements in AI-driven recommendations will require advertisers to rethink their ad strategy and optimize their content for conversational queries. At Global Overview, we are actively partnering with Amazon to explore how brands can prepare for and capitalize on these AI-driven advancements in Amazon Ads.”
Are you ready to incorporate AI into your eCommerce strategy?
AI is revolutionizing eCommerce, creating new opportunities for brands to enhance efficiency, personalize customer experiences, and drive growth. Those that embrace AI will thrive, while those that resist risk falling behind in an increasingly competitive landscape.
Want to further explore AI’s impact on eCommerce with our team? Contact us today!