Practical Ecommerce: How does artificial intelligence work, and how does it impact e-commerce?

Gagan Mehra: Artificial intelligence works like a human by making suggestions or answering questions based on data. This can be understood by comparing it to a proprietor at a neighborhood market. As she learns more about the customers, the owner’s recommendations become more accurate.

Artificial intelligence does the same thing. It gathers data to become smarter about an individual or group in a specific scenario. Say, for example, a 25-year-old male is purchasing beer. Artificial intelligence could recommend snacks based on data from similar customers. As it learns more about the shopper — e.g., a vegan who prefers Budweiser — the recommendations can become more accurate, like the neighborhood market owner.

Artificial intelligence has changed e-commerce. Product recommendations, search results, chatbots, on-the-fly promotions, faster deliveries by forecasting inventory needs — all rely on artificial intelligence. Seemingly every function of e-commerce could benefit from AI, from what products to sell in which markets to when to restock inventory.