Watch out, AI and GenAI are transforming e-commerce from the ground up

A personalized chatbot based on a Large Language Model (LLM) can be your friend and shopping guide.
A personalized chatbot based on a Large Language Model (LLM) can be your friend and shopping guide.


  • AI will impact our lives broadly but also revolutionize e-com at the back-end, even as it gives us a whole new online shopping experience. It’ll personalize offerings, guide shoppers, smash language barriers, expand reach, raise efficiency and more.

I have often written of the ethical and philosophical impact of AI and how it will shape our future. Now I focus on how AI has reshaped a category which touches our daily lives: e-commerce. AI researcher and entrepreneur Andrew Ng termed AI the “new electricity." Like a general purpose technology, it will power society and multiple businesses silently and behind the scenes. AI can run logistics, factories, social networks, search, smartphones and much else. Its potential in e-commerce is vast.

As e-com entered our lives with the launch of Amazon by Jeff Bezos in 1994, AI became a natural fit to make it more efficient. From recommendations, logistics and warehousing to stock merchandizing and other operations, AI has been in use for many years. Amazon, for example, is now using AI and Machine Learning (ML) to monitor the quality of fresh produce like fruits and vegetables. 

Add to it regional-language customer support and better search algorithms for purchase cues. All this makes shopping convenient for online shoppers. With Generative AI and recent advances in Deep Learning and ML, the e-com industry is at the cusp of a major transformation. These innovations will not just augment but reshape the sector from the ground up. Let us explore how:

Personalization at scale: Hyper-personalization has been the holy grail for retailers. Who has not gotten overwhelmed by the huge variety of products offered by large stores and market places? There are a million dresses to choose from even if we want only one. What if the retailer knew your exact preferences, sizes and needs and threw up personalized options like a human stylist would? 

The technology exists for this, with AI algorithms predicting consumer behaviour with remarkable accuracy and tailoring recommendations and content to suit individuals. With GenAI, marketing messages can be crafted for unique individual appeal.

A whole new customer experience: GenAI can transform your experience while shopping digitally. A personalized chatbot based on a Large Language Model (LLM) can be your friend and shopping guide. Say, you are excited about your first trip to Ladakh, but apprehensive of the cold there. You turn to an Amazon or Decathlon to buy warm clothes. You could tell a bot about your plan and it will check the weather forecast on those dates and help you get the gear needed for your Ladakh trip. It could even offer travel options and health tips. 

If you wish to continue shopping on your way there, you need not worry about a spotty telecom network, as many AI-based prediction models can smoothen the online experience. AI can also give AI-generated reviews to help you make choices. One could also automate and personalize content creation for product listings and marketing material. All of this translates to lower costs and therefore also more attractive retail prices.

Operational efficiency and automation: AI does a lot behind the scenes to enable a new experience. It is revolutionizing back-end operations in e-commerce, ranging from inventory management and product shipment to process revisions that reduce errors and drive down costs. Autonomous robots don’t just reduce human error, they do heavy and complex tasks that are difficult or dangerous. Predictive analytics can forecast demand accurately, so that stock levels are set to minimize waste. AI algorithms can optimize delivery routes in real-time, enhancing efficiency and customer satisfaction.

AI can break language barriers and expand markets: An exciting possibility with GenAI is its ability to transcend barriers of language and literacy and reach everyone. India has more than 20 official languages and hundreds of dialects, but most e-com is conducted in English, leaving millions of people excluded. GenAI can do real-time translation and use voice and video enablers to help people communicate and transact. This means a wider reach and new markets for digital market-places. It’s clear that AI and GenAI are well placed to dismantle barriers in e-commerce, making it more inclusive and accessible.

These are some ways in which AI will transform e-commerce and realize the sector’s dream of providing the best products at the most attractive prices in the fastest way possible to every human being. With AI, we can look forward to a completely re-imagined customer experience, truly personalized to our preferences and budgets. The future of e-com underpinned by AI and GenAI is not just about technological advancement, it is about reshaping the global marketplace in ways we are only beginning to imagine.

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