How AI and IoT in eCommerce are changing the way we shop online

February 21, 2022

How AI and IoT in eCommerce are changing the way we shop online

The year 2020 represented the eCommerce boom due to the pandemic. But it was last year that the industry dealt with significant challenges. This included shipping delays across the globe and data privacy changes. Both the changes have affected retailers’ social media marketing efforts.

Yet, despite that, online shopping has remained steady. Statista reports that global retail eCommerce sales are expected to be worth $7.4 trillion by 2025.

We are fast approaching the third roller coaster year defined by the Coronavirus outbreak. But what new online shopping trends will define the retail industry? Let us find out:

Internet of Things (IoT) and Artificial Intelligence (AI) leading the way in 2022

Many technological advancements are revolutionizing the customer lifecycle, making it more adaptive. IoT, specifically, has enabled greater visibility over three core areas:

– The process of order fulfillment
– Automated management of inventory
– Curation of a more personalized customer experience

On the other hand, AI includes software algorithms imitating human intelligence. That helps businesses automate low-ROI repetitive tasks and boost their efficiency. Amazon has already been leveraging the technology to offer product recommendations to customers.

Similarly, chatbots have also become a hot favorite among eCommerce retailers. That is because they give their customers all the support they need to shop without speaking to a human rep.

IoT and AI offer many benefits to eCommerce retailers

These technologies are indeed helping them modernize the way they do business. Inventory management is more streamlined. IoT and AI have made shopping for customers unforgettable with innovative products and services.

If you also want a slice of this lucrative market, first let us check out the following advantages that IoT and AI bring to the table:

New shopping avenues with smart devices

Customers of today enjoy new accessibility to shopping beyond their laptops or phones. Retailers can deliver a better customer experience and help customers buy on the spot by:

    • Deploying helpful robots roaming the aisles
    • Monitoring inventory to POS systems

That means no more standing in the checkout line for customers, and that is awesome!

Higher up-sells and cross-sells

Let us take an example. You sold a printer with performance analytics features to customer A. Now, the built-in smart sensors in the equipment will determine the servicing needs. They will send messages about how often and how long customer A will use the printer.

So, when a cartridge runs out and needs to be replaced, the printer can signal the customer about it. Moreover, it can send a report to you to fix specific problems. This allows you to provide the customer with custom brand suggestions.

Ecommerce retailers tend to store all kinds of information related to an item starting from inventory, logistics data, payment data etc. Here is where time series database is used to gather and analyse such vast amounts of data to help retailers know exactly what to suggest to their customers to buy next based on their shopping behaviours.

Reduced logistical damage

IoT and AI improve the supply chain and minimize unnecessary costs through remote monitoring. For instance, you can track the conditions of the goods on the move. Besides, check whether their quality has been downgraded.

That is possible due to the sensors that scan valuable data about the temperature conditions inside the container. Besides, use GPS systems to optimize routes. Determine the course that the vehicles have taken with the IoT technology.

Efficient inventory management

IoT sensors, more specifically RFID tags, display vital information about any item , which is really important for efficient inventory management. This includes the expiry date, availability, and type. Retailers can always know when a perishable product needs to be stocked. They can watch out for the warehouse temperature to avoid spoilage.

Top 10 IoT and AI trends to watch out for in the eCommerce industry

Infographic by Intuz about top AI and IoT trends to watch out in the eCommerce industry

With the advent of the two technologies, customers can enjoy an increasingly innovative experience. This is through the network of connections linking the digital space and the physical world. Tap into a landscape of intelligent devices, including stores, software, and vehicles. Here are the top ten IoT and AI trends to watch out for in eCommerce:

1. Voice assistants

“Alexa!” “Hey, Siri!” “Cortana!” You might have called out at least one of these names, if not all, at some point in your life to search for a song, personality, and even a product. Thanks to these smart home devices, the disruptive way of shopping is just one command away.

2. Visual search

When you run a Google search, you might come across results on the first page that is irrelevant. AI utilizes NLP to contextualize and improve the search results as per your requirements to tackle the issue.

The technology uses visual search capabilities to come up with suggestions that match the product you are looking for. This saves your time sifting through many eCommerce sites.

3. Automation

Harnessing the power of AI helps you accurately advertise and market to your ideal customers. It helps implement smooth backend automation. Plus, you can drive efficiencies in your sales processes. Other examples of automation include:

    • Automated bookkeeping
    • Sending automated emails to customers for various reasons (cart abandonment)

4. Chatbots

The only reason e-retailers can offer 24/7 customer support is because of chatbots. They help customers with all possible queries. Chatbots enable them to decide on a product or service as soon as possible.

Brands such as Sephora, H&M, and Nivea have made their customer service processes efficient by utilizing NLP and machine learning. Moreover, 57% of consumers are interested in chatting with a bot because of their instant replies – no more relying on a human rep!

5. Personalization

Research shows that 74% of marketers agree that targeted messaging and email personalization drive higher customer engagement. AI-based personalization targets the individual want. It does not club them into broader categories.

Thread, a UK-based fashion e-retailer, uses AI to provide clothing recommendations. Whoever visits the site first has to give a quiz. They have to share fresh and relevant data on customer preference and style. Thread utilizes the insights to come back with custom suggestions.

6. Sales forecasting

Stock up your inventory to meet the customer’s needs with data on which product has the greatest potential to be sold. Or find out which products have been sold before like hot cupcakes. This would not be possible without smart sales dashboards that help forecast demand.

7. POS systems

A point-of-sale system is a collection of different hardware and software. It allows you to process customer-facing transactions when merged.

In eCommerce, a POS system can help track your products — whether sold or out for delivery. Besides, change product prices, manually enter prices, and minimize human error.

8. Smart searches

There is no surprise here! AI can make your storefront search engine more intelligent. AI-powered search engines track customer browsing patterns and conduct searches. This helps them find out what they are particularly looking for. Pull information from Big Data. Analyze the interaction a customer had with a specific search term on your storefront.

9. Customer retargeting

Remind your eCommerce site visitors of your products after they bounce off via retargeting. You can do so with the help of Facebook, Google Ads, and LinkedIn Ads.

Research shows that retargeting beats all other ad placement campaigns with a 1046% efficiency rate. Plus, the product’s appeal is the main reason 37% of customers click on a retargeted advertisement.

10. Enhanced cyber security

IoT applications in eCommerce enhance user data protection. They also help in supply chain operations and inventory management. The increase in connected devices and equipment brings with it a need to keep cybercriminals at bay.

It is vital to protect sensitive data about your business, vendors, and end customers. AI and deep learning-powered security solutions can protect your eCommerce ecosystem.

AI and IoT solutions enabling smart eCommerce systems

Customers expect a consistent and customized shopping experience in this digital day and age. They want their journey from product discovery to checkout to be as short as possible.

If you have read this far, you will agree that IoT and AI have made a considerable difference in how eCommerce businesses operate and deliver. In this section, we will learn about four systems that cultivated a culture of efficiency in the e-retail space.

1. IoT sensors for tracking product/order movement

These IoT devices help improve the connectivity of products available on the storefront and at warehouses. They do so by transmitting up-to-date product information in real-time. IoT technologies analyze the quantity, expiry date, product type, and so on. They keep the inventory streamlined and updated for eCommerce companies.

This results in the prevention of inventory overstock or shrinkage. It helps optimize parallel business operations and automatic scheduling for order fulfillment.

2. AI-powered data analytics tools

Enormous volumes of data are generated from IoT-connected devices. This includes smart security systems, fitness bands, and smart home appliances. It is crucial to deploy software in your eCommerce business.

You need a solution that can offer in-depth consumer insights and help augment the shopping experience like never before. For instance, send your customers personalized recommendations for winter jackets and windcheaters. You can do so by mapping data generated from their smart home appliances during the winter months.

3. IoT dashboards for predictive maintenance

IoT sensors collect different types of data, including:

    • Shipment tracking
    • Safety enforcement
    • Temperature scanning
    • Equipment health management

For instance, IoT-powered predictive systems analyze the industrial equipment performance in the warehouse. They enable timely maintenance and repair. This minimizes the risk of human error and also brings down unnecessary costs.

4. Voice shopping with smart home assistants

Do not be surprised when we tell you that 71% of customers prefer conducting queries by voice instead of typing. The technology can be integrated into smart speakers or smartphones. As an eCommerce brand, redirect your marketing efforts to cater to a voice search-loving audience. Understand consumer behavior better, and drive higher sales.


The success of eCommerce businesses in the 2020s is highly dependent on the technologies used. The number of online shoppers increases daily. It is integral for eCommerce retailers to continually introduce innovative solutions such as AI and IoT in eCommerce.

This will help them enjoy a competitive advantage and capture a larger target market. How do you plan to upgrade your online business with the two technologies? There is so much to explore in 2022. Are you ready?

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