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Can Your E-Commerce Survive Without AI? The Time to Act Is Now!

Writer's picture: Jaykishan vansadawalaJaykishan vansadawala

Updated: Oct 18, 2024

How long can your business thrive without personalized customer experiences

powered by AI?


Are your competitors already using AI to capture your market share?


Can you afford to ignore the efficiencies and revenue potential that AI brings to

e-commerce operations?


Have you ever wondered what the future of e-commerce would look like without AI or are we already in the middle of a revolution that could redefine how customers shop forever?


From automated chatbots to personalized product recommendations, AI has quietly but profoundly infused itself into the world of online commerce. But here’s the question: will AI’s role in e-commerce continue to grow and become indispensable, or are we overestimating its impact? According to Gartner, AI is already driving 30% of revenue in e-commerce – but is that just the beginning, or is there more to this?


In this article, we'll dive deeper into the business value of AI for the E-commerce sector.


How Big Will AI in E-Commerce Be by 2033? Here’s What the Stats Say

According to insights, the total value of AI in the E-commerce market size surpassed $6.63 Billion1. Let’s now peek into the numbers on the projected growth of the market size for AI in E-commerce.

  • By the end of 2024, the expected market size is approximately $7.62 billion.[2]

  • According to Sellers Commerce, by 2025 the estimated market size is $8.65 billion.[3]

  • By 2026, the market size is expected to reach the value of $9.9 billion. [3]

  • The market size for the same is projected to set a bar of $11.33 billion by 2027.[3]

  • By 2028, the market size is expected to reach approximately $13.billion. [3]

  • According to Sellers Commerce, by 2029 the market’s estimated size will reach $14.9 billion. [3]

  • By 2030, the market size is projected to reach a whopping $17.1 billion mark. [3]

  • The global market size of AI in e-commerce is expected to be $20.87 billion by 2031.[4]

  • By 2032, the size is estimated to be $22.60 Billion according to the precedence research report.[5]

  • By 2033, the global market size of AI e-commerce will reach $50.98 billion. [6]



How Do Businesses See AI Shaping E-Commerce?

According to a survey by Sellers Commerce, there are so many ways AI has influenced e-commerce businesses, and here’s how:


Ways

% Effect

Enhance Overall Performance

51%

Better Decision Making

35%

Product Innovation

32%

Optimization of Operations

36%

Automation of Tasks

36%

Application of Data into the Right Place

25%

Optimize External Processes (E.g. Marketing and Sales)

30%


What applications are crucial in revenue generation for e-commerce industry?

According to a recent article by Algolia, since the pandemic 85,000 new online retailers have joined e-commerce. More than 50% of the professional retailers selling via e-commerce have said that Effective AI search has been a great revenue generator for them. Online shopping in the US has increased by 55% reaching a size of $1.7 Trillion.[8]


There are many ways AI has been a revenue generator for the world of E-commerce:

  • Personalized shopping: The industry recorded that 30% of the revenue was made by implementing personalized shopping experiences for the customers.[11]

  • Price Optimization: Businesses have said that they have been experiencing 3-5% higher revenue generation due to price optimization of their business. [9]

  • Recommendation Model: According to Rejoiner, the recommendation engine generates up to 35% of the total sales of Amazon.[10]

  • Product Keyword Optimization: According to Weblink, the technology of NLP (Natural Language processing granted 21% more sales to the total for E-commerce businesses, with chatbots being available 24/7.[12]

  • Automated segmented campaigns: A whopping 760% increase in revenue caused by Automated-segmented campaigns was reported by Luigisbox.[13]

  • Virtual Try-On: AI-driven virtual try-on technology has boosted purchase rates by 20%, reducing returns and increasing sales in fashion e-commerce.[14]

  • AI-Powered Inventory Management: Machine learning enhances demand forecasting resulting in a 10-12% revenue increase for e-commerce companies.[14]

  • Generative AI for Content Creation: AI-generated product descriptions and marketing materials have improved performance by 58%, increasing brand visibility and conversion rates, and ultimately boosting revenue.[14]




Which Regions Are Leading AI Integration in E-Commerce?

Regional analysis Highlights in the upcoming report on AI in e-commerce by SkyQuest, here is an overview: Region 1: North America, Region 2: Europe, Region 3: Asia-pacific (APAC), Region 4: Latin America (LATAM), Region 5: Middle East & Africa (MEA)



Source: SkyQuest


 

What’s next for AI in E-commerce?

The future of AI in e-commerce is full of un-thinkable experiences, which could possibly include AI-driven visual search, voice-activated shopping, predictive analytics for inventory management, augmented reality (AR) for virtual try-ons, hyper-personalization, voice commerce, AI-driven automation, dynamic pricing models, automated supply chain optimization, enhanced fraud detection systems, AI-driven content generation for marketing, and real-time customer insights.


AI is already making a huge impact on e-commerce, and its influence is only set to grow. From improving customer experiences to streamlining operations, AI is shaping a smarter and more personalized future for online businesses. As these technologies evolve, staying adaptable and embracing AI will be key for companies looking to thrive in the competitive e-commerce landscape.


So, get ready to fuel your e-commerce growth with AI!




References:

  1. https://www.precedenceresearch.com/press-release/artificial-intelligence-in-e-commerce-market#:~:text=The%20global%20artificial%20intelligence%20in,14.60%25%20from%202023%20to%202032.

  2. https://www.verifiedmarketresearch.com/product/artificial-intelligence-in-e-commerce-market/

  3. https://www.sellerscommerce.com/blog/ai-in-ecommerce-statistics/

  4. https://www.verifiedmarketresearch.com/product/artificial-intelligence-in-e-commerce-market/

  5. https://www.precedenceresearch.com/press-release/artificial-intelligence-in-e-commerce-market

  6. www.market.us

  7. https://www.coherentmarketinsights.com/industry-reports/artificial-intelligence-in-e-commerce-market#:~:text=Artificial%20Intelligence%20in%20E%20Commerce%20Market%20Size%20and%20Trends,25.3%25%20from%202024%20to%202031.

  8. https://www.algolia.com/blog/ecommerce/10-ways-ai-is-transforming-ecommerce/

  9. https://apiumhub.com/tech-blog-barcelona/artificial-intelligence-ecommerce/#:~:text=It%20helps%20drive%20the%20algorithms,35%20percent%20of%20total%20sales.

  10. https://www.rejoiner.com/resources/amazon-recommendations-secret-selling-online

  11. https://zipdo.co/ai-in-e-commerce-statistics/

  12. https://www.aaarl.ca/post/ways-to-increase-revenue-with-ai-in-ecommerce

  13. https://www.luigisbox.com/blog/ecommerce-ai/

  14. https://www.algolia.com/blog/ai/generative-ais-impact-on-the-ecommerce-industry/

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