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7 Ways of Using Machine Learning (ML) in   E-commerce

7 Ways of Using Machine Learning (ML) in E-commerce

Feb 14, 2023 in E-Commerce Solutions by Dr. Süleyman Demirci

When we were children, there were science-fiction movies about Artificial Intelligence that made us think, "Wow, the future is going to be amazing!". Now that we live in the future, AI is no longer just a science-fiction concept. AI is integrated into our daily lives in various fields, from self-driving cars, facial recognition systems, and trading algorithms to demand to forecast.

What is Artificial Intelligence?

Artificial intelligence (AI) is the simulation of human intelligence in machines programmed to think and learn like humans. AI is used to create intelligent agents and systems that can perform tasks that typically require human intelligence, such as visual perception, speech recognition, decision-making, and language understanding. AI technologies can be classified as either weak or strong depending on their ability to perform tasks that typically require human intelligence.

What is Machine Learning?

What is Machine Learning (ML)? - Admirise

Machine Learning (ML) is a subset of artificial intelligence that involves the development of algorithms and statistical models that enable computers to learn from data and make predictions or decisions. ML is used in various industries to improve business operations, increase efficiency, and gain a competitive edge. E-commerce or retail is one of these industries.

Ways of Using Machine Learning in E-commerce

E-commerce can be described as buying and selling goods or services through the Internet. With the rise of technology and the widespread use of the internet, e-commerce has become a popular and convenient way for businesses and consumers to interact and make transactions, as well as to improve e-commerce operations and create new opportunities.

It has become an important tool in the e-commerce industry and is mostly about learning and getting insights from data and redesigning how companies sell or buy goods. By analyzing large amounts of data, machine learning algorithms can help e-commerce companies make better decisions, improve customer experiences, and increase revenue.

Let's look at how AI and associated technologies are moving the e-commerce industry forward, from improving customer interactions to streamlining business processes.

1. Personalized Recommendations

E-commerce allows businesses to collect and analyze customer behavior and preferences to improve marketing strategies and product offerings. ML engineers utilize this data to personalize and classify the customer experience. The algorithms can make personalized product recommendations to individual shoppers by analyzing customer browsing and purchase history. Retailers and e-commerce owners can increase sales and enhance customer loyalty.

2. Customer Segmentation

Customer segmentation is the process of dividing customers into groups of individuals similar in specific ways relevant to marketing, such as age, gender, interests, spending habits, etc. ML engineers can automate this process and identify patterns and characteristics that are not immediately obvious. Thus, customer segmentation helps e-commerce companies to create targeted marketing campaigns that are more likely to be successful.

One of the main segmentation methods is AI-based email marketing segmentation. Each customer behaves uniquely and expects different personal deals from online shops. When segmentation and personal recommendation algorithms work together, e-commerce agencies could reach more conversions and purchases with online-shop.

3. Improving Customer Experience

ML engineers also improve the customer experience on e-commerce websites through suitable algorithms. For example, Natural Language Processing (NLP) as an ML algorithm is a perfect choice to enhance the search functionality on e-commerce websites by providing more accurate and relevant results and understanding natural language queries.

Using a suitable corpus and robust NLP algorithms increases the capability and functionality of website search sections. The search results might fit what the online visitors search for and want. More importantly, they could reach the correct products they want online. The more intelligent and better search result capacity based on artificial intelligence, the online visitors would get the expected products quicker and better. m. AI-based search engines in e-commerce platforms allow customers to increase their length of stay around the platform.

4. Chatbots

ML developers can also create chatbots to assist customers with their queries and provide personalized recommendations. Today most online shops offer only predetermined answers and questions to their visitors. However, this would sometimes annoy customers and visitors because they need to describe their needs correctly or ask the right questions in the chatbots. Beyond this, AI-based chatbots in e-commerce would be able to get any direct questions and follow-up questions so that they can respond better and fine-tuned answers to their customers.

Chatbots, AI in E-commerce - Admirise

5. Virtual Try-On Features

ML developers can use computer vision algorithms to create virtual try-on features, allowing customers to see how a product would look on them before making a purchase. AI-based computer vision algorithms can automatically enhance upselling opportunities for each online customer. Analyzing and modeling the historical data of customers` past purchases and "add to cart" may help recommend similar items and products that might attract their interest.

6. Dynamic Pricing Strategy

Dynamic pricing strategy is the name of a new game in online business. All businesses know that purchasers always compare the same products across various e-commerce platforms before buying something online. ML enables them to tune the prices based on the minimum price of their competitors, operating and storing costs, supply, and demand. One cannot do these manually, and ML can easily automate vast amounts of data gathering, wrangling, processing, and offering better dynamic pricing in real-time. Such capability with ML algorithms helps online businesses articulate early trends and forecast demands for the products essential to list on the e-commerce platform.

7. Privacy Protection, Shopping Security, Preventing Fraud

E-commerce has many advantages as well as its own challenges. One of the biggest challenges is the risk of fraud and security breaches. E-commerce businesses must ensure that customer data and transactions are protected. Additionally, companies must also comply with various regulations related to privacy and data protection. Here, again, ML comes in handy. ML can help detect fraud and risk in e-commerce payments. By analyzing patterns in customer behavior, algorithms can identify and flag suspicious activity, helping e-commerce companies prevent fraud and protect their customers' sensitive information.


Utilizing Machine Learning (ML) in E-commerce management has become a pivotal strategy for businesses striving to enhance customer experiences, optimize operations, and ensure competitive success.

As the e-commerce landscape continues to evolve, leveraging the potential of Machine Learning (ML) has become a cornerstone of effective e-commerce management. ML's integration in the e-commerce sector is shaping everything from customer interactions to business processes, facilitating personalized recommendations, enhancing customer experiences, and even optimizing pricing strategies. By harnessing the power of ML, e-commerce businesses can not only streamline their operations but also create more meaningful customer interactions and drive growth in this competitive digital marketplace.