AI Remains Transformative Within the Ecommerce Space in 2024

Few things have disrupted the ecommerce industry of late quite as thoroughly as AI. The experts agree, predicting that global AI in the retail market will surpass $24 billion by 2028, growing at 24.4% CAGR YOY.

Yet many retailers haven’t begun leveraging AI to its fullest potential. They recognize GenAI’s contribution to their future success and see it as crucial to plans. About two-thirds of companies plan to invest more in AI in the next six months, and 60% of commerce leaders recognize the value of AI in boosting customer experience to provide a competitive advantage. Determining how and where to implement this technology to drive ROI remains a significant challenge.

AIs Current Impact on Retail

In many ways, AI enables ecommerce companies to understand customers more deeply, engage them intelligently, fulfill demand efficiently and modernize the shopping experience.

AI algorithms can analyze customer data and behavior to provide highly customized and tailored recommendations, content and experiences to each shopper to drive higher engagement and conversion. AI tools help forecast demand, analyze market and sales trends, optimize pricing and manage inventory more effectively to increase revenue and lower costs.

Robust AI-driven search and discovery capabilities help shoppers find products more easily and accurately. Tools like visual search enable consumers to use images for searching. Many ecommerce companies have deployed conversational commerce and AI-powered virtual assistants for 24/7 customer support, boosting customer satisfaction without incurring higher costs.

In 2024, AI will continue making retail and commerce more customer-centric through conversational commerce tools.

The Future of AI Implementation

AI adoption depends heavily on having business leaders who not only believe in the value of AI but also have defined a specific business need for it. Simply deploying AI because it’s popular isn’t a recipe for success. Businesses need a defined use case, success metrics, internal ownership and commitment from leaders who see its potential benefits.

While this leadership and strategic vision is crucial for major AI initiatives, smaller, practical applications can also deliver value. It’s tempting to view AI as an intimidating, disruptive force demanding bold, sweeping initiatives. However, its power also lies in more modest applications delivering tangible gains. In the coming year, we’ll see smaller to mid-sized commerce teams implementing AI. Even businesses with limited resources can take advantage of AI to advance their ecommerce operations, marketing efforts and customer engagement via intelligent automation. With the right focused approach, AI adoption can start small but still make an impact.

Whole business teams will lean into AI, using conversational tools to handle customer queries, recommend products, streamline purchases and provide personalized support at scale.

Ecommerce teams have already begun leveraging GenAI for content writing, and there are other entry points for those testing the technology. Organic search and robust SEO remain vital for driving site traffic — and AI also can sharpen keyword strategies to boost performance and productivity quickly.

Interlinking Personalization with AI

We know that AI is only as good as the data it’s fed. Since data is the core of AI, the quality and representativeness of the data used to train it are crucial in determining the quality of its performance and output. Irrelevant, redundant or correlated data reduces models’ abilities to uncover meaningful patterns. Data selection, cleaning and preprocessing are crucial.

But when it’s trained on the right data, AI shines. It’s the ideal tool for helping marketers to ensure a more personalized customer experience. Ecommerce will continue to leverage AI to power personalized recommendations and spark a more conversational experience. Predictive models can study each customer’s unique browsing habits and purchase history to curate a tailored shopping experience in real time.

In 2024, expect more companies to task AI with the heavy lifting to sift through and analyze monumental sums of data. Marketing teams will continue to review the insights about customer shopping behaviors and motivations, using that information to create and deliver more customer-centric experiences.

Beyond suggestions, AI-driven hyper-personalization will allow retailers to customize advertising, content, customer service interactions, messaging and pricing to align with individual consumer preferences. By continuously training and evolving models to map changing consumer behaviors, the possibilities for engagement are limitless.

The end result? An intelligent, adaptive level of personalization that will convert shoppers at scale.

As AI recommendation technology advances, it promises to revolutionize ecommerce by empowering brands to interact with consumers as individuals — not segments.


Raj De Datta serves as Co-founder and CEO of Bloomreach. Before launching the Company in 2009, he was Entrepreneur-in-Residence at Mohr-Davidow Ventures, served as Cisco’s Director of Product Marketing and was on the founding team of telecom company FirstMark Communications. He also worked in technology investment banking at Lazard Freres. De Datta serves on the Council for Player Development for the U.S. Tennis Association, as a Founder Partner at seed-stage venture capital firm Founder Collective and an individual investor in over 20 Silicon Valley startups. He holds a BS in Electrical Engineering with a certificate in Public Policy and International affairs from Princeton University and an MBA with distinction from Harvard Business School.