Artificial Intelligence in E-commerce: Analysis and Insights

This report delves into the significant influence of Artificial Intelligence (AI) on the e-commerce sector, with a specific focus on Amazon Australia's operations and strategies. It explores the current operational models of Amazon, highlighting its customer-centric approach and the importance of continuous innovation. The report emphasizes the benefits of AI integration in e-commerce, including the use of chatbots for customer service, automated product descriptions, personalized product recommendations, and warehouse automation. Furthermore, it discusses AI's role in sales predictions, intelligent image searches, and the overall enhancement of the customer experience. The report also examines Amazon's Flywheel strategy, illustrating how AI contributes to efficient energy management and operational excellence. Through this analysis, the report provides valuable insights into how AI is reshaping the e-commerce landscape, improving efficiency, and driving higher sales and user engagement.

Running head: ARTIFICIAL INTELLIGENCE IN E-COMMERCE
Artificial Intelligence in E-commerce
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Table of Contents
Introduction:....................................................................................................................................2
Amazon Australia and Artificial intelligence:.................................................................................2
Amazon’s Present Operation:......................................................................................................2
Importance of Artificial Intelligence in E-commerce websites:..................................................5
Application of Artificial Intelligence in Amazon Australia:.......................................................7
Conclusion:......................................................................................................................................9
Recommendations:........................................................................................................................10
References:....................................................................................................................................12

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Introduction:
Amazon is one of the renowned E-commerce website which is used world-wide for the
purpose of selling and buying products. It was developed in the year 1994 by Jeffrey Bezos
(Bezos, 2015). In the year 1997 the stocks were opened to the world. Since then Amazon has
gone through a lots of changes not only in there services but also in their website. Till date, after
almost 25 years of its establishment, amazon is considered to be one of the top most preferred E-
commerce website by the people. Though there are many criticism faced by the company
regarding their services and delivery, still it manages to stand out in the crowd of hundreds of
such website available with the same business policies. Inserting the Artificial Intelligence is
beneficial for the company as well as its’ stake holders. The following report discusses about the
current operations of the Amazon Australia and influence of Artificial Intelligence in the
company. Artificial intelligence which used for creating intelligent system using computers can
be beneficial for the company thus the benefits are discussed in the reports as well (Kristensen,
Penner, Nguyen, Moy and Lam, 2017).
Amazon Australia and Artificial intelligence:
Amazon’s Present Operation:
According to The Amazon way: 14 leadership principles behind the world's most
disruptive company (Vol. 1) by Rossman, Amazon services focuses mainly on the customers.
The main requirements of the customers are kept on mind and the website is created in such a
way that it is sufficient for the customer (Rossman, 2016). The operation of the Amazon Services
in Australia depends upon some factors mainly. Those factors are discussed below:

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Lesser focus towards competitors and more customer obsession: The prime focus of Amazon
Company is to look towards the customers and work accordingly. In such cases customers’
requirements are kept in consideration. Though there are many companies emerging having same
business criteria and are of similar domain, the company is inclined towards the Customers’
demands and their satisfaction. The main strategy of the Amazon Company is to gain and retain
trust of the customer. It has been mentioned in one of the article that the employees and the
developers gets their energy from the obsession towards the customers (Davies, 2019.).
A passion towards inventing: Amazon Company, since its establishment, has changed a lot.
They have been evolving continuously. They like to invent for their customers. The company
takes inventorial failure as one of the feedback from the customer and work on it continuously so
that they can produce something better and more efficient. They collect idea from everywhere
around. The new things may not always be correct in the first attempt, but they do not accept
failure. Instead they move on and come up with more ideas to evolve.
Excellent operation: The key to any E-commerce website is its’ services to the customer. If the
customers are happy with the performance and the website services and security then the job is
half done for the company. The customers stay glued to the website for hours and that is due to
smooth performances. The infrastructural betterment of the digital media and the Information
technologies have hiked the usage of Amazon Services. The more efficient the operations of the
website are the better is the service to the stakeholders. This stake holder not only includes the
customers, but also the employees, suppliers, partners, communities and the vendors.
Focused on long term thinking: Since the inception, every single department of the Amazon
Service is all focused around the long-term thinking process. As mentioned earlier, Amazon is all
about customers’ satisfactions and customers’ relevance. In that case retaining the customers are

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their priority (Weber, 2017). The feedback from the customers helps in the development of the
website. A huge amount of time is spent on the studying of the customer reviews and feedback
and acting according to that so that the improvement is continuous and the customers keep
coming back.
There are certain leadership principles followed by the Amazon Company. The main
principle is to work hard for achieving the goal like the employees back at Amazon do every day
to reach out to the customer with their performance and development skills.
Better leaderships for better results: The leaders are obsessed with the customers as well,
customers’ requirements are everything. For whom they invent and simplify the whole process.
Innovation is always a complex procedure hence the innovation does not limit a customer from
using the application or the website. Moreover, the customers use them frequently as they are
simplified and the instructions are clearly given out in the website for the correct usage of the
application. These are the abilities of the leaders in the Company, who have to take lots of
decisions over time for the improvement of the performance. The best developers are hired by
them in order to perform best. These leader creates more leader who takes important decisions
and the cycle keeps on going.
Certain standards are set up by the leaders which is why Amazon services are considered
as one of the best services in E-commerce industry. The higher standards set up by the leaders
helps in maintaining the quality, process and high quality services. Calculated risks are often
considered while making decisions for progress. Thinking bigger and better is the key to better
results for which the leaders are given credits. Right amount of input and desirable amount of
output is the primary focus of the leaders and this is how the Amazon Company works at present.

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They have bigger goals to achieve every day, they plan for innovation every day, and they
commit to give a better experience to the stakeholders every day.
Importance of Artificial Intelligence in E-commerce websites:
From International Business in the Information and Digital Age (pp. 327-356) it can be
understood that implementation of the E-commerce itself has hiked up the business industry
exponentially (Wu and Gereffi, 2018). With the implementation of the Artificial Intelligence in
E-commerce will enhance the process further more. The benefits of implementing AI in the E-
commerce is discussed in this section.
Chat bots: The chat bots are the designed in such a way that they can answer any relevant
question regarding a particular field. This is available everywhere now, starting from the college
websites to the hospital website to pizza delivery. These bots have a set of answer prepared for
the commonly asked questions, all they do is look for the key words in them and answered
accordingly. This not only reduces the repetitive task of the employees also reduces hassle of
tackling common questions of the customer.
Description of the products automatically: The contents regarding the product is automatically
created with the help of the Artificial intelligence. For an E-commerce website proper
description of the product is the key to attract customers, if this is done with accuracy with the
help of AI then nothing can be better. Previously the descriptions have to be written by the
employees where they look for every gory details and write them. This problem is solved by the
implementation of the AI in the E-commerce websites (Heizer, Render and Munson, 2017). They

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can create numerous description in an hour without the involvement of any single employee.
Every detail of the product is described properly after the sorting is done. The product
description on the product body is analysed properly with the help of AI and the changes are
made wherever necessary. The buyer interest is also taken into consideration while description of
the product is written. This maximizes the sales revenue and the sales volume as it uses dynamic
pricing. All of this is performed by the AI devices just by checking upon the key words on the
product.
Recommendation of products: Based on the customer searches the suggestions and the product
recommendations are done. As said by the infamous Stephen Hawking the Artificial intelligence
will enslave the humanity one day seems to be coming true (Zeng, Lu and Huangfu, 2018). The
past searches and the surfing history are taken into consideration by the Smart devices using the
AI and recommendations are done accordingly.
Warehouse Automation: Previously the stock has to be updated, now the robots and the
intelligent system updates the stock automatically after the materials are received. This is
because they are active 24 hours and 7 days in a week (Li and Liu, 2016). The main benefit of
the machines over human is that there is no delay due to human needs. Hence, the process can be
enhanced and the production can be increased as well.
Store Run by the AI Robots: The AI Robot workers are present in the company who
communicate with the warehouse management software and performs the task of managing the
stores. As soon as the purchase is registered in the system the item is taken out from the stock
with the help of the robot (Kietzmann, Paschen, and Treen, 2018). They do the packing,
labelling, box the item and prepare them for shipping completely without any human
intervention. They deliver product with much more accuracy, they are faster, efficient and with

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proper maintenance they even last longer. The labour cost is reduced a lot after implementation
of these robots.
Generation of post-sale report: The report has to be prepared after the sales are done. These
post sale reports are also created with the help of these Robots. The handling of the complaints
and the refunds or the returns are also dealt by the AI robots. These robots also send the
customers relevant mails regarding the offers (Jackson, 2019). Imagining mailing each and every
customer after sorting out their requirements or the past purchases by a person is something
which cannot be brought into consciousness any more.
Prediction of the Sales: The Artificially intelligent smart devices are smart enough to predict
the sales on the basis of the rate of purchases of a particular category of product. The position of
the competitor in the market, and economic indications can be used in order to predict the sales
of a product (Song et al., 2019).
Intelligent image search: Now a days’ the image can be identified with the help of the AI
devices to predict the product.
There are many functions of the Artificially Intelligent applications, only a few has been
discussed in this section of the report. Thus AI has a lot of benefits over the traditional systems.
It has reduced the employee cost greatly and has enhanced the productivity and operations of the
E-commerce website exponentially (Robischon, 2017).
Application of Artificial Intelligence in Amazon Australia:
Artificial intelligence has influenced the system of many organisation and it can be said
the E-commerce website is the one benefited the most. Amazon Company is one of the largest E-
commerce website at present, hence the implementation of the AI has influenced it largely as

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well (Anh, 2019). The one hour delivery system has been transformed with the help of the one
hour delivery system. The Prime Now Services of the Amazon delivers the daily household
basics within hours of ordering. The Artificial intelligence is used such that the decisions for
performing the task can be taken as fast as possible.
Amazon’s Flywheel Strategy: The Artificial Intelligence strategy adopted by Amazon
Company is known as the Flywheel strategy. Flywheel is the rotational tool used by the company
for the purpose storing rotational energy efficiently. Machines consume a lot of energy in turning
the system on and off. The flywheel spreads the energy equally amongst the system while one
part is not in use (Kumar et al., 2019). The energy is not wasted in that case; the fluctuation in
the energy level is avoided with the continuous flow of energy in the system. This is completely
automated without any thing done by the human workers to enhance the process. In fact Amazon
was the first company to do so. Since then flywheel is considered to be the key in the expansion
of the Amazon’s business.
Artificial Intelligence is everywhere and everything in Amazon Company: It is not
just that the company’s energy is controlled and saved by the usage of AI; it is also used in all
other sectors of the company. The main application of the Artificial intelligence in the company
Amazon go store, Alexa and the recommendation engine of the Amazon Company (Lopatovska
et al., 2018). Alexa, an AI bot by the company; it considered to be one of the mostly used and
very famous in the present day. AI virtual assistance with the voice power is also developed for
the first time by the Amazon Company, and the journey of developing it was not smooth. From
Alexa Everywhere: AI for Daily Convenience. In Proceedings of the Twelfth ACM International
Conference on Web Search and Data Mining it by R. Prasad, it is stated that firstly Alexa was
only meant for the music and Amazon Prime along with other product recommendations which

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were private. But now, Alexa is capable of doing much more than that, like set up reminders,
read out books and many more (Prasad, 2019).
According to the In The 41st International ACM SIGIR Conference on Research &
Development in Information Retrieval, Amazon recommendation engine recommends the
products to the customers according to their respective search history (Carmel, Lewin-Eytan and
Maarek, 2018). The information input in the system is stored in the cloud and the
recommendation is done on the basis of that. The Amazon Go Store, tracks the shopping
activities of a user with the help of the photos shared and the items purchased. It is totally an
automated cashier less store.
In Alzheimer's & Dementia: The Journal of the Alzheimer's Association, Alexa’s
contributions have been stated widely (Ravindranath et al., 2018).
Hence, Amazon without Artificial Intelligence is unimaginable for the users as well as
the employees. The way AI has taken over the company in every phase of the system it cannot be
replaced until and unless something more beneficial is invented by the engineers or the scientists.
The Amazon Web Services sells their machine learning services and approaches to the
organisations like NASA and all of this is just possible because of the AI implementation and
development within the company (Vanneschi, et al., 2018). The way it has proceeded for the
betterment with the help of innovation for better services to the customers it can be said that
more features are expected to be added in the website of Amazon Australia in the near future.
Conclusion:
Amazon services are one of the infamous services of the Australia in the field of E-
commerce. It is widely in used website for the purpose of shopping and selling items. Amazon

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has always been working on their customer’s satisfaction in the field of business and for that they
lay their focus on the quality and quantities rather than that of their potential rivals or
competitors. The implementation of the Artificial intelligence has enhanced the process of
Amazon and has created a lot of improvement in services to the customers. The one-day delivery
services, the smart recommendations services to the customer, developing Voice powered
device, using flywheel for constant energy in system and many more have brought a new phase
of Amazon into the light apart from being just a normal E-Commerce website. Development of
the Amazon web services have also resulted in the Amazon’s achievement in the field of the
services in broader organisations like NASA and more. Artificial Intelligence have enhanced the
business process of the Amazon Company in Australia and around the globe as well. Hence, it
can be said that the Amazon Company is highly dependent on the usage of the technology
enriched AI.
Recommendations:
As we all know that there are voice recognition facilities in the amazon e-commerce
website, some more features can be added to it. The powerful voice assistant can be used for the
purpose of the shopping. The monthly grocery items shopping can be done with the help of the
Alexa. In fact, technology can be developed that records and stores the necessary monthly
requirement of a person and reminder can be set such that the items can be added to the cart
automatically and the person can view them and make necessary changes in them and place
order without even have to look back at their history of the shopping cart. Let that job be done by
Alexa. The ready to fly delivery drones can be used for delivering daily items to a certain
coverage area near the Amazon delivery outlets, with the help of the proper GPS tracking
(Lewis, 2019). The whole system can be protected with the implementation of biometrics in the

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payment option or access control in the Amazon information bases in all the places where they
are located. Robot controlled store operation can be inherited by the company which reduces the
errors generated by the human. Moreover, the robots are long lasting with proper maintenance
and correct programming they can perform better task than human being.
References:
Anh, T., 2019. Artificial intelligence in e-commerce: Case Amazon.
Bezos, J., 2015. The Man Who Sells Everything: A Conversation With Jeff Bezos. Foreign
Affairs, 94(1), pp.2-6.
Carmel, D., Lewin-Eytan, L. and Maarek, Y., 2018, June. Product Question Answering Using
Customer Generated Content-Research Challenges. In The 41st International ACM
SIGIR Conference on Research & Development in Information Retrieval (pp. 1349-
1350). ACM.
Davies, J., 2019. Online commerce company Amazon could be setting its sights on the US
pharmacy market. Acute pain, 14, p.44.
Heizer, J., Render, B. and Munson, C., 2017. Operations management. Pearson Education
Limited.
Jackson, P.C., 2019. Introduction to artificial intelligence. Courier Dover Publications.
Kietzmann, J., Paschen, J. and Treen, E., 2018. Artificial intelligence in advertising: How
marketers can leverage artificial intelligence along the consumer journey. Journal of
Advertising Research, 58(3), pp.263-267.