Holmes Institute: HC3152 E-Business Applications - Amazon & AI

This report delves into the application of Artificial Intelligence (AI) by Amazon Australia to enhance its e-business operations. It begins with an overview of Amazon Australia, detailing its expansion, product offerings, and operational strategies, including its supply chain and payment methods. The core of the report focuses on the importance of AI for business survival, highlighting how AI enables product recommendations, voice assistants, and efficient logistics. The report then examines how Amazon Australia specifically uses AI through strategies like the "flywheel" management approach and the integration of AI across various platforms such as Alexa and Amazon Go. The analysis includes insights from relevant articles, discussing the impact of AI on e-commerce, the restructuring of AI and machine learning within Amazon, and how AI contributes to Amazon's financial success, concluding with a discussion on how AI is utilized by Amazon to dominate the market. The report also references key articles that explore the broader impact of AI in e-commerce, including its role in enhancing customer experience, optimizing operations, and driving sales, supported by case studies. The report concludes by emphasizing how Amazon uses AI to increase its sales and user experience.

E-BUSINESS APPLICATIONS
By (Student’s Name)
(Course Name)
(Tutor’s Name)
(Date)

Introduction
Artificial intelligence has already started to embed itself in all aspects of our lives. Giants
companies such as Microsoft and Google have already started investing heavily in new Artificial
Intelligence initiatives. For example, the Google Company recently purchased DeepMind for
400 million dollars. DeepMind is a company that specialized in machine learning and
algorithms. According to Raturi, artificial intelligence is one of the hottest topics, in the current
ever-changing technological world. The topic is ahead more than other topics such as cloud
computing as it offers innovative and smart business solutions. Computer scientist has indicated
that the field of Artificial Intelligence adds valuable elements to e-commerce platforms. This
monogram will describe how Amazon Australia is using artificial intelligence to drive higher
sales and user experience.
An overview of Amazon Australia
To start with Amazon Australia is a US-based online relater company that started in
1994. The company started by selling books online to selling its own tablets, washing powder,
garden tools and other products. The company has expanded to Australia with a brand name
Amazon Australia. Australians have for ten years now been able to sell shop from amazon.com.
In Australia Amazon manages all its customers’ sales through their accounts. The accounts are
set up for free and incur no charges. In Australia Amazon sells a range of products which include
clothing, music, video games, electronics, sports/fitness goods, baby items, beauty products,
books, home-wares, and stationery.
Amazon Company as a whole is a retailer but the major secret of its success has long
been mastering its supply chain logistics. The company has opened a fulfillment center in

Melbourne South for goods across Australia. Currently, the company does not run a retail
location, meaning that it does not make any plans for a family shopping trip.
When one buys from Amazon it depends on what you are buying. In most cases, a
customer from Australia usually purchases from Amazon marketplace sellers who are
independent small businesses. Nerveless, Amazon also does shipping goods directly from its
own warehouses which includes its own branded line of low-cost products. Once one does
purchasing, the Amazon Australia site is linked to various methods of payment such as debit
cards or credit cards. A customer can edit the type of payment method at any time in their
amazon account. Currently, a customer is not able to order an item through an international
Amazon site. This is because of the current roll-out new laws that govern GST on oversees
which was done in July 2018. Amazon changed its policies regarding accessing international
versions of its sites like Amazon US from July 1st, 2018. This means that internal stores do not
deliver to Australian addresses.
To deliver a product from AMAZON Australia it depends on where one lives and what
one is prepared to pay. From Amazon Australia, priority delivery is available on the same day
that one has made the purchase capital cities and it is done within one to three days in other
locations. From the site of a customer who spends more than 49 dollars, one qualifies for free
delivery which takes at most ten days but it depends on the location. For example in a customer
in Sydney takes three to seven business days to deliver a product on free delivery and one
business day if the product costs more than 49 dollars. Amazon charges its sellers. The fee
structure is at 49.95 dollars to list products on Amazon.com.au and a commission fee of 15
percent on top of sales. In addition to its sellers, the company also sells its products which are
branded its own image (Harris & Hutchison, 2008).

Reason as to why Artificial intelligence is important for business survival
Artificial intelligence is a special and essential technology which said to be the best as it
describes how one can use deep learning techniques over the advantage of their business. An
organization can use AI to come up with product recommendations based on what many users
have already liked. Currently, most businesses are finding it difficult to know who bought a
certain product on a certain retailer. This means a business can use, AI to detect those products
which have a correlation before surfacing to its products on the internet. Second with AI, one can
use Alexa voice assistant to allow shoppers to just grab items and just walk out. AI offers guide
robots which in turn assists customers to locate a product very quickly.
Third organizations such as Amazon-like to use the work flywheel, to describe the
various parts of its enormous business work as one perpetual motion machine. This means that
the organization can implement AI flywheel, where deep-learning innovations can one part of the
company fuel to another level of high sales, Third an organization can use AI to show its
customers the next best product. Also by using AI, an organization is able to determine what
potential is to read from their site.
Forth, a business can use a combination of next-in-sequence and collaborative filtering
models to make predictions on the best goods that an individual customer which may need next
instead of the current method used by most of the e-commerce business is a massive database of
consumer purchase behavior to power all its predictions, with AI, a business can be in a position
to re-route its changes in delivery of its products and make adjustment for efficiency and
accuracy. In addition, with AI, e-commerce will be in apposition to enable its customers to
search for a product using images or a conversational language that is best suited to its
customers.

Fifth with AI, an organization will be in a position to align its merchant’s offering with
its consumer needs. This, in turn, assists in reducing obstacles and risks to purchase. It is
important to note that an e-commerce site needs more humans than machines, these means e-
commerce can use AI which assists a buying for 24 hours for customers. As compared to humans
AI does not sleep, does not get fatigued as compared to human beings.
In addition, AI gives a business a competitive edge as customers are able to find
matching products, thus enabling buyers to discover complementary products on the e-commerce
site whether it is size, shape, and fabric (Russell & Norvig, 2014)
How Amazon Australia uses Artificial intelligence
To start with Amazon uses an AIM management strategy which is referred to as the
flywheel (Karlinsky, 2019).Second, in Amazon AI is not located in just only one office, it is
located everywhere. Machine learning and AI technology powers three major Amazon products
which are Alexa and the Amazon Go Store; this assist in creating an Amazon recommendation
engine. Here AI plays a major role as it generates 35 percent of Amazon search engine. Third,
Amazon has created Amazon echo which is one of the AI feature found in Amazon which has
created a voice-powered virtual assistant which could fit on a countertop (Stones, 2017).
Third by using AI, Amazon has been in a position to revel the newest fulfillment center
robots which are referred as Xanthus and Pegasus and new drone which does commercial
deliveries within months. With Artificial Intelligence Amazon has been in position to deploy
over 200,000 robots which has enabled the company to increase its productivity and safety of its
or its products (Weiss, 2013).
Articles relevant to this work

Practical AI for E-commerce; how Artificial Intelligence can dramatically improve E-commerce
article
There are various articles which relates to artificial intelligence. One of the articles is
Reflektion “Practical AI for E-commerce; how Artificial Intelligence can dramatically improve
E-commerce”. The article is by Elizer Yudkowsky who is the co-founder if machine learning
institute. The article has three major components which are the practical AI, on NLP and voice
commerce, and color synonym mapping. The article offers enormous knowledge on AI, which
has offered a glimpse into how AI works. The article has also highlighted of how AI can improve
customer experience and how it can impact critical e-commerce KPIs (Gartner, 2018).
The colossal impact of artificial intelligence in e-commerce
Another article is by Tapan Kumar, “The colossal impact of artificial intelligence in e-
commerce”. The article has clearly indicated the goal of artificial intelligence and machine
learning. According to Kumarm a professor, AI and machine learning has great impact in both
society and in business world. To the society AI assist people in sorting, finding of relevant data,
and searching. The author has continued to Indicate that giants companies such as eBay, Flipkart,
eBay, and Amazonare standing on a bleeding edge of AI. The article assists this paper as it
presents impact of AI in e-commerce industry. To start with the author has indicated how the
trend of e-commerce industry has grown from 2014 to current. According to the author e-
commerce industry will had hit the 4878 mark. The author has also continued to indicate some of
the investment areas of e-commerce which are digital marketing, salesforce automation, e-
commerce which is at 20 percent, data analytics, and customer support and service. In e-
commerce industry some of the companies which have implemented artificial intelligence are e-
Bay, Amazon, and e-Bay. The author has indicated the parts of e-commerce which are ML, NLP,

and Data. All the areas assists the e-commerce industry to grow. According to the author the data
mining part of e-commerce assists in mining large amount of current data. Some of the
application of AI into E-commerce as indicated by the author are visual and voice search; which
assists in sorting and searching of data patterns on changing day by day. Then there is AI
assistants and chatbots which assists in responding to customer as per enquires, then there is
smart logistics which assists in managing of online warehouse and then the recommendation
engines. The author has concluded by highlighting some of e-commerce case studies. Some of
the companies indicated by the author Amazon which assists the company in collecting of
training data, the JD.com which improves efficiency of warehouse operation. The Alibaba where
the company uses AI algorithms to find the best delivery route (Kumar, 2019).
“How Amazon has re-organized artificial intelligence and machine learning”
The article by Forbes is another article which contains a lot of Amazon. The article “How
Amazon has re-organized artificial intelligence and machine learning” is written by Blake
Morgan. The article has started off by looking at the inner looking of Amazon Company.
According to Forbes Amazon is one of leading customer experience in innovation. Blake has
indicated how Amazon has implemented AI technology in its aspiration of increasing its sales.
According to Blake Amazon has used AI in management of its strategies. Second the company
has used AI technology to improve its product forecasts. Third, AI creates a cohesive customer
experience, where a customer can visit Amazon Go store and able to get few items for dinner
(Morgan, 2018).
“How AI is assisting Amazon become a trillion-dollar company”

This is a peer-reviewed article which has described vividly how Amazon is using AI to
make a lot of money. The article is by Daniel Terdiman. From the article, Amazon Company has
used AI to come-up with product recommendations which are based on what uses like most. By
using AI, the company is able to come up with robots which are able to monitor customer’s
behavior. According to the author these robots are able to spring when a customer buys anything
from the site. The article has also highlighted how Amazon can increase its usage in AI. Some
of the over-use of AI by Amazon is in Go’s system. Go system is prone to errors (Terdiman,
2018).
Amazon: The Company Consuming consumers
The article by Matt Ward “Amazon: The Company Consuming consumers” has clearly
highlighted how four giant companies Facebook, Google, Amazon and Apple are utilizing AI
strategies to dominate the world. The article has clearly highlighted the areas in which Amazon
company has utilized in AI become the world leading e-commerce industry. This article greatly
highlights the benefits of E-commerce. The article is supported by figures and charts (Ward,
2018).
Conclusion and recommendations
Artificial Intelligence is one of the current technologies that is assisting most business
grow. Amazon is one of the companies from a humble background i.e. the era of machine
learning to a big company that every company would wish to emulate. From this paper it is
evident that organizations needs to start using AI and machine learning approach when carrying
its daily activities. By taking advancement of AI advancements it offers personalized AI
solutions to small and large businesses.

References
Gartner, 2018. Practical AI For E-Commerce How Artificial Intelligence Can Dramatically
Improve E-Commerce Customer Experiences. Artificial Intellegence.
Harris, R. & Hutchison, P., 2008. The Amazon. 3rd ed. New York: Globe Pequot Press.
Karlinsky, N., 2019. How artificial intelligence helps Amazon deliver. [Online]
Available at: https://blog.aboutamazon.com/innovation/how-artificial-intelligence-helps-amazon-
deliver
[Accessed 4th October 2019].

Kumar, T., 2019. THE COLOSSAL IMPACT OF ARTIFICIAL INTELLIGENCEINE-
COMMERCE:STATISTICS AND FACTS. International Research Journal of Engineering and
Technology, 6(5), pp. 570-572.
Morgan, B., 2018. How Amazon Has Reorganized Around Artificial Intelligence And Machine
Learning. [Online]
Available at: https://www.forbes.com/sites/blakemorgan/2018/07/16/how-amazon-has-re-
organized-around-artificial-intelligence-and-machine-learning/#4c9c1b257361
[Accessed 30th September 2019].
Russell, S. J. & Norvig, P., 2014. Artificial intelligence : a modern approach. 2nd ed. Boston:
Boston Pearson.
Stones, E., 2017. Artificial Intelligence A Modern Approach.. 4th ed. Chicago: Larsen & Keller
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Terdiman, D., 2018. How AI is helping Amazon become a trillion-dollar company. [Online]
Available at: https://www.fastcompany.com/90246028/how-ai-is-helping-amazon-become-a-
trillion-dollar-company
[Accessed 30th September 2019].
Ward, M., 2018. Amazon: The Company Consuming Consumers. [Online]
Available at: https://becominghuman.ai/amazon-google-facebook-and-apples-strategies-for-
world-domination-bc84be1a965b
[Accessed 30th September 2019].
Weiss, G., 2013. Multiagent systems : a modern approach to distributed artificial intelligence.
3rd ed. Chicago: MIT Press.