AI in E-commerce: Literature Review on Applications and Advantages

This literature review examines the increasing role of artificial intelligence (AI) in e-commerce, driven by advancements in information and communication technologies. It highlights how AI is being used to influence customer behavior, enhance efficiency, and reduce costs for online retailers. The review covers the meaning of e-commerce and AI, emphasizing the benefits for both retailers (increased customers, orders, and revenue) and consumers (time-saving, product comparison, and 24/7 availability). It also discusses various AI applications such as chatbots, virtual assistants, and machine learning, which contribute to improved customer service, personalized recommendations, and optimized business processes. The review concludes by noting the potential of AI to revolutionize e-commerce by improving work efficiency, decision-making, and product quality, while also creating new jobs and optimizing human resource structures.

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Artificial Intelligence in E-commerce: A Literature Review
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DOI: 10.1007/978-981-16-9113-3_50
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Artificial Intelligence in E-commerce:
A Literature Review
Richard Fedorko , Štefan Kráˇl , and Radovan Baˇcík
Abstract With the development of information and communication technologies,
artificial intelligence is becoming increasingly popular. The main aim of companies
in today’s e-commerce world is to influence customer behavior in favor of certain
products and brands. The application of artificial intelligence as an innovative tool
in the field of e-commerce may seem as a positive step forward. The paper focuses
on the description of the essence of e-commerce and artificial intelligence and their
benefits. The aim is also to evaluate the importance of artificial intelligence and its
use in the context of e-commerce based on available studies on this issue.
Keywords Artificial intelligence · AI · Machine learning · E-commerce ·
Electronic commerce
1 E-commerce and Artificial Intelligence
The modern information age brings along new possibilities, software, and technolog-
ical innovations usable in marketing and shopping. New technologies force compa-
nies to be more creative [1]. Technologies help increase the efficiency, quality, and
cost-effectiveness of services provided by businesses [2]. Contemporary creativity is
based primarily on the development of the so-called information and communication
technologies, which have a major impact on the development of the business environ-
ment. The effectiveness of information and communication technologies depends on
several factors, such as investment in human capital and an appropriate combination
of e-commerce solutions [3]. One sector where the digital transition and importance
of e-commerce are particularly pronounced is retail, where digital tools, such as Web
sites, replace (to a certain extent), or complement physical commerce [4].
R. Fedorko (B) · Š. Kráˇl · R. Baˇcík
Faculty of Management, University of Presov, Konštantínova 16, 080 01 Prešov, Slovakia
e-mail: [e-mail]
© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022
M. Saraswat et al. (eds.), Congress on Intelligent Systems, Lecture Notes on Data
Engineering and Communications Technologies 111,
https://doi.org/10.1007/978-981-16-9113-3_50
677

678 R. Fedorko et al.
1.1 Meaning of E-commerce
Since being described for the first time in the 1980s, e-commerce has become a
global growing trend and is now one of the most popular online activities [5]. The
development of the Internet and the advancement of digital technologies has led to
changes in consumer behavior. Now, people are increasingly using e-commerce to
make purchases [6].
Electronic commerce, or e-commerce for short, means commerce that takes place
in the online environment of the Internet, with the Internet being considered as a
single platform that connects the seller and the buyer [7]. According to Ullman [8],
e-commerce includes all commercial transactions carried out online. This category
includes any Web site displayed on computers, tablets, as well as mobile phones,
which is intended to generate revenue.
E-commerce includes the use of the Internet, Web portals, mobile applications,
and browsers to make a purchase. These are therefore digitally enabled business
transactions between sellers and customers. Almost all Internet users are currently
online shoppers [9].
The advantages of e-commerce for online retailers (see Fig. 1) lie mainly in a
larger number of customers served, a larger number of orders and better provision
of information. Online retailers can run an online store at lower operating costs than
a brick-and-mortar store, which in turn translates into higher sales [10].
Ganapathi [11] states that online shopping offers several benefits to customers
(see Fig. 2). The customer does not have to physically visit the brick-and-mortar
shop, which saves time. The consumer has the opportunity to choose from a wide
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Artificial Intelligence in E-commerce: A Literature Review 679
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range of products and also the possibility to compare products or prices. Online stores
also offer customers discounts that cannot be obtained in a brick-and-mortar store.
The big advantage is 24/7 availability, so the online consumer can make a purchase
anytime and anywhere.
E-commerce is the result of economic, scientific, technological, and cultural devel-
opment. The development of e-commerce is changing the way businesses do busi-
ness as well as consumer behavior and is making a significant contribution to the
progress of the global economy [12]. As the importance of the Internet is growing,
online commerce provides a competitive advantage to those who sell online. Internet
commerce gives all businesses in the world access to a global online market in which
they generally have the same chance to compete with each other [13]. Consumers
are now imposing new requirements and businesses are constantly exposed to chal-
lenges of how to meet these requirements. The implementation of e-commerce in the
company requires fundamental changes to be made in the current business models
and business activities, as well as the implementation and use of sophisticated digital
technologies [14].
1.2 Meaning of Artificial Intelligence
Thanks to artificial intelligence, technical systems are able to distinguish the envi-
ronment in which they find themselves, recognize the problem, and solve it, while

680 R. Fedorko et al.
working toward the predetermined goal. The computer system receives data that are
prepared or collected by its sensors, such as cameras. It processes this data and then
responds. Artificial intelligence systems can work autonomously and to some extent
adapt their behavior based on the analysis of previous steps [15].
Over the last few decades, artificial intelligence applications have evolved rapidly.
In the early stages, artificial intelligence was used in expert and knowledge systems
to provide recommendations. At present, in the age of technological advancements,
artificial intelligence has become more human and more capable of solving problems,
learning, manipulating objects, and navigating physical space [16]. Thus, innovation
and more efficient use of technology have led to the creation of intelligent systems
that can manage and monitor business models with reduced human participation [17].
The development of artificial intelligence has brought enormous economic benefits
to humanity, improved almost all aspects of life, and significantly promoted social
development and brought about a new era [18].
Artificial intelligence is considered to be a new interdisciplinary technological
science that develops theoretical methods, technologies, and applications for the
simulation and expansion of human intelligence [12]. The application of artificial
intelligence has been examined in sectors such as health care, business, education,
manufacturing, marketing, and financial management [19–21].
It is not easy to find a uniform and correct definition of artificial intelligence.
Russell and Norvig [22] summarized different definitions of artificial intelligence
systems within two categories (see Fig. 3).
Artificial intelligence systems should have capabilities such as information
processing for communication in natural language, the ability to store and present
information, automatic reasoning—using stored information to answer questions and
draw new conclusions, machine learning to adapt to new circumstances, and to detect
new patterns of behavior [23].
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Artificial Intelligence in E-commerce: A Literature Review 681
Thus, artificial intelligence is able to carry out the automatic activity of mental
work by simulating and expanding human intelligence. The core of artificial intel-
ligence is intelligent technology on the basis of which intelligent tools similar to
human intellectual work are developed, e.g., robots, voices, or image recognition.
These tools can react immediately after receiving control commands [12]. Other
means of artificial intelligence include expert systems, decision support systems,
and machine learning [24]. One of the means used by artificial intelligence is also
fuzzy logic. It is a tool that can computer-display human action, process, and inter-
pret information and knowledge as if it was performed by a human. The correct
use of fuzzy logic in conjunction with artificial intelligence enables better planning,
objective professional evaluation and risk assessment, rational decision-making, and
management. It can also help eliminate errors associated with human factor failure
[25, 26].
Key artificial intelligence capabilities include forecasting, planning, and learning.
More importantly, however, artificial intelligence capabilities are not independent—
they interact and cooperate with human capabilities to create business value in terms
of efficiency and effectiveness [27]. Artificial intelligence has the potential to tran-
scend human intellectual and physical abilities, offering opportunities to increase
productivity and performance. In order for artificial intelligence to work best in the
company, it is necessary to effectively integrate it with existing business processes
[28, 29].
Artificial intelligence can reliably perform computer tasks and automate repeti-
tive learning. It is also able to analyze large amounts of data more accurately and
deeply and get the most out of them. Artificial intelligence adapts through progres-
sive learning algorithms, which become a classifier or predictor. Moreover, artificial
intelligence is capable of delivering intelligence to existing products; as in many
cases, artificial intelligence is not sold as a stand-alone application but rather as an
improvement of the product already in use [30].
Artificial intelligence has an irreplaceable role to play in the development of the
society and has brought some serious benefits (see Fig. 4) in terms of improving
work efficiency, reducing labor costs, optimizing the structure of human resources,
and creating new jobs [31]. Davenport and Ronanki [28] add better decision-making,
improvement of existing products, employees focusing on more creative work,
creation of new products, and monitoring new markets to the list of business benefits
of artificial intelligence.
The rapid development of artificial intelligence in terms of its ability to make
decisions in complex and unforeseen circumstances in the production environment
in recent years has been mainly caused by increased investments in innovative tech-
nologies and the availability of large amounts of data [32]. Studies estimate that by
2030, it is likely that 70% of businesses will use some form of artificial intelligence
technology in their business processes and activities. The process of adapting and
introducing artificial intelligence into companies along with advanced technologies
is projected to gain in popularity [33].

682 R. Fedorko et al.
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Fig. 4 Advantages of artificial intelligence
2 Role of Artificial Intelligence in E-commerce
Today, e-commerce is one of the industries that makes the most of artificial intelli-
gence by building a huge customer base, trying to understand customer needs, doing
real-time research, coming up with ultimate solutions, and many other activities [34].
Table 1 outlines selected studies that focus on the role of artificial intelligence in
e-commerce. It contains authors of the study, objective of the study, study theme,
and main findings.
2.1 Artificial Intelligence Use in E-commerce
Artificial intelligence can take several forms. When it comes to software artificial
intelligence, this includes so-called virtual assistants, image analysis software, search
engines, and speech and face recognition systems. Artificial intelligence built into
material devices include robots, self-propelled cars, or drones [15].
Artificial Intelligence Assistants—Chatbots
The e-commerce Web site is available to customers 24 h a day, 7 days a week, with
24-h customer support provided by virtual assistants/chatbots. The primary function
of the chatbot is to automatically answer customer questions, respond to simple
voice commands, and provide product recommendations using a natural language
processing system. Chatbots can also be defined as a type of software application

Artificial Intelligence in E-commerce: A Literature Review 683
Table 1 Selected studies about artificial intelligence in e-commerce
Reference Objective Study theme Findings
Song et al. [12] To analyze the present
situation of the
application of artificial
intelligence technology
in the field of
e-commerce
Artificial intelligence
in e-commerce
Artificial intelligence
will become an
important driving force
for the transformation
of e-commerce
Zhang et al. [27] To explain how
artificial intelligence
technology, people, and
processes should be
managed to
successfully create
value
Artificial intelligence
in e-commerce
The key artificial
intelligence capabilities
generated include
forecasting, planning,
and learning. They are
not independent—they
interact and coevolve
with human capabilities
to create business value
Soni [34] To analyze the use of
artificial intelligence in
e-commerce business
Artificial intelligence
in e-commerce
Artificial intelligence
can help people excel in
their high sales and
customer relationships
in the e-commerce
business
Kar and Haldar [36] To analyze specific
integration of chatbots
in the IoT systems
Applying chatbots to
the Internet of Things
Chatbots can help
consumers find
products, check order
status, compare
products, and connect
them to the customer
support service staff
Kumar and Trakru
[37]
To present impact of
artificial intelligence in
e-commerce
Artificial intelligence
in e-commerce
Integration of artificial
intelligence in
e-commerce companies
can help create
sophisticated solutions
and will impact
transactions, customer
retention, satisfaction,
and efficiency
Pallathadka et al.
[38]
To discuss machine
learning and artificial
intelligence
applications in
e-commerce, corporate
management, and
finance
Artificial intelligence
in business
management,
e-commerce, and
finance
The most common
applications include
sales growth, profit
maximization, sales
forecasting, inventory
management, security,
fraud detection, and
portfolio management
(continued)

684 R. Fedorko et al.
Table 1 (continued)
Reference Objective Study theme Findings
Shankar [42] To present a framework
for understanding
artificial intelligence,
outline applications of
it in different facets of
retailing, and discuss
the future of artificial
intelligence in retailing
Artificial intelligence
in retailing
Artificial intelligence
will enable retailers
better understand
consumer psychology
by getting them closer
to what the human brain
is thinking at any given
moment
Makridakis [48] To present changes
caused by artificial
intelligence, contrasts
with the industrial
revolution, the impact
on developed and
developing countries,
and the dominant firms
in artificial intelligence
The potential effects
of artificial
intelligence on
businesses,
manufacturing, and
commerce
Relationship between
artificial intelligence
and humans will
strengthen; companies
will focus on creating
values through
collaboration between
the human workforce
and artificial
intelligence tools
Luo et al. [49] To study the impact of
artificial intelligence
chatbot disclosure on
customer purchases
Impact of artificial
intelligence on
customer purchases
Prior experience with
AI induces more
customer purchases and
is helpful in reducing
the negative disclosure
effect
Loureiro et al. [52] To provide an overview
of state-of-the-art
research on artificial
intelligence in the
business context and
propose an agenda for
future research
Artificial intelligence
in business
Future trends in
artificial intelligence are
the development of
advanced automated
systems, integration of
neurostimulators, and
nanochips into the
brain, smart devices
connected to artificial
intelligence systems
that uses artificial intelligence to conduct an online conversation via text or voice
media with consumers visiting a given Web site or application. Chatbots are able to
respond to customer questions and requests, which can help consumers find suitable
products, check order status, compare different products, and help consumers with
their payments. In case of complaints or questions, they will direct customers to the
customer support service staff, who will take over [12, 35, 36].
Recommendations Tool
Using an artificial intelligence algorithm, it is possible to carry out statistical program-
ming, forecasting, and analysis of consumer behavior, large datasets and predict
which products have the potential to attract customers. Based on recent searches for

Artificial Intelligence in E-commerce: A Literature Review 685
potential customers, the algorithm is able to record key information of the searched
product. The recommendation tool then generates the appropriate suggestions for the
browser and displays what will ultimately help customers find the product quickly
[12, 37, 38].
Visual and Voice Search
Using artificial intelligence, it is possible to implement visual and audio searches
on Web sites. Visual and audio searches are based on image and sound processing
algorithms. Customers do not need to enter keywords in the search; they can search for
the product using an image or voice [37, 38]. In a visual search, a potential customer
uses an image or photo as input instead of a regular text search. The customer takes
a certain object or text or uploads an image, which is then recognized by the search
engine and displayed in the search results [39]. Voice search allows users to use
spoken language as an input. Results are displayed once a voice query is transcribed
by the system. Voice search is based on intelligent natural speech recognition and
processing technologies. The user is thus presented either with a spoken answer or
relevant results in the form of text or images [40].
Customer Relationship Management
Customers are an important part of an e-commerce business. In the past, companies
used employees to manage customer relationships. Nowadays, artificial intelligence
systems are becoming more and more popular. Artificial intelligence is able to predict
how consumers will behave when shopping, what products selected customers will
choose and how the company can build and maintain the best possible relation-
ships with them. Using artificial intelligence, a company may obtain information
on customer satisfaction and carefully plan how to respond to customer needs and
requirements, regardless of time and situation. Artificial intelligence helps people
build a balanced environment in which man and machine work together to make a
profit and sales [34, 38].
2.2 Perspective of Artificial Intelligence in E-commerce
Human intelligence often seems to be limited in performing certain tasks in e-
commerce. This concerns in particular the forecasting of demand and supply chain
mechanisms. It is in these cases, which are a challenge for businesses that artificial
intelligence appears to be a useful tool [41]. Shankar [42] states that artificial intelli-
gence helps increase the profitability of e-commerce through all available tools, helps
improve personalized recommendations and payments. It also improves customer
relationship management, logistics management, and inventory optimization.
Artificial intelligence technologies have been integrated into marketing and retail,
where big data analysis is used to develop personalized customer profiles and fore-
cast customer shopping habits. Understanding and predicting consumer demand

686 R. Fedorko et al.
through integrated supply chains is more important than ever, and artificial intelli-
gence technology is likely to be an essential integral element [29]. The development
and implementation of artificial intelligence require a high level of acceptance of
this technology in the future. Using such technology, traders can match product
information with information that consumers are looking for in order to ensure
the efficient consumption of products or services [43, 44]. Artificial intelligence
helps e-commerce follow business trends, changing customer needs in the market.
The company can gather a wide range of information, assess customers, and then
adequately respond to their requirements and habits by providing quality services.
Once a proper response is chosen, the business entity can expect increased customer
comfort, increased satisfaction, and balance of supply and demand mechanisms
[2, 41].
Juniper research [45] reports that the artificial intelligence demand will increase
between 2019 and 2023, and that chatbots will make around 22 billion interactions,
which represent an increase from the current 2.6 billion over the same period. This
study highlights a new trend—companies are investing heavily in artificial intel-
ligence to improve trend analysis, logistics planning, and inventory management.
Innovations based on artificial intelligence, such as Virtual Mirror and Visual Search,
are tailored to improve customer interaction and reduce the gap between physical
and virtual shopping experiences.
Scientists say that in the future the relationship between artificial intelligence
and humans will strengthen—this theory is moving away from the previously held
opinion that AI will replace humans. Companies that will enter the market in future
are likely to focus on creating values through integrated collaboration between the
human workforce and artificial intelligence tools. An important step to success is
to create partnerships in which artificial intelligence will work and predict, and
human will explain and decide on appropriate measures. Thus, people will focus on
value-added activities that require design, analysis, and interpretation based on the
processing and outputs of artificial intelligence [46–48].
The great potential of artificial intelligence is unquestionable, but many chal-
lenges still need to be met in order to be perfectly put into practice. Shankar [42]
recommends researching the consequences of the unintentional impact of artificial
intelligence on customers. Luo et al. [49] recommend that it be appropriate to focus
research on improving bots and eliminating their defects, which could strengthen
consumer confidence. They also state that businesses should focus on streamlining
the use of artificial intelligence in social networking. According to Moriarty [50],
the connection between artificial intelligence and virtual reality applications should
be researched in more detail. According to Tousignant [51], future research should
also focus on examining the relationship between artificial intelligence and online
evaluations, in particular the identification of false reviews.
Kumar and Trakru [37] point to potential e-commerce threats and challenges that
limit the efficiency and effectiveness of artificial intelligence in meeting business
expectations. For this reason, it is necessary to constantly explore the possibilities and
opportunities in view of the changing requirements of consumers in e-commerce. In
order to support progress in research on the application of artificial intelligence in the

Artificial Intelligence in E-commerce: A Literature Review 687
business sector, it is necessary to examine the effectiveness of artificial intelligence
in a multidisciplinary context. Based on comprehensive knowledge, experts and
researchers will be able to set priorities and tasks to manage investments in important
aspects of artificial intelligence, including for e-business more efficiently [52].
3 Conclusion
The aim of the paper was to describe the essence of e-commerce and artificial intel-
ligence and their benefits. The paper also provides insight into the evaluation of the
importance of artificial intelligence and its future use in the context of e-commerce
based on available studies on this issue.
In today’s world of commerce and digital technology, e-commerce plays an impor-
tant role. Today, people use the Internet on a daily basis; they are willing to try
new products and brands, but they are also critical and demanding. In this case, e-
commerce appears to be a suitable option to meet their requirements. The application
of artificial intelligence in e-commerce has become the subject of interest of many
business scientists and experts. Previous research has highlighted the need for further
research that would contribute to the development of knowledge and strategies in
the application of artificial intelligence in e-commerce. It is possible to expect that
artificial intelligence in the conditions of electronic commerce will be used more and
more often and will become an integral part of all companies of this type.
Acknowledgments This research is one of the partial outputs under the scientific research grants
VEGA 1/0694/20 “Relational marketing research—perception of e-commerce aspects and its impact
on purchasing behavior and consumer preferences” and VEGA 1/0609/19 “Research on the devel-
opment of electronic and mobile commerce in the aspect of the impact of modern technologies and
mobile communication platforms on consumer behavior and consumer preferences.”
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