AI, Big Data and E-Commerce: Transforming the Global Space
The advancement of technology and the internet have had a direct connection with the growth and evolution of e-commerce. How has e-commerce revolutionized the world? How has the integration of Big Data and AI helped transform the e-commerce industry? During the last decade, the e-commerce industry has seen a boom, with the internet becoming the preferred medium for marketing, promotion and selling products, compared to the traditional way of in-store shopping. In the early days of e-commerce, online transactions were made through basic online forms or email.
As the internet started to gain more prominence worldwide, online marketplaces like Amazon and eBay started to emerge in late 1990s and 2000s, which revolutionized and completely changed the way people see shopping, where people would buy and sell products online, check-out on the platform and pay the required amount, and the product would be delivered to their destination within the designated timeline. E-commerce, short for electronic commerce, has grown and changed significantly since online retailers began opening their doors in the early 1990s. Back then, online shopping wasn’t a part of everyday life; it was as new and unfamiliar as email, instant messaging, and MP3 files.
The Five Stages of E-commerce
E-commerce has emphasized convenience during the past two decades as a response to shifting consumer expectations and behavior. Instead of having one computer at home (if we were lucky), we now carry around palm-sized devices. We have gone from having a simple user interface on a black and white screen to interactive e-tailers giving services like a real-life sales clerk thanks to the digital revolution. A recent timeline of the five stages of e-commerce evolution and its trends is stated below:
2000-2005: Optimizing Search Functions
2005-2010: Encouraging buyers to spend online and working on click-to-conversion strategies
2010-2015: Increasing order value and providing incentives to the buyer
2015-2020: Creating brand loyalty and retaining customers
2020-Present: Maintaining brand value and working towards sustainability to encourage buyers for targeted buying, using Artificial Intelligence, Big Data, Analytics and trends to gather audience as per the categories and market timelines
Multiple E-Commerce Platforms
With the passage of time, e-commerce has started to evolve, with the advent of social media, mobile commerce and omnichannel commerce. As of today, there are thousands of online platforms where people buy and sell products through mobile devices, social media/social commerce involves the use of social media applications like Facebook, Instagram, WhatsApp Business to list and promote their products and sell them online. Omnichannel commerce includes creating a seamless user experience by integrating products across multiple channels like online stores, social media, and mobile applications. With the first two decades of evolution being a transition phase, and creating e-commerce fundamentals, the last 3-4 years have been very critical to its growth and its user feasibility and accessibility has become ubiquitous.
Artificial Intelligence in eCommerce and Content Creation
Recently, the e-commerce industry has been influenced by emerging and innovative technologies like Blockchain, Artificial Intelligence, virtual reality and data analytics. These technologies have completely transformed the way we shop, by making our experiences more immersive, precise and secure, as we receive ads, updates and suggestions to buy products as per our imaginations, latest searches and recent trends. Amazon, Walmart, and eBay remain the largest e-commerce companies, but the way they conduct business is far more refined and sophisticated than it was in the early days of e-commerce. These platforms are now influenced by AI. Chatbots and customization engines driven by AI are becoming more widespread in e-commerce, enabling businesses to offer individualized customer service and purchasing experiences.
AI may be used to analyze client data, improve pricing, and improve marketing plans. AI powered learning algorithms have the capability to analyze user behavior, preferences, and feedback to create smart content experiences. Thanks to machine learning algorithms, AI devices also get “smarter” the more they interact with customers and the more data they have to process. Using big data from your customers’ previous purchases and interactions, you can pinpoint what they want and deliver messages that resonate with them. For example, AI can predict customer shopping patterns based on the products they purchase and send them personalized mail with an applicable discount. But those tools can do so much more – here are a few examples of how to use data gathered by AI to boost your e‑commerce store customer experience.
AI can also be used in content creation and editing. Itcan detect the most effective headlines, keywords, and formats based on user engagement, which can result in improved SEO performance and higher conversion rates. This trend also helps buyers with their suggestions, buying trends and use of analytics allow them to land at their choice of product. The AI algorithms can also help you edit and proofread your content. These tools can automatically check grammar, spelling, punctuation, and readability, providing writers with valuable suggestions for improvement. AI-powered editing tools can analyze sentence structure, detect repetitive words or phrases, and offer alternative vocabulary choices to enhance the overall quality of the content. By using AI-based editing tools, content writers can streamline the editing process, ensuring high-quality content that is error-free and engaging. This technology can also help non-native English speakers to improve their writing skills by providing real-time feedback and language suggestions.
Big Data and Analytics
The implementation of Big Data and analytics is helping eCommerce business owners stay ahead in the market competition. Big Data is a huge collection of data that companies can use to figure out which product or service, price, and advertising is best to increase their business profits. Ecommerce analytics involves the process of collecting useful data from multiple channels that impact your eCommerce store. You can even use this valuable data to understand shifts in user behavior and online shopping trends. Big data resources help in optimizing logistics, supply chain management, inventory, and business operations. This results in enhanced performance and significant cost reductions.
Effect of the COVID-19 Outbreak
Since the COVID-19 outbreak in November 2019, businesses started to shut down and start the trend of working from home. Restaurants got shut down. Cinemas, malls, and entertainment parks were closed and people were stuck in their homes. During this time, the e-commerce industry went through the most significant transformation since its inception. The future trends changed completely and online businesses like Amazon, eBay, Shopify, Noon recorded record profits in that timeline. E-commerce sales amounted to more than $4.9 trillion in 2021, and it is expected to increase by more than 50% by 2025. This explosive growth has been fueled by increased access to high-speed internet and the spread of smartphones, which are owned by over 5 billion people globally.
The development of ecommerce has been fueled by technological advancements, and a number of enabling technologies have been essential to this development. Here are a few illustrations:
As more people started to purchase online using their smartphones and tablets, the growth of mobile devices has had a big influence on ecommerce. Many e-commerce businesses have created mobile applications and optimized their websites for mobile use as a consequence.
Shopping online has become simpler and safer thanks to payment gateways like PayPal, Stripe, and Square. These systems enable users to quickly and securely save their payment information and make purchases.
By offering a decentralized ledger of all transactions, blockchain technology has the potential to increase the security and transparency of e-commerce transactions. By doing so, fraud may be reduced and customer and seller trust may rise. One example of blockchain is cryptocurrency, which has gained a lot of prominence amongst the general audience and a lot of people worldwide have made huge amounts of money trading online via cryptocurrency, a type of currency which works on the phenomena of blockchain, and many countries have legalized this currency, where banks are basically rendered useless, and started to adopt it as a mode of payment on various platforms.
AI, Big Data and E-Commerce: Latest Facts, Figures and Statistics
As of May 2023, the ecommerce market is worth $6.3 trillion globally
Global E-commerce sales are predicted to reach $6.39 trillion in 2024, and exceed $7 trillion in 2023 (Worldwide sales were a little over $1 trillion in the not-so-distant-past of 2014)
The ecommerce market is set to expand by 10.4% by the end of this year
Projected social commerce sales are expected to hit $2,900 billion by 2026
Singapore’s market had a growth rate of 36%, the largest compared to any other country, in 2022
Fashion is the highest-grossing ecommerce sector, with $871.2 billion in ecommerce sales in 2022
Food is the fastest-growing ecommerce sector, with $244 billion in ecommerce sales in 2022, generating an increase of 16%
4.11 billion people purchased goods online in 2022, 8% more than the total online purchase in 2021
As of January 2023, 57.6% of worldwide internet users buy something online at least once a week.
In 2022, 60% of ecommerce purchases happened on a mobile device
As of March 2023, 29% of internet users make an ecommerce transaction on their phones at least once a week
37% of businesses use Artificial Intelligence, and it is estimated to increase productivity by up to 40%
The global AI market value is expected to reach $267 billion by 2027.
28% of companies use AI for marketing purposes
Around 71% of people believe that AI is more innovative than people.
44% of businesses use AI technologies to lower operational costs.
Businesses with more than 100,000 employees are more likely to have a strategy that implements AI.
12% of businesses use AI for content creation.
84% of global business organizations believe that AI will give them a competitive advantage.
By 2027, 80% of retail companies anticipate using AI in some capacity.
Only 19% of adults believe that AI will improve productivity in their workplace.
75% of companies plan to use AI systems to eliminate fraud.
72% of adults in the U.S. think that AI can handle repetitive tasks.
36% of executives say their primary goal for incorporating AI is optimizing internal business operations.
66% of bloggers who use AI primarily create How-To content.
Bloggers who use AI spend about 30% less time writing a blog post.
Nine out of ten leading businesses have investments in AI technologies, but only 14.6% deployed AI capabilities in their work.
AI adoption in education is predicted to be worth $6 billion by 2024.
Intelligent robots are estimated to replace 30% of the human workforce globally by 2030.
According to the World Economic Forum's Future of Jobs Report, AI-powered machines will replace 85 million jobs by 2025.
The number of AI startups grew 14 times over the last two decades.
26% of consumers say they interact with AI on a daily basis.
By 2030, China is predicted to be the biggest AI market, accounting for 26.1% of the global AI market share.
More than 60% of enterprise executives envision their company employing a Chief AI Officer in the future.
AI and machine learning have the potential to increase global GDP by 14% from now until 2030.
About 28% of people fully trust AI, while 42% claim to generally accept it.
25% of businesses have integrated AI into their operations.
77% of people use a service or device that is AI-powered.
Shoppers order 2.5 items with free shipping, compared to 2 items with paid shipping
Product photos are very influential in the buying decisions of 75% of ecommerce shoppers.
30% of shoppers ranked search engines as the top way they discovered new brands in 2023.
40% of shoppers will pay more for products from a trusted brand
43.1% of internet users visited any brand website each month in 2022.
The probability of an ecommerce brand selling to an existing customer is 60-70%, compared to the probability of selling to a new customer, which hovers around 5-20%
Extra costs at checkout causes 48% of abandoned carts
The world’s biggest ecommerce markets at the end of 2022 are listed below:
China - $1,538 billion
United States - $875 billion
Japan - $241 billion
Germany - $148 billion
UK - $143 billion
South Korea - $118 billion
India - $97 billion
France - $96 billion
Indonesia - $59 billion
Canada - $59 billion
The top 10 countries for 2023 whose percentage of internet users purchase an item online at least once a week, are listed below:
Thailand - 66.8%
South Korea - 65.6%
Turkey - 64.6%
Mexico - 64.5%
Chile - 62.7%
Indonesia - 62.6%
India - 62.3%
UAE - 62.3%
China - 61.9%
Malaysia - 61.3%
Here’s the highest-ranking channels online shoppers picked for brand discovery:
Search engines (30.6%)
Ads on TV (30.2%)
Word-of-mouth recommendations (27.4%)
Ads on social media (26.6%)
Brand and product websites (23.3%)
This is how some of the most popular ecommerce tools rank in terms of the number of websites using them:
WooCommerce - 6.1 million live websites
Shopify - 4.1 million live ecommerce sites use this platform
OpenCart - used by 335,00 live websites
PrestaShop - 264,000 active stores
Adobe Commerce - 148,000 live websites
BigCommerce - 46,885 live websites
Ecommerce has come a long way from its introduction in 1948-49, to transforming the world in 2023. It has faced various ups and downs, from gaining huge prominence during the covid time to normalizing after the post-covid era and the yearly increments are not that significant compared to the 2 years of covid. Its integration with Artificial Intelligence and Big Data has enabled unprecedented growth in the IT industry. Many more powerful technologies are yet to come in the next few years, which will further strengthen the online industry. The mobile integration and omnichannel commerce strategies will continue to increase, as these tools and technologies will shape the future for our generations to come.