AI has become the Swiss Army knife of retail tech: an all-in-one tool powering everything from personalization to logistics, marketing, and beyond. By early 2024, businesses started prioritizing AI’s real-world impact over buzzword appeal, focusing on tools that genuinely enhance efficiency and profitability.
As we move into 2025, AI is proving its staying power, with businesses refining their strategies to maximize its value. Instead of chasing trends, retailers are focusing on AI’s practical applications to drive real profitability.
In this article, we’ll share 10 common use cases for leveraging AI to deliver real value to your Amazon or retail business. Let’s dive in.
10 Practical AI Use Cases for Retailers
Natural language processing (NLP). Large language models (LLMs). Generative pre-trained transformers (GPTs). In the beginning, simply understanding AI was the biggest nut to crack.
But that was then. These days, the hardest part is knowing how to execute and where to start to extract real value from AI.
Let’s explore some of the latest ways e-commerce brands are using AI to increase their e-commerce success.
1. Personalized Product Recommendations
Personalized product recommendations are like jet fuel for your e-commerce conversion rates, accounting for nearly a third of e-commerce revenue. And thanks to a growing number of personalization engines and marketplace tools, they’re now accessible to most e-commerce sellers.
For example, Amazon Personalize helps sellers analyze customer browsing history and purchase behavior to offer tailored recommendations. You’ll be able to create personalized shopping prompts tailored to your interests, price limits, and preferences.
Sellers on Shopify and other channels can use predictive solutions like Dynamic Yield and Nosto to predict future buying behavior and adjust recommendations based on shopper intent, visual similarity to past purchases, geotargeting, and more.
2. Chatbots and Virtual Assistants
Many e-commerce companies already use AI-powered chatbots to field and direct customer service queries. These bots can help answer routine questions, determine when to escalate to a human agent, and even offer tailored product recommendations.
Rufus is Amazon’s AI-powered chatbot, or virtual shopping assistant designed to simplify product searching on Amazon. Trained on a wide range of data sources, Rufus makes intelligent recommendations that take specific user needs and context into account.
European e-commerce giant Zalando is another of a handful of marketplaces offering shoppers the chance to chat with an AI-powered shopping assistant. Features like Klarna’s ChatGPT plug-in let shoppers tell a bot the exact specifics of what they need and get a relevant product recommendation, e.g. “belated Hannukah present under $50 for my friend who loves her dog way too much.”
3. Visual Search
While there’s been much talk about conversational AI search on marketplace platforms, visual search remains a game changer. Tools like Google Lens and Pinterest Lens make it easier for shoppers to search for products based on images instead of text.
Depending on your resources and strategy, implementing visual search on your own site may or may not be a goal. But any seller can take advantage of the rising demand for visuals by optimizing your product images for Google, creating ads that align with search results, and analyzing competitor images to ensure yours stand out.
4. Dynamic Pricing
Airlines and hotels have been using dynamic pricing strategies (a.k.a. yield management) for decades, adjusting pricing based on long-term market conditions and shifts in supply and demand. However, in retail, price adjustments need to happen even faster.
AI-powered dynamic pricing assesses numerous variables at once to help retailers set the best prices for attracting customers while protecting profits.
Amazon sellers can take advantage of AI automatic pricing tools, while Walmart sellers can try the platform’s Repricer tool. On Shopify, sellers can choose from a variety of AI dynamic pricing apps that analyze variables like market conditions, competitor prices, and customer behavior to help you set the best price.
5. Fraud Detection
Online payment fraud remains a major challenge for e-commerce sellers. In 2023, US e-commerce businesses lost at least $38 billion to fraud, while false declines cost over $600 billion annually in lost sales.
AI fraud detection tools, like Amazon Fraud Detector and Shopify Protect analyze transaction patterns and assess risk to help prevent fraudulent payments while minimizing false positives that alienate legitimate customers.
6. Marketing Automation
AI-powered marketing solutions can optimize your marketing. For example, it can analyze customer interactions, browsing history, and past purchases to create hyper-personalized marketing campaigns.
Among many tools, Bloomreach’s AI solution, Loomi, Meta’s Advantage+ Shopping Campaigns, and Adobe Sensei can generate personalized emails, SMS messages, and dynamic ads that align with each customer’s behavior and preferences.
7. Social Listening
AI tools aren’t just important for marketing segmentation — they can also help you analyze and interpret social media mentions, helping you stay ahead of any negative online mentions and giving you valuable insight into customer sentiment.
Social listening also enables you to track mentions of competing brands and sellers, making it a powerful competitive intelligence tool. Platforms like Brandwatch, Sprout Social, and Hootsuite Insights analyze social media mentions in real-time, helping businesses track brand sentiment, monitor competitor activity, and gain valuable insights to refine their strategies.
8. Demand Forecasting and Inventory Management
Machine learning is known for its ability to rapidly crunch large amounts of data and extract key patterns from, which can be critical for successfully aligning sales and inventory. AI-powered inventory platforms have algorithms that analyze your historical sales data to help you better predict demand and optimize your inventory levels to avoid over- or understocking.
In some tools, these algorithms can even identify and correct outliers in your sales data, such as viral trends, extreme weather events and more, to avoid inaccuracies due to past unexpected stockouts or sales peaks.
9. Supply Chain Optimization and Visibility
From delivery route planning and improved supplier selection to IoT tools that track shipments and inventory, AI in supplier relationship management can help you source from faster, more affordable, or more sustainable manufacturers.
For omnichannel brands,you can get deeper visibility into your supply chains, increasing on-time shipments and preventing delays before they happen. Some solutions also automate functions like purchase order generation, warehouse management and more.
10. Creative Assistant
Perhaps the most well-known use case for AI is in creative processes, like brainstorming and generating images and text. Retailers can use AI to assist with creating copy, generating customer communication transcripts, creating product images, optimizing their e-commerce websites for search engines, and so much more.
For example, the designers at Nike recruited the help of AI in brainstorming new product ideas based on specific customer needs. For Amazon sellers, tools like A+ Content can help with writing product descriptions and optimizing your product detail pages, but there are endless other tools on the market designed to help you improve your creative processes.
Top Dos and Don’ts for AI Adoption
With so many possibilities for adopting AI, it can be challenging to know where the guardrails are. Here are some basic principles to keep in mind as you get started.
✅ Do: Stay on top of Amazon’s AI advancements
One of the most significant uses for AI in e-commerce is in enabling marketplaces to more efficiently assess third-party sellers. For example, Amazon uses AI to aggregate and summarize customer product reviews, rate sellers, and evaluate seller complaints to determine if they’re legitimate.
Amazon continues to expand its use of AI. Sellers can take advantage of Amazon’s AI to write product listings that lead to better reviews. The key to winning with AI is to proactively assess its risks and maximize its benefits to stay competitive on every sales channel.
Among improvements on the customer end, Amazon is optimizing the customer reviews with generative AI, and the newly introduced Amazon Interests AI further refines personalization.
❌ Don’t: Adopt AI for the wrong reasons
With so many potential AI applications, it’s easy to get distracted. Instead of adopting AI tools simply because they’re trending, focus on solutions with measurable ROI. The wrong investments could cost cash, time, and resources — including staffing and training costs, data acquisition expenses, legal issues, and other hidden risks.
✅ Do: Use AI to save time
From AI-powered chatbots to automated marketing and inventory forecasting, AI should streamline operations, not complicate them.
But be careful not to overdo it. A common practice is to use AI chatbots as “greeters” to get customers oriented and figure out what they need. From there, the aim is to get them to real human support as soon as it’s needed. You can also use AI tools to assist your human agents in generating faster, pre-written responses so that they know exactly what to say when they log on.
❌ Don’t: Blindly outsource to AI
The reality is, AI tools just aren’t sophisticated enough to logic their way through relationship-building and problem-solving the way a human would. They’re prone to offending customers and generating false information that could even get you sued.
AI tools still require human oversight. While AI-generated recommendations can be valuable, they should complement—rather than replace—human decision-making.
✅ Do: Use AI to get inspired
Generative AI can help you brainstorm slogans, captions, hashtags, and other short-form copy, as well as re-write or customize existing content in different voices for different audiences. It can help with image generation and ideation for original content. Some AI tools, like MarketMuse, can study your competitors’ content for gaps and help you develop stronger marketing campaigns, all of which can lead to better ROI.
❌ Don’t: Forget that you’re in control
Without smart, creative humans at the helm, you could put your brand at risk of using plagiarized content, deceiving and manipulating your customers, or simply boring them senseless.
Instead of replacing your brilliant team members with lines of flawed code, invest in tools that automate their most tedious or overwhelming tasks, and help them perform at their best.
Get Real Results from Artificial Intelligence
With the right approach, AI can be a powerful tool to increase sales and boost operational efficiency. But as with any tool, you’re only going to get what you put in.
With clear expectations and a well-planned roadmap for success, you can get more out of your investment in AI and start using it to deliver real value to your customers and business.
For more on the future of retail, check out our growing resources hub. Looking for hands-on help? Explore our full suite of financial solutions to see how we can support your growth journey.
