How AI is reshaping e-commerce purchasing and personalization
The AI revolution is beginning to touch every aspect of our lives, and e-commerce as an industry is seeing broad innovation as both consumers and retailers adopt new shopping tools.
Those on the purchase end of the transaction are now leveraging AI to find what they’re looking for, while sellers have new ways to improve the shopping experience and boost sales. A report from Fortune Business Insights estimates that the market size for AI in retail and e-commerce will grow globally from $9.4 billion in 2024 to $85.1 billion in 2032, a CAGR of 31.8%.
This past holiday season demonstrates AI’s growing impact on e-commerce. Retail businesses increased spend on AI tools, ranging from virtual showrooms and try-on features to chatbots and phone support. Over Cyber Weekend, retailers that used chatbot tools saw 15% higher purchase conversion rates than those who didn’t. Additionally, searches from chatbots like Open AI’s ChatGPT drove significant traffic to retail sites—up 1,950% from Cyber Weekend 2023—showing an uptick in AI usage among online shoppers.
Now, companies like OpenAI, Amazon, and Visa are doubling down on AI shopping features. Here’s a glimpse at how AI is reshaping e-commerce.
Enhancing customer service with AI chatbots
AI-driven customer support is becoming popular among e-commerce businesses thanks to the automated service it provides. AI chatbots, which deliver 24/7 personalized customer service, can increase sales by 67%.
Verizon recently reported a 40% sales increase after implementing a Google AI customer service bot. Numerous tech companies offer enterprise AI chatbot integrations, including HubSpot, one of the top SaaS vendors on Ramp.
Large retailers are also building their own AI-powered customer service tools. Amazon's AI shopping assistant, Rufus, provides tailored product information and comparisons based on customer queries. As reported by Business Insider, Amazon’s internal forecast projects that Rufus will indirectly contribute $700 million in profits this year alone by aiding customers.
Transforming the shopping experience with virtual try-on technology
Virtual try-on technology utilizes AI and augmented reality to help customers visualize products like makeup, clothing, and eyewear on their bodies from the comfort of their own homes. The global market for virtual try-on technology was valued at $12.5 billion in 2024 and is projected to reach $48.8 billion by 2030, a CAGR of 25.5%.
Leading retailers like Sephora, Warby Parker, L'Oréal, and Nike are embracing AI try-on technology to offer interactive and personalized shopping experiences. In March, Google Shopping also introduced AI tools that let customers virtually try on multiple beauty and fashion products at once. Studies have shown virtual try-on features can increase sales by up to 30% and reduce returns by 20%.
Revolutionizing product discovery with AI search tools and personalization
AI-driven search tools are transforming how consumers discover products online. ChatGPT launched improved shopping features in April, offering personalized recommendations, visual product details, price comparisons, and direct purchase links. ChatGPT doesn’t permit retailers to run paid ads, but it provides tips to retailers on making their products more discoverable. For brands seeking sponsored placement, Perplexity’s competing AI shopping tool offers paid visibility.
Retailers can also implement AI-powered search directly on their website so consumers can use conversational language to generate hyper-personalized results, for example: “Lightweight floral dress for a spring beach wedding.” Meanwhile, emerging AI platforms like Daydream are onboarding thousands of brands into a single searchable catalog.
Visa just announced an AI-powered platform, Visa Intelligent Commerce, that lets users delegate online shopping tasks to AI agents within personalized parameters. Tasks can include ordering groceries, booking vacations, and monitoring product prices. Unlike other chatbots, these agents don’t need constant human input—meaning that the time between product discovery and payment is much shorter for users. By removing friction, Visa’s tool helps lower the rate of abandoned carts and pushes shoppers toward purchasing faster.
As AI continues to evolve, e-commerce retailers will have a major opportunity to further leverage technology to meet consumer demands and drive sales growth—all without additional manpower.
Stay on top of AI trends by following the Ramp AI Index, an ongoing piece of research from the Ramp Economics Lab.