25 Feb 2023

How AI Can Improve Conversion Rates in e-commerce

How AI Can Improve Conversion Rates in e-commerce

Artificial intelligence (AI) has been changing the way eCommerce works for many years. It provides the right foundation for learning technologies and algorithms, such as machine learning, sentiment analysis, predictive analysis, and more to help eCommerce businesses understand their audience, generate more leads, reduce operational costs, and more.

In fact, 51% of eCommerce businesses are already employing AI for smooth operations and enhanced customer experiences.

Did you know that the market size for AI is expected to increase at a CAGR of 40.2% from 2021 to 2028? This includes the contribution of AI to the eCommerce industry as well.

Right from leveraging chatbots to respond to customer queries to generating detailed product descriptions, from simplifying business operations to providing after-sales support, AI plays a crucial role in enhancing eCommerce sales processes and boosting conversions.

In this post, we shall explore various ways how AI is transforming eCommerce and boosting your conversion rates.

Understanding Conversion Rates in e-commerce

Understanding Conversion Rates in e-commerce

Before we proceed further, let us understand what conversion rates are and why they are important for eCommerce businesses.

Ecommerce conversion rate is defined as the number of visitors who come to your online store and make a purchase in a specific time duration. It is calculated as follows -

Ecommerce Conversion Rate = Number of successful orders / Number of website visits * 100

For example, if you receive 1000 visits to your online store for two days and you receive 75 orders in these two days, then your conversion rate would be 75/1000 * 100 = 7.5%.

Monitoring the purchases of products or services is not the only factor for measuring conversion rates. You can track conversion rates for smaller activities, such as -

  • Signing up for an account
  • Adding products to wishlist
  • Adding products to cart
  • Visiting a promotional landing page
  • Registering for WhatsApp alerts

Conversion rate is an important metric for your eCommerce store. It helps you understand how well your business is performing by gauging what you are doing right and identifying the areas of improvement. For example, you can identify the channels that are most effective for promoting your BFCM sales.

Further, you can leverage conversion rates to set ROI expectations when planning and scaling your marketing campaigns. You can compare your existing in-house figures with that of industry benchmarks and set new goals for your advertising campaigns.

Note that the baseline conversion rate goal for eCommerce businesses must be above 2%.

That being said, let us now learn how AI can help eCommerce businesses to improve their conversion rates.

4 Ways How AI Can Improve Conversion Rates in ecommerce

4 Ways How AI Can Improve Conversion Rates in ecommerce

Did you know that over 69% of customers would abandon an eCommerce website if they cannot find what they are looking for? In the current times of impulsive purchases, the customers wish to find their desired products at a click of a button. The more a customer has to wait for finding a product, the less interested they get in the product and are not likely to purchase it.

Hence, boosting your website search with AI-powered engines, such as Sparq.ai is crucial for showcasing the most relevant results to the customers based on their search terms. Sparq's intelligent search engine leverages AI and machine learning algorithms to dynamically display the exact products to the customers in milliseconds. By ensuring seamless search experiences and product discoverability, you encourage your customers to make faster purchasing decisions and boost your conversion rates.

2. Personalized Buying Experiences

Delivering stellar customer experiences has become pivotal for eCommerce businesses as it directly impacts the eCommerce conversion rate. In fact, 89% of customers are more likely to purchase from a brand after positive customer experiences. The happier the customers are, the more orders you will receive.

Personalization plays a major role in crafting excellent experiences that encourage customer engagement, increase brand recognition, and promote loyalty. It empowers you to treat your customers like a VIP and makes them feel special.

Here are a few tips to create a winning eCommerce personalization strategy.

  • Create personalized landing pages by showcasing content based on your customers' preferences. For example, displaying a list of recently viewed items or similar items section on your eCommerce website.
  • Share smart product recommendations to the customers based on their buying behavior, product search history, wishlisted items and more via targeted messaging.
  • Leverage upselling and cross-selling sales techniques to increase product awareness among your customers which may later on lead to sales.
  • Offer customized discounts and promotional deals to customers to encourage them into placing more orders.

3. Chatbots


With conversational commerce becoming one of the preferred tools for delivering enhanced shopping experiences, many eCommerce businesses are using AI-powered chatbots to engage with their customers and provide excellent customer support. More than 50% of customers expect businesses to respond to their queries 24/7 without any delay. Hence, configuring chatbots is essential because it provides fast, cost-effective, and reliable customer support.

No wonder, the global chatbot market is growing at a CAGR of 19.29% and is projected to be worth over $4.9 billion by 2032.

Configure chatbots on your eCommerce website to answer questions about your products, customers' orders, shipping information, and more. Besides your eCommerce website, you can configure chatbots on other messaging platforms, such as WhatsApp, Facebook Messenger, Instagram, and more to offer customers personalized services.

Chatbots help you keep your customers engaged across all the stages of their journey with your business. 68% of customers prefer chatbots over human agents because they provide quick answers. By helping the customers navigate through their shopping, chatbots assist them in their buying process and encourage them to place their orders.

4. Predictive Analytics

Predictive Analytics

Predictive analytics and forecasting is another important development in AI that helps eCommerce businesses streamline their operations. It is being extensively leveraged by multiple departments, such as inventory and warehousing, logistics, marketing, sales, finance, and more to estimate the demands for the products in the market.

By leveraging the capabilities of AI and machine learning, a predictive forecasting engine analyzes the patterns in crucial business data to predict outcomes or events which helps you prepare your business for the future. It offers you intelligent insights for taking proactive actions and ensuring the success of your eCommerce business.

Here are a few ways how you can boost your conversions using predictive analytics.

  • Gain deeper insights into your customers' habits and preferences. This will help you deliver highly personalized experiences to them.
  • Enhance your business' pricing model by being constantly vigilant about the industry pricing trends and determining optimal pricing to maximize conversions.
  • Stock your inventory ahead of time by leveraging the predictions done by the predictive forecasting engine. Manage your inventory better by identifying the top-selling products and the not-so-popular ones.
  • Optimize your supply chain management efforts by forecasting the demand and supply of the products to avoid situations, such as product stockouts, reduced buffer stock, logistic bottlenecks, and more.


The future potential of AI in e-commerce is immense. AI can help businesses personalize their offerings, improve customer experiences, and optimize operations, leading to increased sales and profitability. Identify the potential AI has in transforming your eCommerce business and launch your strategy to include it in your day-to-day business operations. Ready to skyrocket your conversions and boost your sales with AI?

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