E-commerce and consumer behavior: A review of AI-powered personalization and market trends

Abstract

In the dynamic landscape of electronic commerce (e-commerce), understanding and adapting to evolving consumer behavior is critical for the sustained success of online businesses. This review delves into the intersection of e-commerce and consumer behavior, focusing on the transformative role of Artificial Intelligence (AI)-powered personalization and its impact on market trends. The advent of AI has revolutionized the way e-commerce platforms engage with and cater to individual consumer preferences. AI-powered personalization techniques leverage advanced algorithms to analyze vast datasets, enabling the delivery of highly tailored and relevant content, product recommendations, and user experiences. This review explores the intricate mechanisms of AI-driven personalization, examining how it enhances customer engagement, satisfaction, and loyalty. Furthermore, the study investigates the prominent market trends shaped by AI in e-commerce. From chatbots and virtual assistants facilitating seamless customer interactions to predictive analytics optimizing inventory management, AI is driving innovation across various facets of the online retail landscape. The analysis delves into the integration of machine learning algorithms in predicting consumer preferences, streamlining the purchasing process, and fostering a more personalized shopping journey. As e-commerce continues to evolve, the review also explores the challenges and ethical considerations associated with AI-powered personalization. Issues such as data privacy, algorithmic bias, and the delicate balance between customization and intrusiveness are examined to provide a comprehensive understanding of the broader implications of AI in shaping consumer behavior. Ultimately, this review offers valuable insights into the symbiotic relationship between e-commerce and consumer behavior, shedding light on the transformative power of AI-powered personalization and its influence on emerging market trends. As businesses navigate the digital landscape, understanding and harnessing the potential of AI-driven strategies become imperative for staying competitive and meeting the evolving expectations of tech-savvy consumers.