ST ALOYSIUS COLLEGE (AUTONOMOUS),

MANGALURU
Project Report on the topic titled
“EFFECTS OF AI IN THE FIELD OF COMMERCE”

Submitted to St Aloysius College (Autonomous), Mangaluru as a part of Continuous Internal

Assessment

BY

1. Anjali Joan D’Silva– 213271- III B.Com B

2. Sahana MY– 213278 – III B.Com B

3. Sasha D’Souza – 213279 – III B.Com B

4. Sherien Maben – 213280– III B.Com B

Under the guidance of

DR. MANUEL TAURO

FACULTY OF COMMERCE

ST ALOYSIUS COLLEGE (AUTONOMOUS), MANGALURU

[APRIL 2024]

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 FACULTY OF COMMERCE

ST ALOYSIUS COLLEGE (AUTONOMOUS)

LIGHT HOUSE HILL ROAD, MANGALURU-575003

CERTIFICATE

This is to certify that MS ANJALI JOAN D’SILVA, Register Number: 213271, MS SAHANA MY,
Register Number: 213278, MS SASHA DIYA D’SOUZA, Register Number: 213279, MS SHERIEN
MABEN, Register Number: 213280, have successfully completed the project work on the topic titled
“EFFECTS OF AI IN THE FIELD OF COMMERCE” under my guidance. This Project Report is
submitted to St Aloysius College (Autonomous), Mangalore as a part of continuous assessment.

DR. MANUEL TAURO

(Project Guide)
Date:

Place: Mangaluru

Signature with name and Designation

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 DECLARATION

We hereby declare that the Project Report titled “EFFECTS OF AI IN THE FIELD OF
COMMERCE” submitted by us, to Department of Commerce, St Aloysius College (Autonomous)
Mangaluru, as a part of continuous internal assessment, is our original work and done under the
guidance of DR. MANUEL TAURO Further, we declare that it has not been submitted for the award
of any other degree, diploma, fellowship or any other similar title or prizes.

Date: Signature

Place: Mangaluru 1. ANJALI JOAN D’SILVA- 213271

2. SAHANA MY - 213278

3. SASHA DIYA D’SOUZA– 213279

4. SHERIEN MABEN– 213280

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 CONTENTS

CH.NO. TITLE PAGE NO.

1 INTRODUCTION 6–8

2 LITERATURE REVIEW 9 - 12

3 DATA ANALYSIS AND 13 – 21

INTERPRETATION

4 FINDINGS AND SUGGESTIONS 22 - 24

5 CONCLUSION 25

6 ANNEXURE 26 - 28

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 LIST OF TABLES

SL NO. DESCRIPTION PAGE NO.

1 Age of respondents. 13

2 Familiarity of respondents with AI 14

technology.
3 Areas they believe AI has impacted in 14
commerce.
4 AI technologies respondents have come 15
across.
5 Main benefits they percieve AI brings to 15
the commerce sector.
6 Concerns or challenges do you associate 16
with the integration of AI in commerce.
7 How respondents think AI has influenced 16
consumer behavior and preferences.
8 AI has improved or disrupted traditional 17
commerce practices.
9 Observed any changes in job roles or skill 17
requirements within the commerce sector
due to AI adoption.
10 Job roles or skills that has been affected 18
the most.
11 How important do respondents think it is 18
for businesses to invest in AI technologies
to stay competitive in the commerce
landscape.
12 Predictions of the respondents for the 19
future of AI in commerce.
13 AI will continue to evolve in the 19
commerce sector.
14 How likely are respondents to recommend 20
AI adoption to other businesses in the
commerce sector.
15 Key factors that determine the successful 21
implementation of AI in commerce.

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EFFECTS OF AI IN THE FIELD OF
COMMERCE

INTRODUCTION
Artificial Intelligence (AI) has emerged as a disruptive force reshaping
numerous industries, and commerce is no exception. In recent years, AI
technologies have revolutionized the way businesses operate, market, and sell
their products or services. This essay delves into the multifaceted effects of AI
on commerce, exploring its implications on various aspects such as customer
experience, marketing, supply chain management, and beyond.
 Enhanced Customer Experience: AI-powered chatbots and virtual
assistants have redefined customer service in commerce. These
intelligent systems provide personalized assistance round the clock,
addressing customer queries, offering product recommendations, and
facilitating seamless transactions. By leveraging natural language
processing (NLP) and machine learning algorithms, businesses can
deliver prompt and accurate responses, thereby improving customer
satisfaction and loyalty.
 Data-driven Decision Making: AI enables businesses to harness vast
volumes of data for actionable insights. Through advanced analytics and
predictive modeling, companies can gain deeper understanding of
consumer behavior, market trends, and competitor strategies. This data-
driven approach empowers organizations to make informed decisions
regarding pricing, inventory management, and product development,
optimizing resource allocation and maximizing profitability.
 Personalized Marketing: One of the most significant impacts of AI in
commerce is its ability to personalize marketing efforts. AI algorithms
analyze customer preferences, purchase history, and browsing patterns to
tailor targeted advertisements and promotional offers. By delivering
relevant content to individual consumers, businesses can increase
engagement, conversion rates, and ultimately, revenue. Moreover, AI
facilitates dynamic pricing strategies, adjusting prices in real-time based
on demand fluctuations and competitive dynamics.

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 Supply Chain Optimization: AI technologies optimize supply chain
operations by enhancing efficiency and agility. Through predictive
analytics and demand forecasting, businesses can anticipate fluctuations
in demand, optimize inventory levels, and minimize stockouts or
overstocks. AI-powered logistics management streamlines transportation
routes, reduces delivery times, and lowers transportation costs.
Furthermore, AI enables predictive maintenance of equipment and
machinery, reducing downtime and enhancing productivity.
 E-commerce Personalization: In the realm of e-commerce, AI-driven
personalization has become instrumental in driving sales and fostering
customer loyalty. Recommendation engines analyze user behavior and
preferences to deliver personalized product recommendations, thereby
enhancing the shopping experience and increasing conversion rates. AI
also facilitates dynamic website content optimization, presenting tailored
product listings, promotions, and pricing based on individual customer
profiles.
 Fraud Detection and Security: AI-powered fraud detection systems
leverage machine learning algorithms to identify suspicious activities
and prevent fraudulent transactions in real-time. By analyzing vast
datasets and detecting patterns indicative of fraudulent behavior, these
systems help safeguard businesses and consumers from financial losses
and reputational damage. Additionally, AI enhances cybersecurity
measures by detecting and mitigating potential threats, such as malware,
phishing attacks, and data breaches, thereby safeguarding sensitive
customer information and preserving trust.
 Ethical and Regulatory Considerations: While AI offers numerous
benefits to the commerce industry, it also raises important ethical and
regulatory considerations. Issues such as data privacy, algorithmic bias,
and transparency in AI decision-making require careful attention to
ensure that AI technologies are deployed responsibly and ethically.
Moreover, regulations governing data protection, consumer rights, and
algorithmic accountability continue to evolve, necessitating ongoing
compliance efforts and ethical frameworks to guide AI development and
deployment.
Conclusion: In conclusion, the transformative impact of AI on
commerce is profound and multifaceted, revolutionizing every aspect of
the industry from customer experience and marketing to supply chain
management and security. As AI technologies continue to advance,

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businesses must embrace innovation while addressing ethical, regulatory,
and societal concerns to harness the full potential of AI in driving
growth, competitiveness, and sustainability in the commerce landscape.
By leveraging AI strategically and responsibly, businesses can unlock
new opportunities, enhance operational efficiency, and deliver value to
customers in the rapidly evolving digital economy.

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RESEARCH METHODOLOGY

Objectives:
AI can help businesses understand online shoppers better and what spurs them
to take action. This will also help shape how that business engages existing
customers moving forward.

 Customer support and customer satisfaction are common areas where

AI is helping online retailers and improving the user experience.
 Marketers use AI to increse client demand. Customers have a positive
user experience through integrated applications that employ machine
intelligence.

 It keeps track of purchases, including where and when they are made.
 It can analyse the data and provide customised marketing messages to
customers.

Research design
This research on artificial intelligence (AI) in e-commerce and proposes
guidelines on how information systems (IS) research could contribute to this
research stream. To this end, the innovative approach of combining bibliometric
analysis with an extensive literature review was used. Bibliometric data from
4335 documents were analysed, and 229 articles published in leading IS
journals were reviewed. The bibliometric analysis revealed that research on AI
in e-commerce focuses primarily on recommender systems. Sentiment analysis,
trust, personalisation, and optimisation were identified as the core research
themes. It also places China-based institutions as leaders in this researcher area.
Also, most research papers on AI in e-commerce were published in computer
science, AI, business, and management outlets.
The literature review reveals the main research topics, styles and themes that
have been of interest to IS scholars. Proposals for future research are made
based on these findings. This paper presents the first study that attempts to
synthesise research on AI in e-commerce. For researchers, it contributes ideas to
the way forward in this research area. To practitioners, it provides an organised
source of information on how AI can support their e-commerce endeavours.
Inventory management and demand forecasting: AI algorithms can analyze
historical sales data, market trends, and external factors to optimize inventory
management. They can predict demand, identify popular products, and suggest
optimal stock levels, reducing costs associated with overstocking or stockouts.

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LITERATURE REVIEW
Literature review on “Analyzing the effects of AI in commerce”, recent
literature highlights significant advancements. Studies emphasize improved
efficiency through automated processes, enhanced customer experiences via
personalized recommendations, and increased decision-making accuracy.
However, concerns about job displacement, ethical considerations, and potential
biases in AI algorithms also feature prominently. Scholars underscore the need
for balanced regulation to harness AI’s benefits while mitigating risks, urging
ongoing research to guide responsible integration in the dynamic landscape of
commercial enterprises.

Groundwork for AI:

 1921: Czech playwright Karel Čapek released a science fiction play

“Rossum’s Universal Robots” which introduced the idea of “artificial
people” which he named robots. This was the first known use of the
word.
 1929: Japanese professor Makoto Nishimura built the first Japanese
robot, named Gakutensoku.
 1949: Computer scientist Edmund Callis Berkley published the book
“Giant Brains, or Machines that Think” which compared the newer
models of computers to human brains.

1. Song et al: To analyse the present situation of the application of

artificial intelligence technology in the field of e-commerce. Artificial
intelligence in e-commerce. Artificial intelligence will become an
important driving force for the transformation of e-commerce.

2. Zhang et al: To explain how artificial intelligence technology, people,

and processes should be managed to successfully create value.
Artificial intelligence in e-commerce. The key artificial intelligence
capabilities generated include forecasting, planning, and learning.
They are not independent—they interact and coevolve with human
capabilities to create business value.

3. Soni: To analyse the use of artificial intelligence in e-commerce

business Artificial intelligence in e-commerce. Artificial intelligence

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 can help people excel in their high sales and customer relationships in
the e-commerce business.

4. Kar and Haldar: To analyse specific integration of chatbots in the

IoT systems. Applying chatbots to the Internet of Things. Chatbots can
help consumers find products, check order status, compare products,
and connect them to the customer support service staff.

5. Kumar and Trakru: To present impact of artificial intelligence in e-

commerce. Artificial intelligence in e-commerce Integration of
artificial intelligence in e-commerce companies can help create
sophisticated solutions and will impact transactions, customer
retention, satisfaction, and efficiency.

6. Pallathadka et al: To discuss machine learning and artificial

intelligence applications in e-commerce, corporate management, and
finance Artificial intelligence in business management, e-commerce,
and finance. The most common applications include sales growth,
profit maximization, sales forecasting, inventory management,
security, fraud detection, and portfolio management.

7. Shankar: To present a frame work for understanding artificial

intelligence, outline applications of it in different facets of retailing,
and discuss the future of artificial intelligence in retailing. Artificial
intelligence in retailing. Artificial intelligence will enable retailers
better understand consumer psychology by getting them closer to what
the human brain is thinking at any given moment.

8. Makridakis: To present changes caused by artificial intelligence,

contrasts with the industrial revolution, the impact on developed and
developing countries, and the dominant firm sin artificial intelligence.
The potential effects of artificial intelligence on businesses,
manufacturing, and commerce Relationship between artificial
intelligence and humans will strengthen; companies will focus on
creating values through collaboration between the human work force
and artificial intelligence tools.

9. Luo et al: To study the impact of artificial intelligence chatbot

disclosure on customer purchases Impact of artificial intelligence on
customer purchases Prior experience with AI induces more customer
purchases and is helpful in reducing the negative disclosure effect.

10. Loureiro et al: To provide an over view of state-of-the-art research on

artificial intelligence in the business context and propose an agenda

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for future research. Artificial intelligence in business. Future trends in
artificial intelligence are the development of advanced automated
systems, integration of neurostimulators, and nanochips into the brain,
smart devices connected to artificial intelligence systems.

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 DATA ANALYSIS AND INTERPRETATION

The purpose of the survey was to research about the effects of AI in the field of
Commerce . The respondents answered the questionnaire through google forms,
where in the questionnaire was sent through social platforms such as Whatsapp,
Instagram and Facebook.

The responses to the questionnaire are as follows:

1. Age of respondents.

INTERPRETATION: From the data presented, 78.9% of the respondents are of

the age group 18-20, 17.5% of the respondents are of the age group 21-25 and
around 1.8% of the respondents are of the age group 26-30 and 31 and above.

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2. How familiar are you with artificial intelligence (AI) technology?

INTERPRETATION: From the data presented, 31.6% of the respondents

are very familiar of artificial intelligence, 66.7% of the respondents are
somewhat familiar and remaining 1.8% are not familiar at all.

3. Which of the following areas do you believe AI has impacted in commerce?

INTERPRETATION: From the data presented, 42.1% believe AI has impacted

marketing and advertising area, 31.6% in customer service, 22.8% in fraud
detection and prevention and remaining in sales forecasting.

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4. Which AI technologies have you come across?

INTERPRETATION: From the data presented, 12.3% of the respondents have

come across natural language processing, 59.6% of the respondents have come
across chatbots, 17.5% of the respondents have come across image recognition
and the rest 10.5% have come across other AI technologies.

5.What are the main benefits you perceive AI brings to the commerce
sector?

INTERPRETATION: From the data presented, 42.1% of the respondents chose

improved efficiency, 15.8% of the respondents chose cost reduction, 28.1% of
the respondents chose better decision making and 14% of the respondents chose
competitive advantage.

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6.What concerns or challenges do you associate with the integration of AI in
commerce?

INTERPRETATION: From the data presented, 31.6% of the respondents chose

job displacement, 31.6% of the respondents chose privacy concerns, 29.8% of
the respondentschose security risks and the rest 7% chose lack of transparency.

7. How do you think AI has influenced consumer behavior and preferences?

INTERPRETATION: From the data presented, 26.3% of the respondents chose

increased reliance on online shopping, 40.4% of the respondents chose
expectation of personalised experiences, 19.3% of the respondents chose greater
trust in AI powered recommendations and 14% of the respondents chose
concerns about data privacy.

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8.Do you believe AI has improved or disrupted traditional commerce
practices?

INTERPRETATION: From the data presented,21.1% of the respondents chose

improved, 10.5% of the respondents chose disrupted, 64.9% the rest of the
respondents chose both and the rest chose neither.

9. Have you observed any changes in job roles or skill requirements within the
commerce sector due to AI adoption?

INTERPRETATION: From the data presented, 89.5% of the respondents opted

for yes and 10.5% of the respondents opted no .

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10. If yes, which job roles or skills have been affected the most?

INTERPRETATION: From the data presented, 38.6% of the respondents think

data analysis has been affected the most, 28.1% of the respondents chose
customer service, 15.8% of the respondents chose sales and 17.5% of the
respondents chose marketing.

11.How important do you think it is for businesses to invest in AI

technologies to stay competitive in the commerce landscape?

INTERPRETATION: From the data presented, 33.3% of the respondents chose

very important, 59.6% of the respondents chose somewhat important, 5.3% of
the respondents chose not very important and the remaining respondents chose
not important at all.

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12.What are your predictions for the future of AI in commerce?

INTERPRETATION: From the data presented, 26.3% of the respondents chose

AI will become indispensable in all commerce related activities, 28.1% of the
respondents chose AI adoption will plateau and stabilise and 45.6% of the
respondents chose AI advancements will lead to new ethical and regulatory
challenges.

13. How do you think AI will continue to evolve in the commerce sector?

INTERPRETATION: From the data presented, 42.1% of the respondents chose

more advanced personalization and recommendation system, 28.1% of the
respondents chose enhanced fraud detection capabilities, 21.1% of the

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respondents chose greater automation of routine tasks and the rest chose
intergration with emerging technologies like blockchain and loT.

14. How likely are you to recommend AI adoption to other businesses in the
commerce sector?

INTERPRETATION- From the data presented, 28.1% of the respondents chose

very likely, 57.9% of the respondents chose somewhat likely, 10.5% of the
respondents chose not very likely and the rest of the respondents chose not
likely at all.

15. In your opinion, what are the key factors that determine the successful
implementation of AI in commerce?

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INTERPRETATION: From the data presented, 38.6% of the respondents
definitely recommend, 35% of the respondents are neutral, 48.3% of the
respondents likely recommend and the rest of the respondents are unlikely to
recommend and definitely do not recommend their mutual fund house
experience.

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FINDINGS & SUGGESTIONS
FINDINGS:

 In the study made it is observed that majority of the respondents were

from the age group of 18-20.
 The study shows that most of the respondents are familiar with (AI)
artificial intelligence technology.
 The study reveals that AI has highly impacted areas like Marketing and
Advertising.
 It was found that more than half of the AI technologies have come across
Chatbots.
 From the data presented, it is clear that 42.1% of the respondents feel that
AI has improved efficiency in commerce sector.
 It is clear from the data presented that privacy concern and job
displacement are challenges associated with integration of AI in
commerce.
 In the study made it is observed that expectations of personalised
experience has influenced consumer behaviour and preference.
 It is found that more than half of the respondents feel AI has improved as
well as disrupted traditional commerce practices.
 It’s is clear from the data presented that 89.5% of the respondents
observed any changes in job roles or skill requirements within the
commerce sector due to AI adoption.
 In the study made, 38.6% respondents observe that job roles or skills like
data analysis have been affected the most.
 In the study made it is clear 59.6% of the respondents think it is very
important for businesses to invest in AI technologies to stay competitive
in the commerce landscape.
 It is observed that 45.6% of the respondents predict that AI advancements
will lead to new ethical and regulatory challenges.
 It is clear that AI will continue to be more advanced personalization and
recommendation system.
 In the study made, more than half of the respondents are likely to
recommend AI adoption to other businesses in the commerce sector.

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SUGGESTIONS:

The findings indicate a widespread recognition of AI's influence, particularly in

areas such as marketing, job roles, and consumer behavior. However, concerns
regarding privacy, job displacement, and ethical implications emerge as
significant challenges. Here are some suggestions:

Recognize the demographic trends: Given that the majority of respondents

were aged 18-20, it's crucial to tailor AI strategies and communication
channels to cater to this age group's preferences and behaviors.

Leverage familiarity with AI: With most respondents being familiar with
AI technology, businesses can explore advanced AI solutions in
marketing and advertising to enhance customer engagement and brand
visibility.
Focus on AI's impact on marketing and advertising: Since AI has
significantly impacted these areas, businesses should invest in AI-
powered tools and platforms to optimize marketing campaigns,
personalize content, and target specific consumer segments effectively.

Embrace chatbot technology: With more than half of AI technologies

encountered being chatbots, businesses should integrate conversational AI
into customer service processes to improve efficiency, reduce response
times, and enhance user experiences.

Highlight efficiency improvements: Given that 42.1% of respondents

acknowledge AI's role in improving efficiency in the commerce sector,
businesses should emphasize the operational benefits of AI adoption, such
as streamlined processes and cost savings.

Address privacy concerns and job displacement: Recognize that privacy

concerns and job displacement are significant challenges associated with
AI integration. Implement robust data protection measures and invest in
reskilling and upskilling programs to mitigate these concerns.

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Prioritize personalized experiences: Since expectations of personalized
experiences influence consumer behavior and preferences, businesses
should leverage AI to deliver tailored recommendations, customized
offerings, and seamless shopping experiences.

Prepare for disruption: Acknowledge that AI has both improved and

disrupted traditional commerce practices. Embrace innovation and agility
to adapt to changing market dynamics and stay ahead of competitors.

Adapt to evolving job roles and skill requirements: With 89.5% of

respondents noting changes in job roles or skill requirements due to AI
adoption, invest in training programs to equip employees with the
necessary skills for AI-driven roles, such as data analysis and
interpretation.

Address the importance of AI investment: Recognize the consensus

among respondents (59.6%) that investing in AI technologies is essential
for businesses to remain competitive in the commerce landscape. Allocate
resources strategically to implement AI solutions that align with business
objectives and drive sustainable growth.

Anticipate ethical and regulatory challenges: Given that 45.6% of

respondents predict new ethical and regulatory challenges with AI
advancements, stay informed about.

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 CONCLUSION

The impact of AI on commerce is profound and multifaceted. From revolutionizing

customer service to optimizing supply chains, AI technologies are reshaping the way
businesses operate and interact with their customers. However, these advancements also
come with challenges and ethical considerations. While AI can enhance productivity
and efficiency, it also raises concerns about job displacement and data privacy.
In conclusion, the effects of AI in the field of commerce are transformative, offering
unprecedented opportunities for growth and innovation. However, to fully realize the
potential benefits of AI while mitigating its risks, businesses must prioritize responsible
and ethical AI deployment, invest in workforce training and reskilling, and foster
collaboration between policymakers, industry leaders, and researchers to ensure that AI
is harnessed for the greater good of society.
AI's impact on commerce is undeniable, fundamentally altering business operations and
customer experiences. Enhanced data analytics empower businesses to understand
consumer behavior better, tailor marketing strategies, and forecast demand accurately.
Automation streamlines processes, cutting costs and improving efficiency. Yet,
concerns persist regarding job displacement and ethical dilemmas like biased
algorithms and data privacy breaches. However, embracing AI responsibly presents
opportunities for sustainable growth and innovation. By fostering a culture of
transparency, accountability, and inclusivity, businesses can navigate these challenges
while maximizing the benefits of AI. Collaboration between industry, policymakers,
and stakeholders is essential to ensure AI's integration aligns with societal values and
promotes equitable economic development. Ultimately, the future of commerce with AI
hinges on ethical considerations, responsible implementation, and collective efforts to
harness its potential for the betterment of all.

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 ANNEXURE

QUESTIONNAIRE

1. Age of respondents
a) 18-20
b) 21-25
c) 26-30
d) 31 and above

2. How familiar are you with artificial intelligence (AI) technology?

a) Very familiar
b) Somewhat familiar
c) Not familiar at all

3. Which of the following areas do you believe AI has impacted in commerce?

a) Marketing and advertising
b) Customer service
c) Sales forecasting
d) Fraud detection and prevention

4. Which AI technologies have you come across?

a) Natural language processing
b) Chatbots
c) Image recognition
d) Other

5. What are the main benefits you perceive AI brings to the commerce sector?
a) Improved efficiency
b) Cost reduction
c) Better decision making

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 d) Competitive advantage

6. What concerns or challenges do you associate with the integration of AI in

commerce?
a) Job displacement
b) Privacy concerns
c) Security risks
d) Lack of transparency

7. How do you think AI has influenced consumer behavior and preferences?

a) Increased reliance on online shopping
b) Expectation of personalised experiences
c) Greater trust in AI powered recommendations
d) Concerns about data privacy

8. Do you believe AI has improved or disrupted traditional commerce practices?

a) Improved
b) Disrupted
c) Both
d) Neither

9. Have you observed any changes in job roles or skill requirements within the
commerce sector due to AI adoption?
a) Yes
b) No

10. If yes, which job roles or skills have been affected the most?
a) Data analysis
b) Customer service
c) Sales
d) Marketing

11. How important do you think it is for businesses to invest in AI technologies

to stay competitive in the commerce landscape?
a) Very important

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 b) Somewhat important
c) Not very important
d) Not important at all

12. What are your predictions for the future of AI in commerce?

a) Al will become indispensable in all commerce related activities
b) AI adoption will plateau and stabilise
c) AI advancements will lead to new ethical and regulatory challenges

13. How do you think AI will continue to evolve in the commerce sector?
a) More advanced personalization and recommendation system
b) Enhanced fraud detection capabilities
c) Greater automation of routine tasks
d) Integration with emerging technologies like blockchain and IoT

14. How likely are you to recommend AI adoption to other businesses in the
commerce sector?
a) Very likely
b) Somewhat likely
c) Not very likely
d) Not likely at all

15. In your opinion, what are the key factors that determine the successful
implementation of AI in commerce?
a) Access to quality data
b) Skilled workforce
c) Clear business objectives
d) Adequate investment in technology infrastructure

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