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Impact of Artificial Intelligence on Online Buying Behaviour in E-Commerce

Conference Paper · January 2024

DOI: 10.1109/ICACCTech61146.2023.00085

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 2023 International Conference on Advanced Computing & Communication Technologies (ICACCTech)

IMPACT OF ARTIFICIAL INTELLIGENCE

ON ONLINE BUYING BEHAVIOUR IN
E-COMMERCE
Dr. Rohit Bansal Tamanna Bansal
Associate Professor, Research Scholar,
Department of Management Studies, Department of Management,
Vaish College of Engineering, MDU-CPAS, Maharshi Dayanand
Maharshi Dayanand University, University,
Rohtak, India Rohtak, India,
rohitbansal.mba@gmail.com tamannabansal131@gmail.com

Abstract— Online buying behavior has undergone
substantial shifts as a result of e-commerce, which has
transformed the way consumers shop. Online buying is a
common option for people looking to buy products and services
while relaxing in their homes because of how simple it is. E-
commerce as a result has a significant impact on how people
shop online. E-commerce impacts online purchasing
behavior in a variety of ways, including the availability of
information, convenience, affordability, and usability. E-
commerce has consequently become a well-liked option for
customers looking to make purchases online. However, the
development of AI (Artificial Intelligence) in the e-commerce
sector has had a big impact on consumers' online purchasing
habits. With the aid of its tools, artificial intelligence analyses
massive amounts of data, enhances search results, personalizes
recommendations, and makes voice and visual search possible.
As AI develops and becomes more sophisticated, it will have a
bigger impact on how consumers behave when making
purchases online. As a result, the current study proposed to
investigate the impact of AI on buying behavior in the e-
commerce sector. The study examines both the positive and
negative effects of AI on consumers' online purchasing
decisions. The study is conceptual in nature and collects data
from secondary sources, such as books, reports, websites,
newspapers, journals, and theses. Research practitioners and
industries will benefit from the practical implications of
current research.
Keywords—E-commerce, online buying, AI (Artificial
Intelligence), Online buying behavior, consumer behavior.
[3]. "Artificial Intelligence (AI) is the study and
advancement of machines that are capable of carrying out
operations that typically require cognitive abilities, such as
recognizing sights and sounds, making decisions, and
language translation," referring to the Oxford Dictionary.[4].
Artificial Intelligence changes the scenario of the whole e-
commerce sector by offering new opportunities to
entrepreneurs. The AI (Artificial intelligence) market in
marketing was reported as 15.84 billion dollars in 2021.
subsequently is anticipated that the overall market value will
have surpassed 107.5 billion by 2028.[5]. As a result, AI
has emerged as the most prominent trend in a variety of
fields, including marketing[6]. AI plays an incredible role
in shaping online buying behavior. Online buying behavior
includes product search and evaluation, selection of a seller
or e-commerce platform, use of online payment systems,
and post-purchase evaluation of the product or service.[7]
Personal preferences, product features, pricing, promotions,
brand reputation, and online reviews all influence online
purchasing behavior.[8] It is also influenced by the user
experience and ease of navigation on the e-commerce
platform, as well as the security and dependability of online
payment systems.[9]
Figure 1: Market for Artificial Intelligence in Marketing
Source: [5]

I. INTRODUCTION
In today's business world, it is undeniable that artificial
intelligence (AI) has a profound influence on every business
organization [1]. Additionally, artificial intelligence is being
adopted to fully anticipate customer behavior in order to
restore business processes by removing unnecessary tasks
[2]. Before the revolution of artificial Intelligence, e-
commerce or electronic commerce made an opportunity for
entrepreneurs and small businesses to deal its business
transactions in online mode and to reach a wider audience at
the same time. E-commerce provides numerous benefits
such as convenience, price comparability, ease of use, a Consequently, advertisers may employ machine learning to
wide variety of products, and many more, all of which analyze enormous quantities of data, conduct personalized
influence online purchasing behavior. sales, and meet customer specifications [10]. Artificial
As technology advances, it provides blockchain, cloud intelligence enables businesses to gain a quick and accurate
computing, and AI (Artificial Intelligence), which broadens understanding of their customer’s needs, increasing sales
the scope of development for entrepreneurs in e-commerce and revenues [11]. With the use of these AI technologies,

979-8-3503-8088-0/23/$31.00 ©2023 IEEE 485

DOI 10.1109/ICACCTech61146.2023.00085
businesses can easily forecast consumer buying behavior.
With the integration of numerous new and cutting-edge
technologies, like big data, the concept of AI tools and what
they entail in and of themselves are still evolving [12]. A
developing state of research is being done on multiple facets
of AI tools, with an emphasis on the design of AI tools,
covering everything from gathering user requirements [13]
to technical issues [14] in a range of contexts. Artificial
Intelligence technologies include audio processing,
computer vision, machine learning, expert system, natural
language processing, and other technologies as represented
in Figure 2.
Figure 2: Artificial Intelligence and its Technologies.
Source:[15]
So there are various AI technologies used by marketers to
have favourable online buying behavior. Some of the
technologies are:
1. Voice Processing technologies: It is the machine
learning technology where the software evaluates and
decodes the voice or spoken language. Example:
Customers can shop hands-free by using voice
commands with virtual assistants such as Google
Assistant, Amazon Alexa, and Siri.
2. Virtual try on: The technology generates a virtual
environment in the real-world environment of the user.
It enables customers to examine a product before
purchasing it. For example, During online shopping,
Estée Lauder processes the user's facial pic to decide on
shades of makeup individually, Warby Parker's virtual
try on for eyewear glasses, KFC's face recognition tool
for payment, and many more.
3. Cognitive Robots: These are the robots that use natural
language technology to perform operations without
human intervention. For example, Walmart's 'Auto-C'
robot analyses stock levels and detects out-of-stock
items, allowing stock associates to restock the product,
making it easier for customers by increasing product
availability.
4. Recommendation system: The system in which an
algorithm analyses browsing and order history to
understand customer preferences and purchasing
behaviour. As an example, Amazon recommends
products based on their search history.
5. Test processing technology: It is natural language
technology, which includes chatbots and sentiment
486
analysis, that analyses human language or text. For
instance, the Sephora company employs a data or text
processing tool to analyse product reviews, opinions,
and feedback.
Thus, artificial intelligence predicts customer online
purchasing behaviour by identifying, analysing, and
interpreting customer data by using its tools and
technologies. This projection gives marketers new power to
engage in activities that satisfy customers and increase
online purchasing. As a result, the study attempts to provide
a practical cohesion among the aspects of online purchasing
behaviour, artificial intelligence, and e-commerce in order
to provide new knowledge.
II. REVIEW OF LITERATURE
According to Dwivedi et al. [16] Artificial
Intelligence has the same revolutionary ability to
supplementing and possibly substituting human operations
and duties across an array of business, cognitive, and social
domains. The research investigated into how AI is affecting
different sectors of the economy, such as retail, supply
chain, logistics, finance, healthcare, and manufacturing. The
study combines the knowledge and experience of numerous
top experts to demonstrate an accurate evaluation of the
consequence, significant opportunities, complications, and
research priorities constituted through rapidly evolving AI.
Gkikas and Theodoridis [17] defined AI as a tool that
provides immense quantities of data analysis and reliable
forecasting. The research proposed a logical link among
marketing, consumer behavior, artificial intelligence and e-
commerce. It is concluded that applications powered by AI
help consumers and administrators to navigate an enhanced
consumer experience and suggestions for improvement. AI
has revolutionized customer service by utilising email
automation, social networking sites, visual and speech-based
content generators, and a variety of other applications. Khoa
[18] focused on chatbots and claims that they are an
important marketing tool used by many businesses. The
study investigated the impact of chatbots on buying
decisions and future repurchase behaviour. According to the
findings of the study, the easiness and usefulness of chatbots
impacts online consumers' attitudes towards businesses'
and results in both buying decisions and future repurchase.
Rabby, Chimhundu, and Hassan [19] gained insight into
how AI integration in digital marketing impacts consumer
purchasing behaviour.[9] The customer decision journey is
used to evaluate all artificial intelligence-powered web-
based advertising software which have the potential to
boost the user experience on the web. And concluded that
using this technology improves shopping experiences,
service quality, and customer trust. Khan [20] examined the
link between artificial intelligence and consumer purchasing
patterns. Furthermore, the difference in customer purchasing
behaviour based on demographics was investigated.
According to the findings of the study, customers consider
the AI's recommendations and responsible for 96.1% of
customer purchasing behaviour. It was also found
that males and females act differently when shopping online
and that their income influences their purchasing decisions.
Olan et al. [21]He designed a meta framework that
integrates AI, consumer behaviour (CB), and knowledge
sharing (KS). When knowledge develops, AI improves
consumer attitudes and behaviours, whereas social networks
encourage curiosity and encourage learning by having users
share their personal experiences with specific items and
amenities..
online purchasing power. For example, Amazon
suggests products based on the needs of the customer,
increasing the likelihood of a purchase [26], ; Sephora
uses AI tools to recommend makeup and skincare
products.

III. OBJECTIVE OF THE STUDY Figure 4 : AI Based recommendation engine

Source: [27]
The present paper seeks to develop the knowledge of
how technological advances such as AI have advanced
online buying behavior with the objective of studying the
impact of artificial intelligence on online buying behavior in
e-commerce. The study proposed the positive as well as
negative impact of artificial intelligence on online buying
behavior.

IV. IMPACT OF ARTIFICIAL INTELLIGENCE ON

ONLINE BUYING BEHAVIOR

Just as online commerce has provided numerous benefits

x Improves search functionality: AI algorithms produce
to consumers such as shorter shopping time[22],
accurate results that are relevant to the customer's
autonomous suggestions and relevant suggested
search, making it simple for the customer to locate the
products[23] and personal customization[24]. There are
products. For instance, eBay uses search logs to provide
some negative impact of artificial intelligence on online
relevant search results by considering item and seller
buying behavior like privacy concerns, lack of transparency
popularity, item relevancy, and user search history.
and many other. So, here are some positive and negative
Another example -The Etsy company customizes its
impact of artificial intelligence-
products using an algorithm. This system improves
Figure 3: Using AI to track how customers feel search results by utilising the product description,
Source: [25] relevancy, title, and preferences. This function engages
the customer and aids in increasing the customer's
online purchasing power.
x Chatbots benefit: Chatbots are natural language
processors that use artificial intelligence (AI) to
understand human language and provide self-service to
customers. These are intended to answer frequently
posed inquiries, assist users in navigating the app,
provide recommendations, and even assist in the
successful completion of transactions. Pizzahut, for
example, uses a chatbot on its web page and
smartphone application to enable consumers to order
pizzas and other meals. H&M provides style guidance
and product recommendations to its customers via a
A. Positive impact of Artificial intelligence on online chatbot on its Facebook Messenger platform.
buying behavior
Figure 5: Working of Chatbots
When it comes to online buying behavior, Artificial Source:[28]
intelligence has a significant impact. Here are some points
that shows positive impact-
x Inventory Management: In their system, artificial
intelligence has a feature that checks the inventory or
stock. This allows executives to have an instant look at
the stock and make it available to customers on time.
This will make it easier for customers to find products
that meet their needs. For example, Walmart has a robot
named Auto-C that checks the stock level and fills it
before the product runs out of stock. This allows
customers to easily assess the products.
x Personal Recommendations: Artificial intelligence
makes personal recommendations based on consumer
choices, past browsing behaviour, and order history. It
increases customer satisfaction, which increases

487
x Fraud detection: AI logs safeguard customers against
fraudulent activities. Paypal, for example, has a system
in place to detect fraud and block suspicious activity.
x Voice Commerce: AI tools, such as voice assistants,
make it easier for customers to evaluate the service on a
regular basis. Voice-based assistants like Siri, Alexa,
and Google Assistant make customers' shopping
experiences easier and more engaging, which increases
their purchase intent.
Figure 6: Usage of digital voice assistants
Source:[29]
Amazon Alexa, for example, assists customers by making
shopping recommendations. Customers can now order
meals through voice assistants, such as ordering pizza from
Domino's through Alexa.
Figure 7: Example of Voice assistant
Source: [29]
x Product customization: Adding this feature helps
businesses receive positive feedback from customers.
As a result of this feature, the company can provide
personalised content, product recommendations,
personalised websites, personalised AI powered
chatbots, and much more to their customers. This all
benefits customers by providing customised products
and services, while also assisting the company in
increasing sales. For example, the Nike company allows
its customers to customise their shoes based on their
preferences and needs. This allows them to fully
customise their shoes.
x Visual search: This AI tool allows customers to easily
find products by scanning or clicking on product
images. This allows you to evaluate the product from
anywhere in less time. For example, Google Lens
allows customers or any user to scan a product or item
to find it across the entire web or sites. Another
example is Pinterest, which provides visual search to
identify and recommend products based on images
uploaded to websites.
488
B. Negative impact of Artificial Intelligence on online
buying behavior
There are both positive and negative aspects to each
scenario. The same is true for artificial intelligence, which
has both positive and negative effects on online purchasing
behaviour. Some of them are listed below:
Figure 8 : Consumers concerns with artificial intelligence
Source: [30]
x Filter Bubbles: The AI tools use the customer's search
string, queries, and browsing history to provide
relevant suggestions. However, because of the filter
bubbles, this can sometimes make searching for
products difficult. As a result, the consumer receives
limited information because the search will relate it to
previous or existing information. For example, By
demonstrating individuals content that seems identical
to their previous engagements, machine learning
algorithms on social networking tools may generate
feedback loops.
x Privacy concerns: When user data is collected without
consent, privacy concerns arise. In AI, websites on e-
commerce platforms collect customer information,
raising privacy concerns. AI, like personal
recommendations, makes use of the customer's
personal information, search history, and location.
However, these personal details are sometimes abused.
Some bogus e-commerce sites, for example, collect
and misuse credit card or payment information.
Figure 9 :After AI new threats and measures
Source: [31]
x Unfair pricing: AI tools use dynamic pricing
algorithms to charge different prices. They charge
different prices based on the customer's browsing
history. Amazon, for example, has been chastised for
 using dynamic pricing. Even the riding apps charge
different prices depending on the time of day, charging
more during peak hours.
x Overreliance on automation: AI algorithms'
recommendations and suggestions limit customers to a
certain extent. The site does not display anything
beyond that search history string. Customers are
forced to rely entirely on the automation tool as a
result. Customers cannot take advantage of or miss out
on alternative offers. Customers can use AI
recommendations, but they must also conduct their
own research and read reviews before making a
purchase.
x Fake reviews and scams: When customers buy a
product or use a service, they look at the reviews and
ratings of other customers to see how other customers
rate the product or service or how satisfied they are.
Shopping sites use AI tools and technologies to
generate these types of reviews and ratings. This AI
can sometimes be used to generate fake product
reviews or false ratings , deceiving consumers and
weakening trust in online shopping platforms.
Figure 10: Fake ratings vs Real ratings
Source: [32]
V. CONCLUSION
In recent years, AI has developed incredibly which has
become an emerging trend in a variety of fields, including
the online retail sector. Through its various tools and
technologies, artificial intelligence significantly advances
the online sector. Virtual agents, cognitive robots, data
visualization, speech analytics, and recommendation
systems are all used in the e-commerce sector. This
technology significantly improves customer purchasing
behavior. The recommendation system assists customers by
making suggestions based on their browsing history, order
history, and search history. Chatbots and virtual systems
make the browsing process easier for customers. The AI
algorithm detects fraud committed by customers when
making a payment or ordering a product or service. By
using its tools and technologies, AI can thus ease the
customer journey from pre-ordering to post-ordering. Just as
each aspect has two phases, AI has a negative impact as well
489
as a positive impact. It includes privacy concerns, as
technological advancements are increasing fraud by calling
or mailing to customers through fake websites. On the one
hand, the recommendation system assists customers by
making suggestions, but on the other hand, it employs filter
bubbles, which limit the customers' ability to search.
Finally, it is concluded that AI has a significant impact on
online purchasing behavior by providing personalized
recommendations, better services, fraud detection, and many
other benefits. To make certain that the positive
consequences of AI are optimized while maintaining the
rights and values of consumers, companies and government
officials must tackle the ethical implications as well as
hurdles associated with its implementation.
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