In today's rapidly evolving digital economy, artificial intelligence (AI) is transforming how digital-first brands engage with consumers and optimise their operations. These primarily online businesses are uniquely positioned to harness AI tools that analyse consumer behaviour and drive strategic outcomes with precision.
AI-powered personalisation has become a cornerstone of digital commerce. Amazon's recommendation engine, for example, generates over 35 per cent of the company's revenue, highlighting how data-driven insights can translate into tangible business value. According to Md. Rehman Shafik, personalisation through AI is not just beneficial; it is essential. Salesforce data shows that 73 per cent of consumers are likely to switch brands if they do not receive personalised experiences.
AI algorithms assess browsing history, purchase patterns, and real-time engagement to deliver tailored product recommendations and dynamic content. Dr Ranga Chimhundu notes that AI allows businesses to act on detailed, real-time customer insights, enabling them to create customised digital marketing experiences. This level of personalisation enhances customer satisfaction, boosts conversion rates and builds loyalty, which are critical advantages in increasingly competitive markets.
Beyond personalisation, AI is also improving operational efficiency. In fashion retail, for instance, Zara's use of predictive systems has led to a 15 per cent increase in customer satisfaction and reduced inventory waste. As Shafik observes, these improvements demonstrate how AI can elevate both backend efficiency and the customer experience. Supporting this, Rabby et al. state that "retailers using AI-powered marketing perform five times better than traditional retailers," underlining the strategic edge AI offers.
However, the adoption of AI is not without its challenges. Concerns around data privacy, algorithmic bias, and reduced human interaction persist. As Lawler (2025) highlights, responsible implementation is essential to earning consumer trust. Without these safeguards, the same technology designed to enhance engagement could risk alienating users.
In conclusion, AI is no longer a future promise but a present force driving the new era of digital commerce. Brands like Amazon and Zara are not just using AI, they are setting new industry standards through it. As digital-first companies continue to adopt AI for deeper insights and personalised experiences, the path forward must also include ethical oversight and human-centred design. Those who combine innovation with integrity will not only lead the market, but also shape the future of e-commerce.
Ellin Ahmed
Student
Bachelor of Business Administration
North South University
ellin.ahmed@northsouth.edu
