The role of AI in creating a personalized shopping experience.

In 2017, Sephora launched its Virtual Artist app, allowing users to virtually try on makeup via their smartphones. What seemed like a tech gimmick was actually the precursor to a broader transformation. For the first time, artificial intelligence entered the shopping experience to offer something unprecedented: instant personalization that not only considered your preferences but anticipated your needs before you even expressed them. Today, in 2025, this revolution has completely reshaped the e-commerce landscape. Online shopping is no longer what it was five years ago, and AI is the main architect of this change.
The end of the universal catalog: every customer becomes unique
For decades, retail operated on a simple universal principle. A product was presented the same way to every customer, whether in a physical store or online. Salespeople could adjust their pitch, but the catalog remained identical for everyone. That era is coming to an end. AI now enables retailers to offer each visitor a truly tailored experience, adapted in real time to their profile, purchase history, and even context.
Take Amazon as an example. When two people log in simultaneously, they literally see different sites. The recommendation algorithm, fueled by years of behavioral data and millions of transactions, creates a unique storefront for each user. Today, this personalization accounts for 35% of Amazon’s total revenue—demonstrating that individualized experiences have become a key driver of commercial success. The system does more than suggest products similar to previous purchases. It detects patterns invisible to humans, predicts when a consumable needs replenishing, and identifies product combinations users may never have considered.
This hyper-personalization goes beyond recommended products. Sephora, for instance, developed tools like Color IQ and Skin IQ that analyze thousands of skin tones and types to ensure perfect matches between customers and cosmetics. The system doesn’t offer a generic list of foundations; it identifies three or four exact matches for each user. This guidance drastically improves the shopping journey, allowing customers to find the right product immediately, reducing returns, and increasing satisfaction and trust in the brand.
Predictive analytics takes this further by anticipating future customer needs through purchase histories, interactions, and browsing behavior. For instance, if a customer buys mascara every two months, the system tracks this cycle and triggers a personalized notification just before the product runs out. This isn’t mass marketing sent at random; it’s proactive assistance that genuinely helps customers, especially for everyday items, cosmetics, supplements, or household products.
A 24/7 salesperson
Customer service has long been a challenge in e-commerce. How can thousands of questions about products, availability, delivery times, or returns be answered instantly without huge teams? Early chatbots from the 2010s were often frustrating, failing to understand natural language nuances and offering standardized answers disconnected from the actual question. That era is over.
New chatbots, powered by conversational AI, no longer simply recite scripted responses. They understand context, advise like a salesperson, and guide customers throughout their shopping journey. These virtual assistants are available around the clock, handling thousands of simultaneous conversations without losing patience or quality. Sephora’s Beauty Bot is a perfect example. It doesn’t just answer factual questions—it engages in genuine conversation, understands user needs, provides personalized recommendations, and supports purchase decisions with timely information.
The economic impact is significant. Companies see lower customer service costs and improved satisfaction thanks to immediate and consistent responses. Human sales staff are not obsolete; rather, they are freed from repetitive tasks and can focus on complex queries, special requests, and high-value interactions.
Voice and visual search further transform commerce. Sephora pioneered integrations with Google Assistant in 2017, allowing users to book appointments, get advice, or make purchases via voice commands. No need to type keywords or navigate menus. AI interprets intentions into results, and visual search lets users photograph an item and instantly find where to buy it online, solving a universal frustration: seeing something attractive without knowing how to obtain it.
Behind the scenes: AI optimizes the entire value chain
While visible innovations impress, operational transformations enabled by AI are equally remarkable.
Take inventory management. Logistics managers traditionally relied on historical sales data and intuition to decide order quantities, often causing stockouts or expensive surpluses. Today, AI algorithms analyze massive data sets to accurately forecast demand, trigger restocking automatically, and prevent shortages or overstock. Seasonal trends, external events, weather, competitor actions, and even news are factored in. Amazon, for instance, has invested heavily in systems that predict purchases before customers even realize them.
Logistics is also transformed by intelligent automation. Amazon warehouses use robots coordinating with human teams to optimize every movement and workflow, continuously learning and improving efficiency. This results in faster order fulfillment and lower operational costs, enabling quicker deliveries at competitive prices. Walmart has similarly invested, filing over 3,000 AI-related patents and achieving notable efficiency gains.
Fraud detection is another AI-driven area. Behavioral analytics systems identify suspicious anomalies in real time, blocking fraudulent attempts before damage occurs. In 2024, with French e-commerce surpassing €170 billion, these protections are critical. AI detects subtle patterns invisible to humans—like unusual delivery addresses combined with high-value purchases—safeguarding both consumers and businesses.
Challenges ahead: promises and caution
Despite advances, AI in e-commerce raises valid concerns. First is privacy and data use. These systems require access to vast amounts of personal information, raising questions about consent, security, and transparency.
Technological dependence is another issue. By 2025, over 90% of customer interactions may be AI-managed. While efficient, many customers still value human interaction for complex purchases. The risk is fully dehumanized commerce, where algorithms decide everything without empathy or discretion. Savvy companies aim to balance automation with human touch where needed.
AI systems learn from historical data, which may contain biases. Recommendation engines could, for instance, reinforce gender stereotypes if certain products are predominantly bought by men or women. This highlights the ethical responsibility of companies deploying these technologies.
The reshaping of commercial power is perhaps the deepest transformation. For decades, distributors dictated product placement. AI changes this dynamic: when a consumer asks a virtual assistant for the best product, shelf placement becomes irrelevant. AI platforms are the new gatekeepers, influencing visibility and recommendations, creating dependence on technology intermediaries.
AI doesn’t just improve e-commerce technically—it fundamentally reinvents it. It transforms transactions into personalized experiences, removes temporal and geographic barriers, and optimizes operations across the value chain.
Statistics confirm this shift: 97% of e-commerce businesses see generative AI as a promising innovation, and 37% already use it for product content creation. This widespread adoption shows a shared belief: AI is no longer optional—it’s strategically essential, and companies ignoring it risk obsolescence. Personalized commerce is now the standard expected by consumers.
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