AI in Retail and E-commerce: Transforming Business Models, Consumer Experience, and Strategic Decision-Making

Rajani P

AI in Retail and E-commerce: Transforming Business Models, Consumer Experience, and Strategic Decision-Making

Author(s)	Dr Rajani P
Country	India
Abstract	Artificial Intelligence (AI) has emerged as a transformative force in retail and e-commerce, reshaping business operations, customer engagement strategies, supply chain management, and strategic decision-making. As machine learning, big data analytics, computer vision, and natural language processing are more commonly integrated into retailing, AI is becoming an increasingly popular means of retailers to focus on personalization, optimize inventory management, forecast consumer behaviour, and enhance operational effectiveness. The paper is a theoretical one that examines conceptual backgrounds, technological aspect, strategic and ethical aspects of adopting AI within retail and e-commerce systems. The paper is based on the existing theories created to explain how AI is beneficial to sustainable competitive advantage and value creation, including Resource-Based View (RBV), Technology Acceptance Model (TAM), Diffusion of Innovation Theory and Customer Experience Theory. The applications of AI such as recommendation systems, dynamic pricing algorithms, chatbots, visual search, demand forecasting, fraud detection, and autonomous logistics are also evaluated in the discussion. In addition, it critically examines the issues related to the use of AI, such as the threat to privacy of information, bias of algorithms, displacement of workers, high costs of implementation, and regulatory complexities. The article posits that although AI usage presents both structural and moral issues, its strategic benefits largely exceed the constraints in long-term usage, which, as the paper presents, should be implemented in a responsible manner. It has given theoretical implications, managerial recommendations, and future research directions to inform the academicians and practitioners on the topic of AI-driven retail transformation.
Keywords	Artificial Intelligence, Retail Technology, E-commerce Innovation, Customer Personalization, Digital Transformation
Field	Business Administration
Published In	Volume 7, Issue 2, March-April 2026
Published On	2026-03-07

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AI in Retail and E-commerce: Transforming Business Models, Consumer Experience, and Strategic Decision-Making

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