How Does AI Improve Online Marketplaces?

When was the last time you felt a website really knew you?

Not in a creepy way, but in the “you read my mind” way. That’s the subtle magic of AI in online marketplaces, from showing you the exact product you were about to search for, to answering your questions before you type them.

Artificial intelligence in ecommerce marketplace development is already driving billions in global ecommerce revenue, improving customer experiences, and helping online retailers stand out in a crowded market.

Your last online purchase probably involved AI-powered marketplace technology, even if you didn’t notice. From personalized product recommendations to AI fraud detection, artificial intelligence optimizes pricing, search results, and checkout flows to make shopping faster, smarter, and more secure. Some online stores remember your last purchase.

AI remembers why you made it, turning transactional platforms into relationship-driven digital marketplaces, anticipating, adapting, and evolving with every single shopper.

AI as the great equalizer

Not long ago, only tech giants could afford the kind of analytics and automation AI provides. Now, those same tools are within reach for marketplaces of any size, leveling the playing field and opening new possibilities for growth.

From smarter search to dynamic pricing, AI gives smaller players the power to operate like industry leaders, and gives industry leaders the ability to innovate faster than ever before.

How top retailers use AI

Seeing super successful retailers examples of AI in ecommerce applications by industry giants (e.g. eBay, Walmart, Amazon) and are looking to replicate their success on one scale or another:

Amazon: AI for fraud detection, voice payments, and cloud AI services

Amazon, the largest marketplace, uses artificial intelligence algorithms to detect fraud in its payment system, such as online payment and identity fraud, creation of fake accounts, misuse of loyalty accounts and promo codes, etc. Thus, AI protects the company from losses and reduces the need for manual monitoring.

Amazon customers can make voice payments using Amazon Echo and its integrated Alexa AI assistant. Amazon Web Services (AWS) has launched a series of products designed to help businesses develop their own chatbots and artificial intelligence-based imaging services.

eBay: AI for personalized recommendations, faster shipping, and fraud prevention

This online outlet uses artificial intelligence to provide custom marketplace development advice and recommendations, improve shipping times, pricing, trust between buyer and seller, and more. This technology is also utilized in domains like eBay's image search functionality and automated webpage translation. In 2019, the online marketplace claimed to have detected 40% of online credit card fraud with "high accuracy" using AI.

Walmart: AI-driven robots for inventory control and price tag management

It is one of the largest retailers in the world. Walmart uses robots to scan the shelves in dozens of its stores for missing items or price tags that need to be changed. For example, machines allow you to optimize the work of your staff, in particular, to permanently forget about the problem of expired products.

The role of AI in e-commerce will only increase - the rapid development of technology in this area will be superimposed on the huge demand. Together with Codica, you can bring this technological revolution to life and create your AI powered marketplace of the future by implementing advanced AI technologies.

Way AI helps #1: Enhancing customer experience

It’s hard to imagine a world without online shopping. In the United States alone, more than 85% of consumers have bought something on the web, a number that’s expected to keep growing, with retail ecommerce sales projected to rise by around 9% between 2025 and 2029.

AI in customer service gives marketplaces the edge: smoother experiences for buyers and better efficiency for sellers.

Personalized recommendations

People don’t want to browse endless catalogs, they want to find their product right away. AI makes that possible. By learning from what you’ve clicked, bought, or even paused to look at, marketplaces can suggest items you’re far more likely to buy.

This isn’t guesswork. Modern AI spots patterns you don’t notice yourself, surfacing exactly what fits your taste, timing, and budget. The result? More relevant offers, fewer wasted clicks, and a shopping experience that feels almost effortless, for customers and retailers alike.

Improved search functionality

AI tools for ecommerce can significantly optimize the process of finding the right products and sections on sites based on a particular user's previous search history as well as his/her product preferences.

AI was implemented in recommendations to understand what products a person does not need so as not to bother the user with ads. However, with the development of algorithms, it turned out that this tool is so well-versed in human needs that it can recommend products that the user will definitely buy. A recommended products section on a product page significantly influences a buyer's decision by offering alternatives. Recommendation technologies help users find products they might not have found otherwise.

Source: Corporate Walmart

Way AI helps #2: Operational efficiency

Inventory management

Nothing kills a sale faster than “Out of stock.” AI helps retailers see shortages coming before they happen. By tracking searches, sales patterns, and seasonal demand, it predicts what’s about to run out, and when to restock.

The payoff? Fewer empty shelves, less overstock, and smarter purchasing decisions. With AI, inventory isn’t a guessing game, it’s a data-driven system that keeps popular products available, reduces waste, and frees up time for growing the business.

Dynamic pricing strategies

AI can be used as an effective tool for implementing dynamic pricing, as it allows companies to simultaneously take into account multiple aspects: user demand, competitors' offers, target audience needs, etc. By applying flexible pricing strategies, a company will be able to adjust prices depending on demand, competition, and other factors.

For example, some products people are willing to buy even at the highest prices, and when it comes to some other products, price is the first thing people pay attention to. By using search data that shows how sensitive customers are to the prices of different products, companies will be able to better understand what customers need and set the most appropriate prices for those products.

Way AI helps #3: Enhanced security and fraud detection

Spotting and preventing fraud

Artificial intelligence is a powerful, modern anti-fraud tool that significantly increases business security in ecommerce marketplace development.

All activity that takes place on an AI marketplace platform, from purchases to returns, is thoroughly analyzed by artificial intelligence. Machine learning technologies are capable of identifying unusual patterns and suspicious behaviors that may be signs of fraud attempts.

Fraud can be indicated by various signs. For example, if one and the same customer returns products too often or unexpectedly buys a certain product en masse. AI that detects such suspicious or illegal actions prevents them and helps to protect the online marketplace.

Machine learning models for identifying fraudulent transactions and patterns

AI software marketplace systems can track the movement of goods in warehouses and delivery points and thus detect if someone is trying to illegally gain access to goods to steal. Companies, in turn, will be able to react quickly to such incidents.

Enhancing customer trust through robust security measures

Fraudulent approaches change over time, and new ways to circumvent existing defenses emerge. AI systems can analyze as much information as they need, as well as continuously train, improve, and remain effective.

In addition to preventing fraud, AI-based marketplace solutions impact a company's reputation with customers.

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Way AI helps #4: Content moderation

Content moderation is the process of monitoring, filtering, and reviewing user-generated content to prevent the distribution of illegal, offensive, or harmful material. It has always played an indispensable role in maintaining the integrity and security of online platforms.

Automated review and moderation of user-generated content

One of the main reasons content moderation is important is to ensure the safety and well-being of users. Online platforms are often targets for cyberbullying, hate speech, and harassment. By implementing content moderation strategies, AI model marketplace platforms can quickly identify and remove such harmful content, protecting users from negative consequences.

Most of the world's well-known online retailers are at the forefront of implementing artificial intelligence technologies in content moderation. They include Amazon, eBay, Meta (Facebook Marketplace), and more. They all utilize advanced machine learning algorithms to automatically detect and remove malicious content, and this is their key success factor in ensuring customer trust and safety.

Ensuring compliance with policies and improving user experience

AI algorithms can learn from user behavior patterns and detect anomalies that may indicate potentially harmful content. For example, if an account suddenly starts posting a large number of spam comments or repeatedly violates community guidelines, AI systems can flag and take action against this behavior. By analyzing user behavior at scale, AI allows platforms to proactively identify and address potential problems, protecting the online community.

Way AI helps #5: Seller support and optimization

In large companies, a support specialist handles dozens of requests every day. Artificial intelligence helps to relieve the lion's share of routine tasks from employees, regardless of what field the company belongs to.

Let's list a few examples of how AI can be utilized:

1. Answers to frequently asked questions: AI enables the creation of chatbots that can handle standardized queries. These bots can provide information about products and services, solve typical problems, and direct users to necessary sections. AI chatbots are able to handle simple queries and solve them without a human or offer suitable reference materials. In addition, connected Interactive Voice Response (IVR) can answer customer questions over the phone based on pre-recorded responses. As a result, intelligent assistants will eliminate routine tasks and allow support specialists to spend more time on complex requests.

2. Automatic notifications based on behavioral data: Using AI, brands can automatically send out notifications based on user actions. For example, sending messages about order status and reminders about items left in the shopping cart influences customer engagement and promotes customer retention.

3. Connecting smart voice assistants: A number of companies note that among the most vulnerable features of their service is the long processing of incoming requests. By using an AI data marketplace that recognizes and processes voice requests, you can reduce response wait times and improve the overall customer experience.

When choosing any format, it’s important to maintain a balance between automated responses and the ability to communicate with live employees. In some situations, especially when dealing with complex tasks, human interaction is important.

Seller performance analytics

To help sellers optimize their operations, artificial intelligence-based analytics analyzes metrics (sales volume, product reviews, inventory management, and customer interactions) and thus provides sellers on online marketplaces with data on their performance.

Artificial intelligence can identify areas for improvement and offer personalized recommendations. And importantly, predictive AI models marketplace can still help sellers anticipate demand fluctuations and make more informed inventory management decisions.

For example, an AI data marketplace can track key performance indicators: conversion rate, average order amount, and customer retention. This data can then be used to create strategies to improve product listings, pricing, marketing campaigns, and customer service.

Automated customer service

AI chatbots and virtual assistants have moved far beyond rigid scripts.

Powered by GPT-5’s advanced language capabilities, they can hold conversations that feel natural, understand context, and adapt their tone to each customer. From tracking an order to processing a return or troubleshooting an issue, these assistants handle questions in seconds, often resolving them without human intervention.

For businesses, this means faster response times, 24/7 availability, and consistent service quality. For customers, it means getting help that actually feels helpful.

Future trends and innovations

Voice and visual search

Modern users want to get the information they want quickly and easily. Voice search, popular in recent years, is a vivid example of using artificial intelligence. This means, of course, searching for a range of products without having to type sentences on a computer keyboard, but by speaking them, for example, into a smartphone's microphone.

Below, you can see how Meta (Facebook) introduced a visual search for Instagram shopping.

Source: Engadget

As more and more users make purchases using their phones, voice search is becoming a very practical solution that eliminates the risk of error and is useful, for example, when a customer does not know how to spell the name of a brand or product.

On the other hand, visual search allows you to search by image. This is already a slightly higher level of AI use, but it is worth considering, for example, for stores in the beauty, fashion, or interior decor industry. Users can upload their image files and receive suggestions for similar products in the store.

AI in augmented reality (AR)

Augmented reality is already blurring the boundaries between online shopping and offline experiences.

It is a technology that allows digital information to be presented in an interactive way in a physical environment. With the help of AI app marketplace technology, the two spaces - virtual and real world - are merged. The development of augmented reality helps businesses implement effective tools, improve customer-company interaction, and provide entirely new services.

Technology can significantly shorten sales cycles, provide customers with an immersive experience, familiarize them with a product or service, and allow them to explore its benefits. Even before the purchase, the customer will be able to experience the product in the virtual world and understand its capabilities. AR technology provides many tools to increase sales.

Build an AI-powered online marketplace with Codica

Every “perfect fit” product suggestion, every lightning-fast delivery, every smooth checkout you’ve enjoyed online - chances are, AI in ecommerce was behind it.

At Codica, we make that magic happen for our clients, building AI-powered marketplaces that feel effortless for customers and profitable for sellers. The best platforms don’t feel like technology, they feel like they were built just for you. That’s what AI marketplace development is all about: blending intelligent automation with design that puts people first.

A marketplace without AI is like a store with the lights off: people can find things, but it’s harder than it should be. We flip the switch. Our AI marketplace solutions guide customers to “yes” faster, streamline operations, and drive measurable growth.

If you have a project in mind, let’s talk. Contact us today and explore our portfolio to see how we’ve turned ideas into industry leaders.