Dangers of AI for Ecommerce: How To Mitigate Risks (2024)

Artificial intelligence is revolutionizing ecommerce. Powerful AI systems manage stock, fulfill orders, write product descriptions, send emails, and provide customer service. AI technologies can even design and build the products you sell.

Does this mean AI makes purely positive contributions to the everyday life of an ecommerce merchant? Not really. For all the potential benefits of an AI system, there are also catastrophic risks. Bad actors can use AI for data theft; AI bias can discriminate against customers and workers; and nascent AI technology can present an alignment problem with your business.

As you use AI algorithms to organize your operations, it’s also important to consider the dangers of AI and take the right precautions. Here’s what you need to know.

What is artificial intelligence?

Artificial intelligence (AI) is the branch of computer science dedicated to making machines emulate human intelligence. For much of human history, machines have been passive tools controlled by humans. While an AI tool can’t “think” the way we do, it simulates thought processes. For instance, AI decision-making involves compiling and analyzing data, considering historical precedents, and choosing a path based on predicted success—closely resembling the process humans undertake when making choices.

Rapid advancements in AI mean machines are now involved in many sectors of the economy with little to no human intervention. For example:

• AI-powered export controls can oversee the export of goods, software, and services internationally.

• AI-powered cars can drive completely autonomously.

• AI technologies analyze global issues like climate change, hunger, and traffic jams.

• AI advances have reached the battlefield, where autonomous weapons like drones can guide themselves to their targets.

With few regulations governing the use of AI, humans must take care that AI development proceeds safely and ethically.

7 dangers of AI in ecommerce

1. Data privacy breaches
2. Technical failures
3. High implementation costs
4. Ethical concerns
5. Bias and discrimination
6. Job displacement
7. Lack of transparency and accountability

The AI risk in ecommerce may not rise to the level of other industries. Unlike a military contractor, most ecommerce vendors don’t need to worry about drone warfare, submarines, or chemical weapons.

But whether you sell perfume through your Shopify site or collectibles on eBay, it’s important to understand what can potentially make AI dangerous and avoid risky situations involving artificial intelligence. Here are a few areas where AI safety is key:

1. Data privacy breaches

AI systems often glean data from an individual’s personal life, including financial and medical data, which raises concerns about privacy and data security. As an ecommerce retailer, you likely have a large cache of customer data including names, addresses, purchase histories, and financial information. It’s your legal responsibility to keep this information private. If it isn’t properly secured, and if AI systems can access it without permission, it can do significant harm to your business’s reputation.

2. Technical failures

Like all machines, AI systems are prone to technical glitches and failures. These can lead to operational disruptions, loss of sales, and damage to your company’s reputation. Have a backup plan in place for any crucial systems that incorporate AI—particularly in the early stages of an AI rollout.

3. High implementation costs

Developing AI technologies is costly for software companies, and many pass along these development costs in their pricing.

One example is natural language processing (NLP), which allows machines to compose human-like text. Many NLP systems trace their roots to StanfordNLP (Stanford Natural Language Processing), developed by Stanford University computer scientists. Vendors using the StanfordNLP platform incur licensing fees, which are then passed on to their customers.

4. Ethical concerns

Like many new technologies, AI could pose serious threats to societal infrastructure. Some AI algorithms have been accused of using copyrighted human content without permission. AI can also rapidly generate fake news articles or deep fakes, making it seem like figures have said things they haven’t. Regardless of how you plan to use AI, be mindful of these potential pitfalls. Both present and future generations must develop ethical frameworks to guide the deployment of AI technologies.

5. Bias and discrimination

Whether they power search engines or chatbots, AI algorithms are a reflection of their training data. In a biased society, AI training models can include data that discriminates based on age, race, gender, and nationality. This becomes particularly problematic if you use AI in functions like human resources or customer relations. Biased algorithms can lead to discriminatory outcomes, particularly in areas such as hiring, lending, and criminal justice, where decisions affect individuals’ lives profoundly. To address bias in AI, data scientists must give careful attention to algorithm design and the data sources they use to train the system.

6. Job displacement

Given the efficiency of AI-powered machines, there’s a fear that machines will replace swaths of human workers in the near future. Concerns of job displacement are nothing new, dating back to the Industrial Revolution, but the rapid advancement of AI capabilities has some believing that jobs like bus driving and copywriting will soon be the province of machines. As far as ecommerce is concerned, the job losses could span customer service, marketing, and content creation.

7. Lack of transparency and accountability

AI algorithms—particularly those based on deep learning and neural networks—can be complex and opaque, making it challenging to understand how they arrive at specific decisions or recommendations. This lack of transparency can erode trust in AI systems, particularly in critical applications such as health care and finance, but also in ecommerce, where transparency and accountability are paramount.

How to manage AI risks

1. Implement robust data security and privacy measures
2. Address potential bias in AI algorithms
3. Make AI systems transparent and explainable
4. Maintain human oversight of AI applications

It makes good business sense to implement AI to reach your ambitious goals. It’s also understandable if AI adoption raises concerns about potential harm to your employees and customers. To ensure the safe, ethical use of AI, abide by these four core guidelines:

1. Implement robust data security and privacy measures

Ensure that all data used by your AI systems is securely stored and transmitted. Do this by deploying encryption and regular security audits to protect sensitive customer information. Use access controls so that when a team member works with sensitive data on a computer, it’s hidden from other users.

Choose an AI vendor that regularly issues software security patches. This keeps you one step ahead of hackers, and it wards off AI data management vulnerabilities.

2. Address potential bias in AI algorithms

Reducing bias ensures fair treatment for employees and customers, boosting morale and helping you avoid negative PR and legal issues. Use diverse and representative training data. You can also audit and test AI algorithms for bias.

3. Make AI systems transparent and explainable

Your team deserves to know how your business uses AI. Secrecy can confuse employees, raising concerns about everything from intrusive surveillance to job displacement. Show your workers how you’ve implemented AI in the workplace.

You can also offer transparency to your customers. For example, if your ecommerce store uses an AI-powered recommendation engine, you can explain how the algorithm works, what information it uses, and what data it doesn’t.

4. Maintain human oversight of AI applications

Human oversight can help catch errors, prevent bias, and ensure your brand voice and values are recognizable in your content. Combine AI with human oversight to ensure automated decisions are monitored and editable, and can be overridden when necessary. Some AI-powered machines have a literal On/Off switch; in case of an emergency, you can disengage them and let humans take over.