AI in Ecommerce: The Good, The Bad, and the Botty

The internet is now crawling with bots. These automated software programs that can do all sorts of things, from scraping website data to filling out forms are getting better and better with time, and in the world of ecommerce, bots can be both a blessing and a curse.

The Good, the Bad, and the Botty

• The Good: Some bots can be rather innocent, and help companies automate tedious tasks like executing security tests or monitoring competitor prices. Search engines such as Google are able to display relevant search results by relying heavily on bots called crawlers. These programs will read and analyze text and images found on the internet to properly index web pages, helping millions of users find what they are looking for on the web.
• The Bad: Unfortunately, bots can also be used for malicious purposes. If you’ve experienced it yourself, or heard about it, you know the frustration of missing out on limited-edition sneaker drops because bots snatched them up before you even had a chance to click “buy.” This practice, known as “inventory hoarding,” is just one of the many ways bots can harm your business.
• The Botty: So, how can we make the distinction between “good bots” and “bad bots”? It’s not always clear. As LIDD President Charles Fallon discussed in the 2024 podcast episode 2024 Supply Chain Forecast: AI, Machine Customers & ESG (lidd.com), it’s a high-stakes game of cat and mouse, with AI battling AI.

How Bots Wreak Havoc

Malicious bots are automated programs designed to mimic human behavior online. In the world of e-commerce, they’re weaponized to outsmart shoppers and grab limited-edition items. These digital shoplifters can process information and complete purchases at lightning speed, disrupting sales processes and creating an unfair marketplace.

AI Arms Race

Over time, developers have created defenses against ill-intended bots, using AI to identify and control website traffic. Think of these programs as bouncers at a nightclub. They will collect multiple data points on every human trying to get in, ultimately allowing them in or telling them to take their business elsewhere. With experience, they will get better and better at their jobs, achieving accuracy rates in the high nineties. But so will the partygoers.

The dynamic between AI-powered bots and AI-powered defenses is not any different. As bots become more sophisticated, so must the AI systems designed to counter them.

For example, AI-powered shopping assistants are becoming increasingly common, promising to provide personalized recommendations and streamline the checkout process. However, there’s a risk that these assistants could be exploited by bots to manipulate product rankings and influence consumer behavior.

Unpredictable demand spikes caused by AI-driven purchases can disrupt production, inventory management, and logistics. To combat this, retailers are investing in AI-driven solutions to protect their inventory. This includes bot detection systems that can identify and block suspicious traffic, as well as inventory management tools that can anticipate and respond to sudden demand spikes caused by bot activity.

Just the other week a major retailer came to us facing this exact issue. Their exclusive, limited-edition inventory drops were being hijacked by bots. These bots, developed by tech-savvy sneakerheads were programmed to swoop in as soon as the drops went live, purchasing all the available inventory within seconds. Not only is this frustrating for shoppers, but it also led to a surge in inflated prices on resale platforms.

It’s a nightmare scenario for any retailer.

How Solutions like Cloudflare Fight Back

• Spot the Bots: Cloudflare uses machine learning, heuristics, and behavioral analysis, like mouse movements and click speed, to differentiate between legitimate users and bots. It assigns a Bot Threat Score to incoming traffic, helping to identify and block malicious bots while allowing legitimate users to proceed.
• Build a Wall: Once the bots are identified, it can create and customize firewall rules that keep them out. For example, rules can be set to block traffic with low bot threat scores or to challenge suspicious requests with CAPTCHAs.
• Real-Time Monitoring and Analytics: With Cloudflare, businesses can continuously monitor traffic, gain insights into bot behavior, and adjust their defense strategies as needed.

The Takeaway: Protecting Your E-commerce Operations

The battle against bots is ongoing. For retailers navigating this environment, it means investing in the right technology to both defend against threats and optimize operations. Solutions like Cloudflare are a big part of this defense strategy, but it’s just one piece of the puzzle. Integrating bot defense into your overall e-commerce strategy is what will help you stay ahead.