AI’s growing influence in holiday shopping strategies

As the holiday shopping season unfolds, a report by Salesforce highlights the significant role of artificial intelligence (AI) in shaping retail strategies and consumer experiences. According to the analysis, AI is projected to contribute over $200 billion to holiday sales, marking a 12% increase compared to the previous year. This surge comes as retailers adopt AI across various aspects of the shopping experience, enabling more tailored and interactive engagements with consumers.

The report indicates that since Cyber Monday, there has been a notable 23% weekly increase in the use of generative AI and agents by retailers, underscoring a rapid adoption of these technologies. From November 1 to December 15, global online sales accumulated to $849 billion, reflecting a 4% increase year-over-year. This uptick in sales can be attributed, in part, to the influence of AI, which has impacted 19% of international orders through tailored promotions, product recommendations, and order support.

Caila Schwartz, Director of Consumer Insights and Strategy for Salesforce, stated, “As retailers work to cash in on the final spending frenzy, AI agents are a lifeline. By handling questions, order issues, and recommendations with a personalized touch, they are making last-minute gifting feel effortless. These retailers will win a bigger slice of the holiday pie.” This sentiment underscores the strategic importance of AI in the current retail landscape, especially during peak shopping periods.

Despite the increasing integration of AI into retail practices, some research indicates that consumer trust remains a barrier to wider adoption. A report from Perfect Corp. outlines that while 52% of shoppers are currently using AI tools or plan to do so in the future, nearly half (48%) expressed a reluctance to engage with generative AI. Key reasons for opting for AI include seeking assistance from virtual assistants (26%), experimenting with virtual try-on technology (23%), and accessing personalized product searches (23%). However, a separate survey from Bain revealed that many consumers are content with their existing shopping habits, contributing to the hesitance towards AI.

In response to evolving consumer preferences and behaviour, retailers are launching generative AI tools aimed at enhancing the shopping experience. For instance, Target has unveiled its Bullseye Gift Finder, a feature that utilises generative AI to suggest items based on individual preferences. Additionally, the retailer has introduced a generative AI-powered Shopping Assistant, designed to provide product recommendations and address customer inquiries. Similarly, Nordstrom has updated its mobile app, integrating generative AI to streamline the holiday shopping experience.

As AI continues to reshape the retail landscape, its implications on consumer engagement and business strategies are becoming increasingly pronounced. The integration of these technologies promises to redefine how shopping experiences are crafted, catering to a new generation of consumers who are beginning to embrace the capabilities offered by artificial intelligence.

Source: Noah Wire Services