Anyone get elbowed trying to snag the “it toy” at the mall on Black Friday? Us, neither.
"The whole idea of doorbuster deals has died," says Rich Berkman, a senior partner at IBM Consulting focusing on digital commerce. Instead, holiday discounts started appearing soon after Halloween. And the biggest star of the 2024 holiday retail rush may be AI-driven shopping assistants.
AI-driven chatbots drove 1,950% more traffic to retail sites on Cyber Monday than last year, according to Adobe Analytics, helping boost retail sales to $13.3 billion that day, up by 7.3% from last year.
New AI tools Amazon's Rufus or Walmart's personal shopping assistant, both introduced mid 2024, are helping shoppers find the best deals for specific items, research product information and compare different products.
"Consumers are now coming to retailers' sites and mobile apps expecting to have a human-like conversation," says Berkman. "They are no longer satisfied with a list of search results."
Retailers whose shopping assistants personalize the shopping experience and offer easy and flexible payment options stand to attract shoppers who are increasingly doing their shopping on the go, such as “when they are waiting at the airport, scrolling on their phones,” says Jane Cheung, a Global Research Leader for the Consumer Industries at IBM’s Institute for Business Value (IBV).
This Cyber Monday, 57% of online sales came through mobile devices, up 13.3% from last year, according to Adobe Analytics.
Tech companies are joining in the digital holiday party, too. In October, Google announced it had upgraded Google Shopping with AI so that users get an AI-generated brief with top things to consider for their search. They also get a list of products that meet their top preferences—whether that’s a given size, speed of delivery or sales price—while a generative AI feature allows users to virtually try on certain clothing items. Additionally, a user’s Google Shopping home page provides a personalized feed of items they might like, based on the patterns the AI has detected in prior searches.
Meanwhile, in late November, AI startup Perplexity launched a personal shopping assistant that helps people search and purchase items. When users ask for a specific item, the assistant surfaces a series of product cards showing the most relevant recommendations, with specific details tailored to their search. Shoppers can also snap a photo of something they want, and Perplexity’s AI assistant will go find it for them. Finally, those that sign up for a USD 20-a-month subscription get free shipping and can check out directly from the Perplexity website with the click of a button.
None of the new shopping assistants are perfect—and many retailers are using this holiday season to uncover the glitches, according to Berkman. But the consumer appetite for AI in retail seems insatiable, at least for now. In a recent survey of 20,000 consumers across 26 countries, roughly four out of five consumers who hadn't yet used artificial intelligence for shopping said they would like to see how it can help them research products, look for deals and ask questions, according to IBV. Of those surveyed, 55% said they would explicitly like to use chatbots or virtual assistants.
“AI agents will only continue to revolutionize and personalize shopping as they become more sophisticated,” says Berkman.
Berkman sees a huge opportunity for retailers who can stay one step ahead and provide consumers with targeted, timely offerings—and especially those who are able to ensure safety and eliminate bias in the results served up by their AI assistants.
However, he notes that AI shopping assistants’ greatest gift to retailers may only arrive after the holiday season. AI-powered shopping assistants will gather a tremendous amount of data about shoppers—whether that be their preferences, or the top headaches they encountered—that can help them to make the shopping experience “quicker, faster and better” for next year. Then the human agents only need to be drawn in to solve particularly complicated returns for instance.
While he stresses that digital shopping assistants can help shoppers save time and money this holiday season, however, Berkman cautions that it’s important to avoid outsourcing your holiday list entirely. “If I know my child is interested in a certain artist, like Taylor Swift, I don’t want to outsource my joy in finding that perfect gift for her,” he says.