Generative AI is fundamentally altering the retail landscape, enhancing consumer decision-making long before a purchase is finalized. According to a recent study by IBM’s Institute for Business Value, in collaboration with the National Retail Federation (NRF), while 72% of consumers still prefer in-store shopping, nearly half—45%—utilize AI during their buying journeys.
This paradigm shift indicates that today’s consumers enter stores with heightened awareness of their desires and needs, heavily influenced by AI tools. Shoppers are employing artificial intelligence for various tasks, including product research (41%), interpreting reviews (33%), and seeking out deals (31%). "AI is changing how consumers shop, and every aspect throughout the shopping journey," notes Caroline Reppert, Senior Director of AI and Technology Policy at NRF. "Retailers that understand and respond to this shift will be best positioned to earn trust, relevance, and long-term customer loyalty."
Leading brands are now rethinking how they engage with consumers in this AI-driven marketplace. As Matthieu Houle, CIO at ALDO Group, explains, "AI is turning shopping into a trusted conversation, much more than a search." Consumers now expect near-human-like assistants capable of understanding their preferences and providing tailored recommendations.
The study highlights that while 35% of consumers seek appealing stores without long waits, AI-enhanced solutions are almost equally prioritized. One in three consumers in the survey expressed a desire for comprehensive apps that merge commerce with other functionalities. Others are looking for AI-driven personal shopping experiences, with 30% interested in smart homes featuring AI-assisted shopping and autonomous delivery options.
However, the challenge arises as consumer expectations for AI-shaped shopping experiences develop quicker than many retail business models can adapt. Stanislas Vignon, Head of Insights (AI and Omnichannel) at Louis Vuitton Moët Hennessy, emphasizes, "If you don’t have the right data, it doesn’t work. And you must test your solution to know whether it works and where it will bring value."
To effectively navigate this evolving landscape, businesses can focus on several crucial strategies. First, brands should redesign their customer journey around anticipated decision-making moments where AI will be utilized. Ensuring seamless connections between these points and the final purchase can drive conversion rates significantly.
Next, businesses should consider integrating AI agents early in the decision-making process. These tools can assist with deal-hunting, review interpretation, and personal shopping tasks, ultimately alleviating customer uncertainty prior to their final decisions.
Data readiness is also essential; over half of surveyed executives (54%) report ongoing challenges related to aligning product and policy truths across platforms. Ensuring that businesses have streamlined and comprehensive data can facilitate smoother consumer interactions.
Additionally, brands need to highlight their unique qualities. Employing AI to increase relevance and decrease friction, while preserving creativity, will amplify distinctive brand expressions.
Investing in AI skills and strategic partnerships is another vital consideration. Despite half of surveyed executives reporting limited expertise in AI, fostering internal capabilities while collaborating with specialized partners can enhance the responsible and effective scaling of these technologies.
AI is paving the way for a new shopping experience, one where consumer decisions are deeply intertwined with digital influences. Understanding this AI-driven shift will prove to be a defining competitive advantage for brands adopting it. The future choices of shoppers will be increasingly guided by AI, moving retailers into a proactive role in shaping those decisions.
For additional insights, the full study is available at IBM’s website: IBM Institute for Business Value.
This convergence of AI and retail signifies not just a trend, but a vital evolution in how consumers and brands will interact moving forward. As the industry adapts, small business owners have a pivotal opportunity to leverage these insights to enhance customer loyalty and streamline their operations.
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