As AI in retail explodes, are you confused?
Me too.
Here’s a high-level framework to help all of us go from chaos to clarity as global retail evolves with AI.
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🛒 E-Commerce
We all know e-commerce lets customers search for products.
The store comes to us via digital catalog.
E-commerce is the foundation for AI in retail.
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👁️🗨️ Conversational Commerce
Conversational commerce is real-time conversations between customers and retailers or brands, via messaging apps, chatbots and voice assistants (like WhatsApp, ChatGPT and Alexa).
Conversational commerce builds upon the e-commerce foundation.
AI = Sales Associate
Customers ask questions. (E.g. What popular side dish should I serve at Thanksgiving?)
AI acts as an attentive curator of recommended products by answering our questions with efficient, personalized retail solutions.
Beyond answering questions, conversational commerce is adding instant checkout, giving us the potential to discover, like and buy in seconds.
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🤖 Agentic Shopping
Agentic shopping uses AI to act autonomously on customers’ behalf by setting goals, making decisions and performing tasks with minimal human intervention.
It builds upon the conversational commerce foundation.
AI = Personal Shopper
Customers provide goals and constraints, and delegate shopping tasks to the AI agent in this done-for-you model.
AI acts as an empowered digital helper takes shopping tasks off customers’ plates.
E.g. AI agents can compare prices and order the best deal automatically on the shopper’s behalf.
Agentic shopping represents the future of retail.
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Why is AI exploding in retail right now?
📈 AI benefits companies: Retailers and brands achieve higher conversions and lower support costs.
😍 AI delights customers: Shopping evolves with greater personalization and efficiency for a superior customer experience.
❤️ AI is popular: AI referral to retail websites jumped 4700% YoY in July – and it’s expected to rise by an additional 520% this holiday season. [Adobe Analytics]
🛍️ AI is changing the shopping journey: AI-driven recommendations go straight to product pages (and bypass the full range of competitors’ offerings, so customers do less browsing across a category), thereby streamlining consideration and conversion
🎯 AI is changing retail strategy: For all these reasons, the fusion of e-commerce and AI is shattering retailers’ and brands’ traditional retail strategy paradigms and investments.
What are your thoughts on retail’s AI evolution?
Related:
OpenAI’s Retail Collaborations
The Race to Conversational Commerce
AI Permeates Retail Categories
AI Permeates Retail Processes
AI Permeates Global Retail