GenAI will drive online sales this holiday season

The insight: AI agents and other AI tools will influence as much as 19% of global Cyber Five sales this year—up to $61 billion in spending—per Salesforce, as both shoppers and retailers ramp up their use of the technology.

By the numbers: Generative AI (genAI) is set to play a much more important role in holiday shopping—and ecommerce overall—as consumers grow more accustomed to the tech and as retailers rely on it to offer customers a more personalized, relevant experience.

• Roughly 2 in 5 (38%) of consumers across nine countries—including the US, France, and Australia—have either already used genAI in the course of their shopping journeys or plan to use it to shop Black Friday, Cyber Monday, and other sales, per Boston Consulting Group’s 2024 Black Friday Survey.
• AI and AI agents helped drive 17% of global orders since the start of October thanks to personalized recommendations, targeted promotions, and better customer service, according to the Salesforce Shopping Index.
• Traffic to retail sites from genAI-powered chatbots doubled in the first eight months of 2024, per Adobe. The number of direct referrals (users clicking on a link to a retailer) is eight times higher YoY.

How we got here: More retailers are relying on genAI for everything from search to customer service and personalization.

• Amazon, Walmart, and others offer genAI-powered shopping assistants, and genAI chatbots are now commonplace in customer service settings.
• Retailers like Victoria’s Secret, Target, and Nordstrom are using genAI to enhance their search functions and improve product discovery. GenAI can personalize results based on users’ previous behavior and enable more conversational queries.

How customers feel: Many consumers are using the technology unknowingly—71% of US online shoppers surveyed by Bain said they were unaware of using genAI when shopping online, despite many having transacted recently with retailers that offer such tools.

• Unsurprisingly, younger shoppers are both more comfortable using AI tools and more optimistic about their ability to improve the customer experience than older generations.
• Nearly one-third of Gen Zers (32%) are comfortable with having an AI agent shopping for them, per Salesforce—good news for Perplexity, Amazon, OpenAI, and other companies investing in the space.

That said, lack of trust in genAI is hampering adoption. Nearly half (47%) of US consumers said they didn’t use genAI while shopping because they were happy with their current methods. Another 39% said they had no reason to seek them out, and 22% said they didn’t trust genAI tools, per Bain.

Our take: While users are getting more comfortable with genAI tools, their integration into the shopping process hasn’t been seamless.

• Customers largely aren’t thrilled with AI-powered customer service, especially for more complex issues.
• And assistants like Amazon’s Rufus are plagued by hallucinations, threatening consumer trust and degrading the customer experience.

Still, genAI can help shoppers navigate the endless aisle by making it easier to find deals, discover products, and deliver personalized service.

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