AI is creating game-changing opportunities to boost customer experience and loyalty, but only if the shopper’s needs stay front of mind, says Melissa Minkow, Global Director, Retail Strategy and Insights, CI&T.
In this era of AI hype, technology has become an even more powerful, transformative growth lever for enterprise retailers. AI is indeed creating game-changing opportunities to boost customer experience and loyalty, but only if the shopper’s needs stay front of mind.
UK&I consumers are understanding AI as a means to getting their needs met and the technology is becoming rapidly incorporated into shopping journeys. CI&T’s latest research shows that 68% of shoppers have already used an agent when shopping and 80% of these have done so in the past three months. But these shoppers aren’t using AI out of curiosity.
In fact, ‘curiosity regarding trying a different way of shopping’ scored the lowest among the reasons as to why respondents would complete a purchase with an AI Agent. The value of AI is defined by the ability to facilitate better decisions, find the best prices and locate the right products.
However, despite rapid adoption by both shoppers and brands, consumers still have reservations regarding AI. Recent Gartner data found that 53% of consumers distrust or have a lack of confidence in the reliability and impartiality of AI search results. Meanwhile, a stark 68% of consumers remain unimpressed by AI-powered retail experiences, with the primary concerns being about data privacy and biased search results, according to CI&T’s Retail Reality Check report.
The challenge, then, for retailers, is in building AI-powered experiences that go beyond hype, driving loyalty and establishing trust.
What shoppers want – the new definition of value
Economic pressure reshapes consumer expectations and that motivates AI use cases. When asked where they find the most value in using an AI shopping agent, the primary response from UK&I shoppers was that it helps them to save money by finding the lowest prices available.
Eighty-seven per cent of consumers say they are making smarter purchase decisions than they were two years ago. When asked what ‘smarter’ means, the largest group cited better value, while others pointed to researching purchases more thoroughly before buying. For today’s consumer, value drives loyalty and when value is perceived, trust follows.
Proprietary AI products risk amounting to little more than PR generation if they don’t deliver tangible improvements to the customer experience. The second most commonly cited way that AI drives value for shoppers was by saving them mental energy. AI features like chatbots or virtual trial tools will fail to harness loyalty and drive purchases if they create more friction, rather than increase efficiency.
Operational Excellence > Novelty Experience
To avoid falling into a visibility trap, where AI is implemented at a surface level, it’s crucial that AI-powered improvements actually enhance customer-facing tools as well as embed within deeper operational transformation. Scaling AI often requires a rewiring of entire parts of an organisation, including technical capabilities, operating models and talent, according to McKinsey research.
The same research found that the retail companies that have succeeded in utilising the power of generative AI tend to excel in two key areas: first, they consider how AI use cases help to transform specific departments, rather than spreading thinly across multiple and second, they nail the transition from piloting to deploying at scale. For this to happen, retailers need to make significant organisational changes to facilitate full adoption.
Since AI should be used both behind the scenes and with the consumer in order to deliver return on investment, it can be challenging to decide on a starting point. A simple but effective principle to keep in mind when considering where to turn first is that excellence should outweigh novelty.
The secret to implementation lies in consumers’ own rankings of helpful agentic shopping scenarios: comparing prices between brands, comparing the same product across retailers and finding products that fit within a budget.
The future is fundamentals
Ultimately, AI is transforming the way consumers shop. It’s up to retailers now to adapt alongside them by harnessing the potential of AI.
The opportunity for retailers lies in the fundamentals of the shopping experience. What consumers are really looking for – and what will drive brand loyalty – is a better ability to make purchase decisions, fair pricing, relevant assortment and smoother experiences. Consumers value AI not for its visibility, but for the outcomes it enables.
Across the sector, the retailers and enterprise leaders that win will be those who embed AI into their foundations, prioritising measurable value over first movement. Innovation isn’t enough in and of itself and it certainly isn’t the finish line.
