“For years, I always felt stressed out by things like Christmas because I really wanted it to be great and I really wanted to buy great gifts, but it’s always just so much work and time,” said Box, a Vancouver-based gaming executive. “This feels easier and I like it.,”
The way Box is shopping is no anomaly. Consumers are increasingly turning to AI to recommend products, notify them of sales, help them make purchases and arrange deliveries. The holidays are expected to kick those behaviours into overdrive.
AI drives smarter holiday spending
A survey of 18,000 consumers and 7,500 business leaders Shopify commissioned found 64% will use AI for at least one shopping task this holiday season. In the coveted gen Z demographic, which spans ages 18 to 24, a whopping 84% will make use of the tech.
While many shoppers have been using AI for purchases since ChatGPT’s November 2022 release sparked widespread adoption of the technology, the financial strain the holidays can bring may push new users to give it a try. “The consumer is so price sensitive and it is a really great tool for deal finding and comparisons,,” said J.C. Williams Group retail strategist Lisa Hutcheson. “This will be a year that people start to realize that.”
Shoppers will also be inclined to use AI because they are “overwhelmed by choice,” said Jenna Jacobson, director of the Retail Leadership Institute at Toronto Metropolitan University. There’s never been as many ways to shop and as much selection as there is today, but wading through it all takes time and energy that people don’t have on a good day, let alone during the bustling holiday season.
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“The thing with Black Friday and Cyber Monday is that you’re dealing with a very short time period and this is why retailers like it. It creates the pressure of ‘Buy now or the sale is going to be gone,’” Jacobson said. AI helps customers “cut through the noise” because they can use it to track prices, get alerted to new product drops and even uncover coupons or other promotions, she said.
These habits are reflected in data from consultancy firm Accenture which found 59% of the 630 Canadians it surveyed in August and September planned to use the technology for product comparisons this holiday season. About 54% said they would rely on AI for help finding purchase locations and 47% would use it for gift ideas and inspiration.
AI guides gift searches, with some gaps
Jacobson figures most of the people using AI for holiday shopping are treating it as a way to research and get gift recommendations, but savvier consumers are relying on it to help them be strategic or save.
Box will be in both camps this Christmas, when he plans to use the technology to wade through Black Friday and Cyber Monday sales to unearth gifts that have a personal feel. He’s confident AI will nail the task because when it was time to buy a birthday gift for his rugby-loving son, ChatGPT didn’t just recommend any ball. It knew the family is Australian and suggested a ball used by the country’s rugby team. Similarly, when Box was shopping for boots, it recommended ones he hadn’t found by himself that wound up being “far more appropriate” for the occasions he had in mind.
But AI isn’t a godsend in every shopping situation, points out Caitlin Chua. The Toronto-based account manager recently used ChatGPT to generate a list of features and differences between phones she was considering buying. When preparing to travel to Croatia, she also asked the chatbot to find her a place to stay that met her desired specifications, budget and vibe. She wound up happy with what AI produced in those cases but had less success when she asked Dupe.com—an AI tool that helps users find more affordable versions of items—to uncover a copycat pair of Alo pants with a specific cutout that were constantly sold out.
The website returned “options that were similar, but … because none of these other options had that cutout, I didn’t end up buying anything,” she said. “This is where there’s limitations to AI.” The lack of results satisfying Chua may mean there were no similar products out there but it’s also possible there were and AI just couldn’t find them.
After all, “AI is still in its early days” and has hiccups, Hutcheson said. Its prone to dredging up outdated and often incorrect information and experts generally advise people not to treat its output as foolproof. Yet customers and retailers aren’t shying away from it. Chua will likely still use AI for price comparisons this holiday, when brands hope the technology will give them an edge.
Retailers push AI, but hurdles remain
Shopify and online marketplace Etsy are so bullish about its potential, they even partnered with OpenAI in September to gradually let ChatGPT present their merchants’ inventory—without links or redirects—for immediate purchase. Jacobson sees it as building on search engine optimization and social media marketing to meet the customer where they want to shop.
But not everyone is as advanced as Box. Brick and mortar retail still reigns supreme in Canada, and even those willing to try AI shopping don’t always realize or want to give up more personal details about themselves or their gift recipient to yield better results.
“That’s probably going to be the biggest hurdle,” Hutcheson said. “So there may be some education needed, but I don’t think it’s going to happen this holiday season.”
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