AI Revolutionizing How We Make Online Shopping Decisions

AI is ushering in a new era of ‘unemotional’ online purchases, argues Lyle Kercher of Space & Time. Here’s how shopping bots are changing the game.

“Ask people what they want, then sell them what they need”, to paraphrase Henry Ford.

The Evolution of Retail and Consumer Power

At its heart, this sentiment remains as true today as it was over a century ago. Retailers can enhance their sales prospects by offering a diverse range of products, encompassing various colours, sizes, features, and price points.

However, a significant transformation has been the rise of online shopping and the apparent empowerment it grants consumers. According to the ONS, British online sales as a percentage of total retail sales have surged from 2.8% in November 2006 to 30.3% in November 2024, having reached a peak during the pandemic.

With fewer individuals visiting physical stores, the opportunity for the classic suave sales assistant to deliver their pitch, inquire about needs, present solutions, handle objections, and guide customers to a purchase has diminished. Instead, shopping from the convenience of a desk or mobile phone, consumers feel more in command. They can research, browse, compare, and delay decisions at their own pace. Even after adding items to their cart and completing a purchase, they often benefit from the safety net of free returns.

Navigating the Heart Versus Head Dilemma in Purchases

While we all appreciate feeling in control of this more measured, considered purchasing process, the timeless battle between heart and head is ever-present. Consequently, many purchases are still driven by emotion and desire, rather than genuine need. This is a common human experience.

We possess an uncanny ability to overvalue specific features of a more expensive, seemingly more desirable product we’ve already selected and fantasized about, compared to a cheaper, objectively ‘better’ alternative. Sometimes, we even rationalize the necessity of buying anything at all.

Emotional spending is a well-documented phenomenon – whether it's to reward ourselves for a promotion, a payday indulgence, or to combat boredom. The small dopamine release we experience when we ‘add to basket’ and then complete the purchase is often more valuable to us than the actual product upon its arrival. Consider how many unworn clothing items reside in our wardrobes.

So, what if we, as consumers, could discover methods to make more objective, better-informed choices when shopping online? Imagine being able to swiftly utilize the vast amount of available information, tailored to our preferences, without the perceived or actual cynicism of digital platforms’ commercial agendas or retailers’ persuasive advertising copy.

The Rise of AI-Powered Shop Bots

This is where tools like OpenAI’s new ChatGPT shopping bot could prove invaluable. User queries indicating shopping intent will enable ChatGPT to provide product details, reviews, images, and links, allowing individuals to learn more or make a purchase.

You might ask, “Isn’t that just what Google or Bing already does?” Well, yes. But crucially, ChatGPT’s results are not sponsored advertisements nor are they based on a conventional algorithm. They are independently selected and tailored to relevant information the user may have previously expressed across ChatGPT interactions.

Implications for Retailers and the Path Ahead

Potentially, such an AI bot could assist consumers in leveraging all that online shopping offers while minimizing commercial bias, leading to prompt, better-informed purchasing decisions. But what does this signify for retailers?

Of course, it is still early in its rollout. ChatGPT has a considerable journey ahead before its traffic rivals that of Amazon or Google (who are developing their own generative AI shopping assistant features). Furthermore, one might anticipate that the allure of advertising revenue will eventually take precedence over user experience as OpenAI strives to meet ambitious revenue targets. Consequently, there is unlikely to be any immediate concern or significant shift in online retailers’ tactical approaches to platforms like Amazon, Google, Meta, or TikTok.

In the interim, a strong brand presence, compelling advertising copy, high-quality imagery, competitive pricing, favorable reviews, and added value – all ultimately supported by a quality product – will continue to position retailers’ products in the hearts and minds of consumers.

Now, where’s that link to that Prada paperclip I’m sure I need?