How will retailers use AI gatekeepers to change the shopping experience?

One in two respondents expressed a desire for an AI 'clone' to manage tasks, including shopping.

Consumers are increasingly trusting AI gatekeepers, or advanced AI assistants, to manage significant parts of their daily tasks, including shopping. Brands that fail to recognise this trend risk missing crucial engagement opportunities, potentially falling behind in the digital landscape.

A global study by Dentsu revealed that, by 2035, 49% of consumers wish for an AI 'clone' to handle their shopping, administrative, and communication duties. Since the launch of ChatGPT in November 2022, there's been a surge in the acceptance and availability of customer-facing AI applications. As this trend gains momentum, businesses are adapting to cater to a new demographic: consumers who rely on AI gatekeepers.

Rather than targeting traditional consumers directly, brands are now tailoring their offerings to appeal to AI-driven decision-makers. This shift represents a major change in the market, where AI facilitates transactions and reduces the need for direct human intervention.

“We see a future where consumers feel increasingly comfortable with letting technology – and specifically AI assistants – take over a significant share of activities in various aspects of their lives,” the report stated.

Beyond algorithms

AI is also seen to revolutionise human engagement with culture, nature, and companionship. Through immersive experiences facilitated by AI, individuals are expected to gain unprecedented access to diverse cultures and realms, fostering deeper understanding and connectivity across borders.

The report also pointed out that as people become more comfortable relying on AI, it will gradually take on greater responsibilities, potentially replacing human intermediaries altogether. This shift towards automation, known as the 'Internet of Things', means machines will autonomously collaborate and handle tasks like re-ordering supplies and scheduling service appointments by 2035.

Instead of viewing AI as job competition, it will be seen as a collaborative colleague.

“Brands will need to forge algorithmic alliances with AI systems as a means for access and influence over consumers’ many points of decision,” the report noted.

Impact on shopping and beyond

Mikey Vu, a partner at Bain & Company’s Retail practice, emphasises the impact of generative AI on retail, likening it to the rapid transformation seen with smartphones and the internet.

He said retailers must scale AI investments to match shopper expectations and focus on return on investment.

AI tools such as conversational shopping assistants and personalised search are seen to boost revenue by five to 10%. Trust in AI for personalised shopping recommendations is also notably high amongst consumers.

Moreover, AI integration in marketing strategies has shown promising results, with potential productivity gains of 30 to 40%. The report highlighted AI's potential to improve productivity by up to 25% across various retail roles through automation.

To leverage AI effectively, retailers are advised to concentrate on change management, democratisation, and talent development. This entails redesigning job roles, ensuring accessibility of AI tools to all employees, and continuous upskilling efforts.

Innovative companies like KFC Vietnam are already leveraging AI-powered personalised recommendations to streamline operations and enhance customer experiences across omnichannel commerce. In a recent Retail Asia Forum in Ho Chi Minh City, Sibojyoti Chatterjee, general director of KFC Vietnam, highlighted AI's impact on chatbots, marketing, and data analysis, underscoring its potential in personalised interactions, supply chain optimisation, and inventory management.

Despite challenges such as biases and privacy concerns, companies in various industries, including retail giants like Sephora, Nike, Starbucks, and Amazon, are leveraging AI technology for personalised interactions, supply chain optimisation, and inventory management.

AI imperative

In a previous interview with Retail Asia, Anson Bailey, head of consumer and retail at KPMG Asia Pacific, warned that failing to keep pace with AI adoption could result in losing out in the market, particularly in marketing where early implementation of AI-driven features like chatbots can drive significant online traffic. 
Additionally, retailers risk losing market share to competitors if they do not utilise AI for machine learning and analytics to gain insights aligning product offerings and customer experiences.

“Retailers today can’t afford to ignore AI nor can they sit idly by, whilst their competitors and new economy players gather momentum in the marketplace,” he said.

Questions for experts:

1. How should retailers approach the integration of AI 'clones' to manage shopping tasks?
2. What changes do you foresee in retail dynamics with the increasing role of AI assistants?