Friday, April 12, 2024

The Influence of Artificial Intelligence on Holiday Shopping

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As the holiday season approaches, Santa Claus is getting a little extra help behind the scenes, thanks to the power of artificial intelligence (AI). According to a CNBC report, AI is expected to influence $194 billion in global online holiday spending this year.

While AI technology like ChatGPT has been gaining popularity with retailers and holiday shoppers, its impact is mostly happening behind the scenes. AI is being used to enhance tasks such as predicting demand for inventory, crafting marketing emails, and writing product descriptions for websites.

During Cyber Week, AI already had a significant impact on online sales, influencing $51 billion in purchases. However, most consumers are already familiar with some of the AI features that contribute to their shopping experiences, such as product recommendations based on past purchases and searches.

Despite the current limitations, experts believe that AI will eventually transform the customer experience in the future. As AI technology continues to advance, retailers can personalize websites and apps to create digital assistants that suggest items and answer customer questions. This can ultimately improve the overall shopping experience.

One of the key areas where AI is making a difference this holiday season is in optimizing efficiency and saving time. Retailers like Walmart, Target, and Nordstrom are using AI to predict demand, identify out-of-stock items, and even optimize delivery routes to ensure timely delivery.

Some concerns have been raised that AI advancements may result in workforce reductions. However, companies like Walmart are using AI tools like ChatGPT, called My Assistant, to enhance the productivity of their employees rather than replace them. Walmart employees can use this AI tool for tasks such as crafting email pitches or preparing slide decks.

AI also holds the potential to become a personal shopping assistant for consumers. While this is still in the early stages, a growing number of tech tools are allowing shoppers to virtually try on clothes, receive personalized gift suggestions, and find items that match their specific preferences.

In terms of products, retailers like Best Buy are offering AI-driven consumer electronic devices, such as smartphones and high-tech glasses. These products incorporate AI features like noise reduction, language translation, and voice-activated assistance.

However, consumer electronics sales have experienced a decline recently, and the high price points of AI-related devices may not be at the top of shoppers’ wish lists this season. Many consumers have tightened their budgets due to increasing costs of necessities like food and housing.

Overall, AI is playing a crucial role in enhancing efficiency, personalization, and productivity this holiday season. While its transformative potential is still unfolding, AI is expected to continue shaping the future of the retail industry and delivering enhanced experiences for shoppers over time.

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