With the popularity of generative AI continuing to rise, today’s highly informed consumers have quickly separated the good from the bad when it comes to how they believe brands should implement the customer experience-altering technology.
To better understand what differentiates a good experience, Coveo’s fifth annual commerce relevance report put a spotlight on tech, specifically gen AI. The enterprise AI platform’s report, which includes a survey of 4,000 U.S. and U.K. consumers conducted with Arlington Research, aims to provide a comprehensive understanding of today’s consumers including their expectations, frustrations and buying behaviors.
According to the report, 90 percent of consumers believe that online shopping experiences should match or surpass in-store experiences — it’s a high bar but one that has slowly declined from 92 percent in 2022. These findings align with a convergence of online and in-store experience and the rising importance of trust as gen AI shapes retail.
The company’s research indicates that gen AI is becoming an expectation for many consumers with 62 percent of survey respondents reporting that they are more likely to make purchases with gen AI-driven guidance — increasing to 68 percent for Millennials.
Peter Curran, general manager of commerce at Coveo, said consumers’ expectations for gen AI is that it will enrich their shopping experiences, making them more relevant, convenient and informative. Moreover, while driving higher conversions, the technology is strengthening the connection between retailers and customers.
“Gen AI doesn’t replace search — it enhances it by seamlessly integrating into key touchpoints like the search bar, product pages and shopping carts,” Curran said. “It reshapes how consumers discover and select products.”
As consumers look to find new brands and products, the survey found that digital discovery is unsurprisingly playing a key role in the decision-making process with 77 percent of consumers researching products online before buying, even when the purchase is made in-store. At the same time, while social media holds power in influencing shoppers to discover (73 percent of consumers find products on social media), only 37 percent finish a purchase on a social media platform. Notably, comfort levels for purchasing on a social media app increased in younger generations.
With this in mind, the report’s authors said that search experience is critical for retailers to get right. When it doesn’t, 70 percent of consumers will abandon the e-commerce site, citing not being able to find what they need quickly.
Here, Curran talks to WWD to share insights on Coveo’s report findings including the changing consumer expectations and shifting consumer behaviors that are defining today’s shopping experience.
WWD: Based on the new findings in the report, what would you say is the most crucial element of gen AI in today’s shopping experience?
Peter Curran: One of our biggest takeaways from survey findings is that consumers are becoming more comfortable with GenAI. Sixty-two percent said [that] they were more likely to purchase when AI tools educate and guide them toward what they need, and 61 percent would use a virtual assistant for immediate answers.
There’s little doubt that the demand for convenience, confidence and clarity in online shopping is driving consumer adoption of gen AI. The findings point to gen AI shaping the shopping experience, but this can only happen if the technology is applied correctly.
Shoppers today want their online experience to feel as intuitive and personal as shopping in their favorite store. Although gen AI can potentially meet these expectations, seamless integration into the shopping experience can be challenging, even for major brands like Amazon.
WWD: Do you think there is a disconnect between the consumer and the retailer for the use of gen AI?
P.C.: There’s definitely a right way and wrong way to leverage gen AI, and somewhat of a disconnect. For example, many retailers and organizations have already deployed gen AI-powered chatbots. This isn’t a new strategy but really a rebranding of 2000s-era chatbots as digital agents and hoping they’ll be more effective when in most cases, the quality of the customer experience brands deliver declines. Gen AI-powered chatbots may sound like a good investment but they are just one example of an ineffective and disruptive way to leverage gen AI’s inherent abilities.
WWD: How should brands think of deploying AI?
P.C.: Brands should make sure the manner in which they’re employing gen AI will enhance the customer journey, which will result in building consumer trust in the technology. We also found that not all consumers are on board with using gen AI when they shop. In fact, 43 percent of shoppers said they only trust gen AI when it provides personalized and transparent recommendations.
Bottom line: shoppers want to feel understood, not processed. Brands that can meet this expectation will not only satisfy the demand for gen AI but also create unique experiences that build trust and credibility as well as foster engagement and customer loyalty.
WWD: When comparing the in-store experience to the online experience, consumers have tended to believe that the online journey is “better” — why has this gone down?
P.C.: Consumers continue to hold high expectations for online shopping experiences, however, the confidence that e-commerce can exceed the ease of in-store shopping is waning.
Most (90 percent) shoppers still believe that online experiences should at least match in-store experiences, the percentage of shoppers who believe that online shopping should be superior to in-store experiences has declined significantly, from 47 percent to 40 percent. What this shift suggests is that consumers may be lowering their expectations due to frustration with online experiences that have failed to meet their expectations.
WWD: With this in mind, what needs to be addressed?
P.C.: Brands must accept that search is a critical touchpoint for brands, shaping first and last impressions. It can be the deciding factor in customer loyalty, as a fast and intuitive search experience shows that you value customer needs and their time.
On the other hand, a poor search experience can end the customer journey before it even begins. This is especially relevant for Gen Z, Millennials and high-income shoppers, who have high expectations and are quick to switch to competitors if those expectations aren’t met.
WWD: Will the lines between online and in-store shopping continue to overlap?
P.C.: The ever-blurring line between the physical and digital channels continues to be a critical factor in retail success. Brands must get this right because today’s consumers no longer distinguish between online and offline channels — they expect a consistent, personalized and valuable experience, regardless of the channel they use to interact with a brand. Our findings show that the shopping journey usually begins with online or social media research: 77 percent of purchases start with digital discovery, even if the final transaction occurs in a physical store, while 26 percent browse in-store before completing their purchase online. One way brands can address the seamless blending of the in-store and online experience is by enabling shoppers to easily find products online they’ve seen in-store, using QR or barcode scanning. Eliminating hidden inventory is also important. Displaying all products online, even if they’re only available in-store because shoppers are unlikely to visit if they can’t confirm product availability.
