Generative AI expanding role in shopping, to enable AI-led purchases: Report
New Delhi, June 24
Generative AI is expected to play a growing role in consumer purchases, evolving from a tool for product discovery and research to one that can complete transactions on shoppers' behalf, according to a McKinsey report.
AI enhancements and persistent cost-consciousness among consumers are reshaping the way consumers discover products, make purchase decisions and spend their money. The "rapidly evolving AI models have begun to shape how people shop," with young consumers or Gen Z consumers leading the shift, as per the survey report.
"We call the combined and growing impact of these channels the new tech-driven path to purchase," it said.
McKinsey's consumer survey found, "social media is now increasingly relevant across all stages of that journey and has become the most important channel for Gen Z."
The report noted, "28 per cent of Gen Zers say they are already using gen AI tools for shopping" as against 16 per cent of baby boomers," at the same time 60 per cent say they regularly use the "AI overview" at the top of traditional search platforms (versus 29 percent of baby boomers)."
Noting social media's role in the consumer decision journey, the report highlighted another factor that will influence the uptake of social media and gen AI for shopping which is "consumer trust."
It noted, "Gen Zers report lower levels of trust compared with baby boomers."
At the same time, it noted, "overall open web traffic has declined by 8 per cent since 2023, traditional search continues to play a significant role, with overall search activity still growing despite a fall in the number of searches per user."
"As AI-generated summaries and conversational interfaces evolve, the experience of using a search platform is changing rapidly," the report said.
Additionally, major technology, retail and payments companies are adapting their platforms for the next phase of digital shopping. The report noted that companies including Shopify, Amazon and Walmart are beginning to align around common standards for AI-enabled transactions, paving the way for AI agents to compare products, apply loyalty benefits and complete purchases across multiple retailers.
Accordingly, "Gen AI tools will become more widely used in the last stage of the consumer decision journey: completing purchases," the report added.
As per the report, the rise of AI-enabled purchases--known as agentic commerce--will introduce a "dual front door," where consumers can complete their purchase journeys either through retailer AI tools or within gen AI platforms.
— ANI
Reader Comments
This is interesting but I'm skeptical about AI making purchases for us. What about fraud? Already we have so many scams in India with online payments. At least for now, I'll stick to using AI for product research and manually checking reviews. Baby steps! 🛍️
As a Gen Z in Bangalore, I already use AI tools for product comparisons and price tracking. But letting AI actually purchase? No way! Too risky. Also, traditional search is dying? I doubt it - for specific queries, Google still outperforms AI chatbots in India. Let's not get too carried away with hype!
Interesting read. From a tech perspective, this makes sense - AI agents can save time on routine purchases like groceries or stationery. But in India where we have diverse languages and regional preferences, AI models still struggle with local context. The report's focus on Gen Z makes sense though, they're definitely early adopters here too.
I'm in marketing and this is fascinating! The dual front door approach - retailers vs AI platforms - reminds me of how Indian e-commerce is evolving. But trust is key. In India, we've seen how quickly people adopt tech (UPI anyone?) but also how cautious they are with data. 60% using AI overview search regularly? That seems high for India tbh.
The report misses an important angle: digital divide. In India, AI-led shopping might work for urban middle class, but what about the millions who rely on kirana stores and local markets? Also, 8% decrease in open web traffic since 2023 is concerning - this means more walled gardens and less open internet. Not a fan of
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