AI will make shopping more like a game

Deborah Weinswig, Founder and CEO, Coresight Research

Coresight recently put out a report called Retail 2025 that makes some recommendations for retailers hoping to use digital technology to gain an advantage. One recommendation was, “Unleash retail media.” What does this mean?

“Retail media” refers to advertising that target shoppers close to the point of purchase. Brands pay retailers to advertise, either on store shelves or the retailer’s web site. Retailers have data about what shoppers have actually bought, so they know your preferences and can serve ads to you in the store. We’ve seen this in malls, where you opt in for Wi-Fi and agree to some Terms of Use. Then, as you go through the mall, you get personalized recommendations targeted specifically to you.

Does this improve the shopping experience?

Yes, it can almost feel like you’re in a video game: “I’ve got this item, now they’re sending somewhere else to get something else.” I’ve always looked at shopping as a sport, but here in the US, it feels more like a chore.

Retailers should do more to gamify the shopping experience. We're still early in the stages of figuring out what it means to surprise and delight the shopper.

Will that increase sales?

Probably, but the goal isn’t necessarily always to increase sales. It can be to gain mind share.

And that's just one aspect of using tech more effectively. In addition to retail media, there’s data monetization, where retailers package their anonymized data and sell it to American Express, or whoever.

Then there’s what I call “retail as a service.” Walmart is doing “last mile” order fulfilment for Home Depot – taking the goods from Home Depot’s warehouses and getting them directly to the consumer. Their supply chains are so efficient that it’s cheaper for Home Depot to use Walmart than any other third-party logistics provider.

Retail 2025 also talks about AI-assisted shopping. Will people’s agents do their shopping for them?

I think agents will probably do more research than actual buying. For example, some clothing stores have mannequins with beautiful outfits: shoes, skirt, top, jewelry, maybe a hat and a bag. I see it, and I just want that, right? So, why can’t I just scan a QR code and order it?

But first, I want to go to the store, to see what it all looks like together and make sure every item really fits me. Your AI agent will know what brands you like, and they can go out on the web and search for the best deals. They can also start to “befriend” other agents – for example, AI agents that work for the store. They can work together with those agents to get you a better deal.

And make sure the store has what you want.

Yes! Because at some retailers, it’s not uncommon for up to 20% of merchandise to be out of stock. AI-powered “intelligent ordering” can help prevent that, but a lot of retailers haven’t yet invested in it. But with the right tech, consumers can upload a shopping list and have their agent check with the store’s agent to make sure that what they need is in stock.

Will AI help cement consumer’s brand loyalty, or erode it?

It could increase brand loyalty – while at the same time, making it harder to win that loyalty in the first place. Retailers and brands want to secure consumers’ attention and loyalty in ways we haven’t seen before, and they’ll use retail media to do that. In particular, we think retailers should invest in building private labels. Increasingly, people are using GenAI to research before they shop. GenAI is going to deliver results that emphasize name-brand products. As brands start building relationships more directly with consumers, retailers want to make sure they establish a relationship between consumers and their own, private-label brand, not just with the leading national brands.

How do demographics factor into the use of AI?

Members of Gen Z (born between about 1997 and 2012) associate their own personal brands with the brands they’re purchasing. They really want to understand the brand’s DNA, so they spend more time researching purchases, and more time shopping overall. They care a lot about sustainability and do more homework before making a purchase to avoid having to return it, because they understand the environmental cost of returns.

People are interacting with brands, and asking the brand questions, in a way we've never seen before, and that trend is only going to intensify. Retailers will need to supply more information about their brands. For instance, we work with a beverage company, and each of their beverages has its own Instagram page. Brands need to take what are essentially inanimate objects and bring them to life.

Then there’s Generation Alpha (born from about 2010 to the mid-2020s). They’ve grown up with AI, with voice assistants like Alexa and Siri, and with tablets. Although young, they are having an impact on consumption patterns because of what they tell mom and dad. The way they search for, and use, information allows them to become experts very quickly. They’re consumers who do a lot of research before they consume. Also, they think about things differently. Instead of seeing clothing as “used,” they see it as “pre-loved.”

They're very into niche brands. We're working with a lot of brands to help them find potential acquisitions, because younger shoppers want to find “what's new, what's next.” This generation will have a significant impact on retail.