AI Picks the Shortlist Before Retailers Get the Click

An artificial intelligence assistant may have already narrowed down the options to three before a shopper even reaches a retailer. This shortlisting process is quickly becoming its own competitive arena, as highlighted in the PYMNTS Intelligence report. According to the September edition of the Consumer AI Benchmark Report, 23% of consumers in the United States used AI for product discovery within the past year, and among those who use AI for purchases, 93% did so.

Researching and comparing products was the only shopping activity among the 10 measured that experienced notable growth, indicating that AI technology is gaining ground when it comes to determining what consumers consider in the first place.

The influence of AI in retail is becoming increasingly significant, even before transactions take place. While much of the conversation around AI commerce has revolved around autonomous product purchasing, the real disruption is occurring earlier in the process. Consumers do not require AI to hit the "buy" button; they already have efficient infrastructure for that.

However, AI can provide valuable assistance in navigating the complex decisions that come before that final step. For instance, consumers may ask AI which laptop offers the best balance of battery life and processing power or which television performs best in a well-lit room. AI can leverage its generative capabilities to synthesize information tailored to each consumer's specific constraints.

As AI continues to evolve, the competitive landscape for brands will shift from "How highly do we rank?" to "Do we get mentioned at all?" This distinction is crucial because recommendation interfaces can streamline multiple stages of the customer journey into a single interaction. Discovery, education, and comparison can all occur within the same conversation, leaving consumers with a limited pool of options before they even reach a retailer or marketplace. By the time the click occurs, much of the competition may have already been settled.

This development parallels the earlier shift towards search engine optimization (SEO), but the objective is different. SEO primarily focuses on whether a page can be found, whereas AI discovery aims to ensure that a product can be thoroughly understood and compared in response to a specific need. While AI is not replacing search engines, marketplaces, or retailer websites, it is reshaping the competitive dynamics surrounding commerce.

Companies that dominate AI commerce may not need to own the transaction to influence its economics. By determining which products enter the consideration set, they can shape consumer searches, drive traffic to specific merchants, and ultimately influence purchase intent. As the PYMNTS Intelligence team works with businesses to uncover insights that drive intelligent, data-driven discussions on changing customer expectations and strategic shifts, it is clear that AI's impact on retail will be far-reaching and significant.