Why the AI shopping revolution could backfire on retailers

The rise of AI in shopping could prove costly for retailers, despite the technology's apparent efficiency. While AI assistants answer questions instantly and offer personalized recommendations, they sometimes overlook crucial details. For instance, an AI might recommend a laptop for college without considering necessary software, or a supermarket assistant could suggest substitutions that conflict with a customer's dietary preferences.

These hypothetical scenarios highlight how AI can appear efficient but fail to meet customers' actual needs.

In Australia, Bunnings' Buddy and Woolworths' Olive demonstrate AI's growing presence in mainstream retail. Amazon's Alexa for Shopping, Apple's Siri for Shopping, and Walmart's Sparky are other examples of conversational shopping technology being tested. However, these systems must balance technological capability with customer confidence. A mistaken recommendation, purchase, or disclosure of personal information could have serious consequences.

To better understand customer acceptance, researchers developed a new eight-dimensional scale measuring personalization, accuracy, safety, speed, convenience, humanization, friendliness, and emotionality. High acceptance is linked to increased word of mouth, share of usage, willingness to pay, and likelihood of adopting AI services. However, the scale does not guarantee improved sales, as priorities vary between different types of shopping assistants.

Retailers should consider measuring these eight dimensions before launching AI shopping assistants to identify areas for improvement. Measuring customer acceptance separately for different shopping experiences can help managers pinpoint underlying weaknesses before they affect the brand's reputation. Ultimately, the success of AI shopping will depend on retailers measuring customer experience and making necessary improvements to ensure accuracy, safety, and value for returning customers.