Generative AI may be delivering the biggest e-commerce gift to the holiday shopping season economy and retailers this year.
U.S. online sales are expected to ring up a record $240.8 billion, up 8.4% from a year ago, amid a surge in traffic to retail websites from GenAI tools and direct referrals, according to a survey by Adobe Inc.
Tech titans Amazon.com Inc., Alphabet Inc.’s Google and Microsoft Corp. are pushing their AI-powered shopping tools, while advancements in natural language processing and AI-powered recommendation engines increasingly appeal to retailers and enterprises to enhance customer experiences and streamline the shopping process.
At the same time, the rise of Buy Now, Pay Later (BNPL) services conveniently intersect with AI’s predictive capabilities, creating more personalized payment options.
“Generative AI is revolutionizing e-commerce, particularly how consumers approach holiday shopping,” Keith Kirkpatrick, research director at The Futurum Group, said in an analysis of the market. “The technology’s ability to provide tailored product recommendations and quickly identify deals has made it indispensable for consumers and retailers. The rapid adoption of AI in e-commerce also signals a broader shift in consumer behavior, where convenience, personalization and smart shopping tools will define future retail experiences.”
BNPL is expected to drive $18.5 billion in online spending this holiday season, up 11% from a year ago, as shoppers turn to AI make informed decisions on payment plans, interest rates and promotional offers. Cyber Monday alone is projected to generate $993 million in BNPL-related transactions, with some 74% to 79% of purchases coming via mobile devices.
As consumers grow more comfortable with AI in general, their usage has matured — whether it be shopping, viewing entertainment or communicating. Seven out of 10 consumers who have shopped with GenAI believe it enhances their experience, and 40% intend to use AI tools during the holiday season, according to Adobe’s survey.
Consumers’ affinity for GenAI and its abilities continue to expand for several reasons: 20% of shoppers turned to AI to find the best deals, 19% use AI to find specific items online quickly, and 15% lean on AI for brand recommendations.
Still, significant hurdles remain. BNPL could face regulatory challenges that may affect its growth potential in the business sector. And companies that rely on AI-powered shopping tools may face hurdles with impending regulations on data privacy and AI ethics.
Compliance with new legislation could slow the deployment of AI technologies, limiting their effectiveness in personalizing shopping experiences, according to the survey.
