OK computer: will AI be telling you how to shop?
Hyped as a “seamless” user experience and an opportunity for retailers to access “hundreds of millions” of consumers via ChatGPT, OpenAI walked back from its Instant Checkout shopping function at the end of March, just months before unveiling it.
The tool would have allowed users to complete purchases entirely within ChatGPT, but the Silicon Valley firm conceded its product was not up to scratch. “We’ve found that the initial version of Instant Checkout did not offer the level of flexibility that we aspire to provide, so we’re allowing merchants to use their own checkout experiences while we focus our efforts on product discovery,” the company said.
Asked to buy a tin of baked beans, ChatGPT helpfully compares prices and quality of various options but transfers the hungry user over to a seller’s website for the actual purchase – the “last mile,” as retailers call it.
Though 64 per cent of British consumers want retailers to use AI to improve shopping experiences, according to information technology firm CI&T, 68 per cent of these could not name a single AI-powered shopping tool that impressed them.
While OpenAI is stepping back – at least for now – from AI-powered shopping, other retailers are steaming ahead. Will they be proven right, or is shopping an experience that can never be fully automated?
Retailers race to AI shopping
Kingfisher, the owner of DIY firms including B&Q and Screwfix, is determined to be ahead of the curve. The company has partnered with Google Cloud to deploy in-house AI-powered shopping across a number of its retailers.
The home improvement firm said the appetite is there – it claims to have seen a 60 per cent year-on-year increase in the number of customers using in-house AI agents, and says a whopping 95 per cent of these searches end up in sales.
AI shopping is “an area where Kingfisher was an early adopter, and we see ourselves as a leading retailer,” chief executive Thierry Garnier said in a results call last month.
Retail giant John Lewis is also excited about AI shopping, having pledged to become one of the first UK retailers to fully adopt the tech. The firm is preparing its data to be accessed by AI platforms like Google Gemini and ChatGPT for third-party shopping when it is rolled out for good, and working to roll out AI in its website search functions.
Dom McBrien, chief digital and omnichannel officer at John Lewis, told CityAM: “We’re always looking at the new channels our customers are using. This is increasingly including AI tools, and it doesn’t show signs of slowing down.
“By bolstering our presence on these channels, we can offer people the quick and seamless experience they want.”
Consumers fear big tech ‘agenda’
Fashion retailer Next, however, is taking a cautious approach to the technology. In its financial results, the clothes seller said it will not create a centralised AI department, and will only use the technology in particular applications.
Chief executive Simon Wolfson said he does not think Brits will be able to shop entirely within an AI chat bot any time soon. While useful for research and product comparison – which Next is facilitating by making its data readable by AI – he said complexities around transactions and returns make this technology unlikely in the near term.
Researchers at CI&T say consumers would be reluctant to complete transactions through AI chat bots anyway, even if OpenAI had introduced the tool. Concerns over data privacy and the bias behind search results mean Brits are far more likely to spend this “last mile” on the in-house websites of retailers they trust, their research found.
The lack of transparency over why AI agents are producing certain results and whether they are incentivised to do so means people are far more likely to buy through big-name retailers, even if they use AI-powered search too.
Melissa Minkow, global director of retail strategy at CI&T, told CityAM: “The consumer needs to be so convinced that they’re not being sold an agenda, and I don’t think the consumer feels that way just yet on these third-party platforms.”