This holiday season retailers will get a first look at how AI is reshaping the consumer landscape. By all accounts, it has the potential to one day challenge e-commerce giants like Google and Amazon, and the trend is already well under way.
A new First Insight survey finds that 40% of holiday shoppers plan to use AI tools this year, with Gen Zers leading the way—nearly three out of four said they expect to use AI for every step from product discovery to purchase.
The rapid adoption of “one-stop-shopping,” known as generative AI shopping, has the makings of an industry game-changer.
This fall, AI industry leader OpenAI launched its first retail partnership, an arrangement allowing one-stop-shopping on Etsy, an e-commerce platform for unique, handcrafted, and vintage goods with more than 90 million customers. OpenAI is in the process of expanding its Instant Checkout feature to more than a million Shopify merchants.
Soon after the Etsy announcement, Walmart revealed a similar arrangement that allows customers to complete purchases directly within ChatGPT. Walmart said, “Through AI-first shopping, the retail experience shifts from reactive to proactive as it learns, plans and predicts, helping customers anticipate their needs before they do.” Target recently launched its version, allowing customers to shop inside ChatGPT.
AI-first is a revolutionary departure from the way most customers have been doing their e-commerce shopping—by using search engines like Google or Amazon’s massive retail media network. Much of the web traffic to retailers’ sites comes from shoppers clicking through sponsored search results to complete their transactions.
Using ChatGPT’s Instant Checkout feature, shoppers can enter a prompt such as “I want to buy mom a green sweater,” browse the results, pay, and then check out without ever browsing a merchant’s website. That means it’s less likely they will find other items they didn’t know they wanted, a downside that may make some merchants nervous.
According to OpenAI, retailers pay a small fee on completed purchases and product results served up by ChatGPT inquiries will be “organic and unsponsored.”
“Embedding checkout for hundreds of millions of users could turn ChatGPT into a true commerce destination,” EMARKETER analyst Zak Stambor recently told industry news site CX Dive. “It could challenge Amazon and Google and carve out a lucrative new revenue stream.”
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