Dive Brief:
- Agentic commerce in the U.S. business-to-consumer retail market may reach $1 trillion in revenue by 2030, according to a report by ICSC and McKinsey & Company.
- Sixty-eight percent of consumers used at least one AI tool in the past three months as part of their shopping experience. And 62% of those surveyed said they have used AI to compare brands, models, prices, or reviews.
- Stores are still a relevant platform as the use of AI grows, with younger consumers choosing to shop online and visit stores to complete a purchase. Nearly forty percent of Gen Z and millennials surveyed “expressed a preference for experiential retail, creating structural upside for physical retail environments that offer discovery and social connection,” according to the report.
Dive Insight:
Retail in the U.S. is experiencing dramatic changes in the era of AI. Brick-and-mortar stores have the opportunity to survive and thrive if they know how to differentiate the in-store experience and substantially invest in an AI strategy, per the report.
Some of those tools for stores to employ include giving sales associates AI tools around real-time inventory visibility.
“AI isn’t eliminating the store — it’s raising the bar for what it needs to deliver,” Colleen Baum, senior partner at McKinsey & Company, said in a statement. “As more of the shopping journey moves upstream, the stores that win will be those with a clearly defined role — whether enabling speed and certainty or creating experiences worth the trip.”
Towards that end, some retailers see AI as an integral component of their future success. The Vitamin Shoppe recently opened its first AI-enabled Innovation Store in New York City, where it is using its new Shoppe Advisor tool to offer product information and inventory availability.
The Tecovas boot brand has also embraced the use of AI in its stores, helping with inventory replenishment and allocation. AI is allowing the retailer to better track what is and isn’t on the shelves at any particular time, and has led to real-time sales increases of 9.6% when it employs the tool rather than having it managed by humans.
“As AI transforms the shopping journey and customer expectations remain sky-high, retailers and CRE leaders will need to make disciplined, intentional investments that ensure every store in their portfolio is aligned to a clear strategic purpose — or risk missing out on growing spending power,” Tom McGee, president and CEO of ICSC, said in a statement.
While over 60% of consumers in a recent Harris Poll and Quad survey said they prefer to shop using AI-powered tools, an even higher percentage have concerns that algorithm-driven pricing isn’t always giving them the best deal on the products they seek to purchase.
Trust with AI shopping assistants was also an issue with consumers when surveyed last year from YouGov. Some 41% of respondents said they had no trust in the assistants.
