This article was compiled with the help of generative AI based on data and analysis that is original to EMARKETER.

Generative AI (genAI) is transforming the shopping journey, from discovery to delivery, with applications in advertising, product recommendations, search, customer service, and loyalty programs.

"AI is causing a shift in the shopping landscape, and we are seeing tech companies really go for a kind of grab of commerce rather than just supporting it," said our analyst Carina Perkins on a recent podcast episode of the "Behind the Numbers.”

The gap between retailer focus and consumer needs

However, a significant misalignment exists between where retailers are investing in AI and where consumers see the most value.

• "There's been several studies showing a gap between where retailers are focusing their attention on AI, which is that top of the funnel, and where consumers really want that additional help and see the value in AI," Perkins said.
• Consumers are most interested in AI solving post-purchase pain points like simplifying returns, enhancing loyalty programs, and tracking deliveries.
• Retailers that address these everyday frictions rather than pursuing futuristic shopping experiences may see better results in the near term.

Trust is also a major barrier to adoption.

“We're going to get to the point not that long from now where you'll be able to buy things automatically easily,” said analyst Yory Wurmser. “I'm unsure how quickly consumers are going to trust that. That I think is going to be the biggest factor holding back automated buying.”

Data quality and transparency will determine AI's success

For AI to deliver on its promise of seamless personalization, retailers need robust data infrastructure and transparency about how recommendations are generated.

• "Without really clean structured product and customer data, genAI agents are going to fall flat," said Perkins.
• This data readiness challenge is compounded by consumer skepticism about AI-powered recommendations, with one survey finding that one in five consumers say recommendations are "still way off base."

Transparency will be particularly crucial as agentic AI—systems that can make decisions and take actions on behalf of users—becomes more prevalent. Consumers will need assurance that AI agents are selecting products based on their best interests rather than commercial relationships.

What retailers should prioritize now

Here are three key recommendations for retailers navigating the genAI landscape:

1. Focus on fixing everyday frictions first. "Focus on the basics, get the basics right, and once you've got the basics right, then you can start looking at wonderful, transformative new shopping experiences," Perkins advised.

2. Monitor brand conversations across the internet. As AI increasingly scrapes content from review sites and social platforms like Reddit to inform recommendations, retailers must pay close attention to how consumers discuss their brands online.

3. Strengthen first-party data capabilities. "Without first-party data, your own internal agent tools aren't going to work well and personalization is going to be much harder," said Wurmser.

Listen to the full episode