Generative AI Changing Shopping Landscape, Says Salesforce Report

Generative artificial intelligence (AI) is revolutionizing retail, with new findings revealing its growing influence on consumers’ purchase decisions. Salesforce’s latest Connected Shoppers Report offers insights into this shifting retail environment and provides a glimpse into the future of consumer behavior and industry responses.

The survey, which encapsulates views from 2,400 shoppers and 1,125 retail leaders across 17 countries, indicates a forthcoming tidal shift in retail. A notable 17% of shoppers have already tapped into the potential of generative AI for sourcing purchase inspiration, a statistic that underscores its rapid embrace despite its relatively recent introduction to the market.

Generative AI’s Role in Retail

While generative AI remains in its early stages, its potential hasn’t been lost on the retail sector. Beyond consumers, retailers are keenly evaluating its potential impact on customer engagement and day-to-day operations. Many are integrating the technology into their workflows, using it for varied applications, from creating marketing materials to tailoring customer service responses.

Yet, generative AI is just a part of a larger technological overhaul that’s been reshaping retail. The digital transformation journey – encompassing both online and in-store experiences – has experienced dramatic shifts over the past two decades. In 2021, 59% of all transactions were digital. This number dipped to 51% this year but is projected to rise to 56% by 2025, illustrating the oscillating nature of consumers’ preferences between online and offline purchases. Responding to this dynamic, 60% of retailers either strategize or execute unified platform integrations to facilitate seamless consumer experiences and boost brand loyalty.

Emerging Digital Shopping Avenues

Traditional ecommerce platforms remain predominant in the digital space. However, emerging channels, including social media, messaging apps, and live streaming, are making significant inroads. A striking 59% of shoppers revealed they’ve completed purchases via social media platforms, marking a surge from 15% in 2021.

Blending Digital and Physical Store Experiences

The role of brick-and-mortar stores is evolving with the injection of digital elements. Today, 60% of in-store shoppers use mobile devices while shopping. These devices are predominantly utilized for online product research (36%), scanning QR codes (32%), and facilitating “scan and go” purchases (18%). In response, retailers are equipping their associates with mobile devices, with the percentage of associates using them for tasks like customer service, loyalty program sign-ups, and point-of-sale activities poised to increase from 32% now to 41% by 2026.

Furthermore, stores are increasingly functioning as e-commerce fulfillment centers. An impressive 57% of consumers have chosen online products for in-store pick-up, and 49% have opted for products to be shipped from stores. Retailers are rapidly adapting, with significant projected increases in services like buy online pick-up in-store (BOPIS).

Challenges in Loyalty Programs

Earning customer loyalty has always been paramount, but new challenges loom. Shoppers’ memberships in loyalty programs have dropped from an average of 4.3 in 2021 to 3.4 today. In contrast, 75% of retailers are now offering loyalty programs, and another 22% intend to launch one within the next two years. However, innovative strategies are crucial, as many traditional point-based systems no longer resonate. Only a fraction of shoppers belong to tiered programs or multi-brand coalition models, indicating ample opportunities for retailers to introduce differentiated perks to enhance customer stickiness.

Rob Garf, VP and General Manager at Salesforce Retail, summarized the evolving scenario, stating, “Consumers are traversing a number of physical and digital touchpoints throughout the shopping journey – from browsing in stores to buying on social. Generative AI will be a game changer for retailers to increase personalization and decrease friction – ultimately driving loyalty and increasing share of wallet.”

For small business owners, these insights present opportunities to leverage the power of generative AI and other digital trends to attract, engage, and retain customers in an ever-evolving retail landscape.

Image: Envato Elements

Joshua Sophy Joshua Sophy is the Editor for Small Business Trends and has been a member of the team for 16 years. A professional journalist with 20 years of experience in traditional media and online media, he attended Waynesburg University and is a member of the Society of Professional Journalists. He has held roles of reporter, editor and publisher, having founded his own local newspaper, the Pottsville Free Press.