AI tools transform Christmas shopping as people turn to chatbots & more related News Here

Rachael Dunfelt knew two things about her husband’s 21-year-old cousin: that he liked specialized racing bikes and that he was interested in Vikings.

But those bits of information provided some ideas for the perfect Christmas gift. So Rachel, 33, from Manchester, turned to artificial intelligence.

She fed information about her age, her hobbies and her interests into Microsoft-owned chatbot Copilot, which led her to the website of a niche retailer selling Viking-themed metal bike parts.

“It’s something I never really knew about,” she said, “but it was perfect.”

AI is changing the holiday shopping experience.

People are increasingly turning to AI tools for help with gift ideas and price comparisons, from Copilot to OpenAI’s ChatGPT to Google’s Gemini, which is having an impact on deal seekers and retailers alike.

John Harmon, a senior technology analyst at Coresight Research in New York, described this year as the first holiday season shaped by AI-powered shopping.

While there isn’t much data on spending directly linked to AI, Salesforce has said that AI is expected to drive 21% of all holiday orders globally, totaling $263 billion (£197 billion).

The Coresight survey found that more than half of US consumers say they would probably or definitely use AI to help them with their shopping.

In the UK and Ireland, a survey of 2,000 consumers by technology company CI&T released this month found that 61% use or have used AI tools when shopping – often to find out where to buy an item or find the best deal.

But more than two-thirds of respondents couldn’t think of an AI-powered retail experience that impressed them.

Businesses are trying to make the most of AI channels to promote their products.

“Retailers feel the need for this because AI is already shaping what people buy,” said Melanie Nuss-Hilton, senior vice president of customer success at information standards organization GS1 US.

He added, “If the product information learned by the model is outdated or inconsistent, the recommendation may miss the target, and smaller brands often lose visibility when this happens.”

The technology is beginning to advance from using AI tools to help find products on a retailer’s website, allowing shoppers to purchase items without even leaving a chat-bot.

OpenAI announced an instant checkout feature in late September. In the weeks that followed, the ChatGPS creator has announced partnerships with several major retailers and marketplaces to list some of their products directly on the chat service. Etsy and Shopify led this group, followed by Walmart in October and Salesforce and Target in November.

For example, Walmart said its partnership with OpenAI “allows customers and Sam’s Club members to plan meals, restock essentials or discover new products simply by chatting”.

But at this stage, there are limitations for shoppers who want to do their holiday shopping in full. Purchasing items without leaving AI chat is still an early phenomenon, having only been a few weeks in the making.

And AI companies hold the cards, analysts said.

Mr. Harmon said not every retailer is ready for direct purchasing within ChatGPT. Some have not yet received approval from OpenAI.

“It’s OpenAI’s game. They have control over who gets listed and how long it takes,” he said.

“The smaller ones will be left for a while until they are able to convert their data and get it approved for listing on OpenAI.”

Analysts said retailers could attract shoppers by prioritizing partnerships with AI companies.

Yanliu Huang, a marketing professor at Drexel University, said the agreements have the potential to boost brand perception among consumers. He noted the benefits for a company like Walmart, which is known for its low prices but is also trying to attract highly-educated and younger consumers.

Ms. Huang predicted that other large retailers like Costco, as well as smaller brands, would likely follow suit.

Burlap & Barrel, a US-based spice company, sees AI-powered shopping as an opportunity to increase sales.

Ori Zohar, the company’s co-founder and co-chief executive, acknowledged that the company is in a better position than many other small businesses in their sector to attract buyers, given its strong online presence.

“It turned out to be really great material to feed into an AI model,” Mr. Zohar said. He attributed the company’s recent growth in part to AI searches that drove customers to its website.

But Mr. Zohar said Burlap & Barrel is not currently seeking direct partnerships with AI companies like OpenAI. Executives are instead focusing on building the company’s own database of spices — information that AI tools can pick up and put on buyers’ radar.

Alan Binder, a teacher and sound engineer who currently lives in Hanoi, Vietnam, said he started using AI last year to brainstorm gift ideas for friends and family in the US.

Allen, 35, originally from Detroit, Michigan, said that after already using AI tools for research purposes, using them to find specific gifts felt like a “natural extension.”

Among his AI-powered discoveries: scissors from an artisan maker in England and pottery from Indonesia, a birthday gift for his mother last summer.

This holiday gift-giving season, their AI searches have led them to historical prints.

,[Chatbots] They have the ability to connect highly targeted products to their audiences,” he said.

But he acknowledged the risks of delegating shopping to AI agents, especially for those who do little research themselves to supplement AI-generated results.

“I think AI shopping will help informed consumers get more information,” he said, adding, “It will also make it easier for uninformed consumers to make purchases without thinking too much.”