You’ve probably noticed the little elf helping you around retail stores this year. No, it’s not the teenager at the mall in red-and-white stockings and a felt green hat. It’s AI.

Log in to Amazon, and you’ll see suggested products like winter decorations, novels or toy recommendations for kids. Add that remote controlled car into your cart for your nephew, and you’ll get recommendations for batteries and gift wrapping, too. This is no accident – generative AI uses your past purchases and recent searches to curate this personalized display. At the end of your shopping affair, you can share your experience, which is data fodder for AI to learn and improve your next shopping venture.

One in six shoppers use generative AI to inspire shopping decisions, according to a 2023 Salesforce survey. However, data by SAP Emarsys report that barely more than half of consumers feel it positively impacts their online shopping experience. What is generative AI, and what does it mean for our holiday shopping – and our privacy?

What Is Generative AI?
Generative AI takes data (provided by humans) to create something new, like music, text, images or even personal shopping recommendations. Beyond simply following commands, generative AI can study existing data on the Internet to “think up” entirely new content.

How AI Is Used To Shop
Imagine hiring a personal shopper who also happens to have your entire Internet shopping history – searches, views, shopping carts, purchases and online interactions (including third-party data) – PLUS every product review and insight available online, handy in seconds. Thanks to this nearly endless supply of data, generative AI seeks to “help” consumers shop in multiple ways, including:

Creating A (Creepily) Personalized Shopping
Experience: Generative AI can curate personalized shopping lists or recommend products based on an individual’s preferences by analyzing past behaviors and predicting future interests.

Providing Chatbots And Customer Support:
Generative AI-driven chatbots can assist customers with queries, recommend products or help troubleshoot problems, often in a more sophisticated and human-like manner than traditional chatbots.

Improving Fraud Detection:

AI can recognize and learn scammer behaviors using its predictive and deep learning capabilities. This helps payment platforms pinpoint problem purchases without impacting legitimate ones.

Cons And Privacy Concerns
AI is only as good as its data. It’s not perfect, and there are some ethical and privacy concerns to be aware of, like:

  • Data Collection: For generative AI to offer a personalized experience, it requires data – lots of it. This could include shopping habits, product views, search queries, etc. The question is: How much data on consumers is too much, and where is it stored?
  • Potential For Misuse: With the ability to generate realistic content, there is potential for
    misrepresentation or misuse, such as creating fake product reviews.

Implications For Business Owners: Opportunities And Responsibilities
There are several benefits for business owners who opt for AI to improve their customer’s experience. Personalized recommendations lead to longer site visits and potentially higher conversion rates. Automation via AI can streamline operations, particularly in customer support and product visualization.

However, you also have a responsibility to your customer’s privacy. Businesses must ensure they’re transparent about the data they collect and how they use it. This includes providing clear opt-in and opt-out options for consumers. Additionally, with the increased collection of consumer data, businesses have a heightened responsibility to protect that data from breaches and unauthorized access.

Be A Smart AI Shopper
It’s crucial that you understand the terms of service and privacy policies of online platforms. Know what data you’re sharing and with whom. Periodically check and manage the data permissions you’ve granted to different e-commerce platforms, and always secure your accounts with multifactor authentication.

Enjoy the benefits of AI recommendations, but diversify your sources of information and your shopping platforms. For example, you’ll want to verify AI-powered recommendations on other product review websites like Wirecutter or Consumer Reports.

AI Chatbot Or No, Demand Excellent Customer Service
Even though a growing number of people are happy to interact with and benefit from generative AI, most people still expect excellent customer service from a human, according to Salesforce. As online platforms harness data to tailor experiences and predict behaviors, consumers should remember they have the power to drive the standards.

By voicing expectations and preferences, shoppers ensure businesses prioritize genuine human interaction and responsiveness alongside their digital innovations. After all, even in a world dominated by algorithms, genuine customer service remains at the heart of a truly exceptional shopping experience!

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