US retailers turn to generative AI for holiday shopping season

26 Nov 2024 | By Mieke Meintjes

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Customers shopping this holiday season can expect to interact with generative AI tools to help them through the experience. A survey, by AI platform NLX and online research company QuestionPro, finds that 92% of US retail executives plan to use generative AI tools for customer-facing applications during the 2024 holiday season.

The survey also highlights that 59% of respondents expect AI to significantly boost sales, while 66% anticipate improvements in customer satisfaction.

“We believe the retailers that successfully deploy generative AI to delight shoppers will have a significant advantage,” says Andrei Papancea, co-founder and CEO of NLX.

The study was conducted among 100 senior retail executives from companies with 500 or more employees. The findings highlight a growing confidence in AI’s ability to shape consumer experiences.

AI tools face integration hurdles

Despite the potential benefits, integrating generative AI poses challenges. Retail executives listed cost, business risk and organizational change as significant barriers to implementation.

The survey also showed that many companies struggle to measure the return on investment, which complicates the adoption process.

These challenges indicate a gap between customer demand and retailer readiness. While platforms like Revieve and Haut.AI demonstrate AI’s potential in creating personalized experiences in personal care shopping, retailers are encouraged to address these barriers to fully capitalize on the technology’s benefits.

“When generative AI applications are more widely used by retailers, they will certainly drive customer choice and brand preference,” says Papancea.

Personalization drives AI adoption

According to the survey, retailers are mainly focused on deploying generative AI features for conversational product recommendations, generated email marketing and automated customer service.

These tools are part of a general demand for tailored shopping experiences. According to the survey, 92% of executives believe customers expect generative AI incorporation as part of their retail experience.

Virtual try-on and interactive shopping tools in the cosmetics industry have gained momentum. Revieve, an AI technology company, recently reported a 31% increase in virtual try-on experiences from Q3 to Q4 in 2024.

Revieve’s 2024 Holiday Beauty Playbook underscored consumer interest in personalized beauty solutions, with 75% of try-ons focused on high-end beauty products.