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 with a felted 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 will be data fodder for AI to learn and improve your next shopping venture.

One in six shoppers uses generative AI to inspire shopping decisions, according to a 2023 Salesforce survey. However, data by SAP Emarsys reports 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 in to 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 also 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, according to Salesforce most people still expect excellent customer service (that’s human). 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 that 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!

If you have more questions about AI or the best way to holiday shop securely, our IT team can provide more information. Click here to book a 10-Minute Discovery call with us today.

TOSS C3 is the trusted Cyber Technology Services provider in Massachusetts specialized in serving law firms, libraries, local governments, and healthcare providers throughout the USA.