How Online Retailers Can Leverage AI Without Scaring Off Shoppers

As artificial intelligence tools go mainstream and companies look to harness their full potential, it’s logical for online retailers to integrate the technology into their selling strategies. E-commerce already offers key benefits around data collection, and AI’s capabilities promise to make vendors smarter and more agile in improving their approaches.

However, that doesn’t mean that consumers are fully ready to embrace ChatGPT at checkout. A recent survey from Digital River found that while shoppers see the benefits of the tech, the perceived risks still outweigh the rewards in their minds. This shouldn’t necessarily discourage brands, though. Nascent innovations will always need to be refined prior to widespread adoption, and vendors that adopt informed strategies now may find themselves leaps and bounds ahead of the competition in the long run.

Desire for Personalization

Digital River research made it clear that despite slow adoption on the consumer side, there’s at least a level of curiosity around how AI can improve the shopping experience. Just 27 percent of consumers said that they were familiar with AI prior to taking the survey, but of those who were, enhanced search and filtering (36 percent) and personalized product recommendations (34 percent) were cited as the most impactful use cases.

It's in the collective best interest of consumers and brands to match shoppers with products most attuned to them. It means that individuals get the items that they want, and retailers can capture the most revenue possible.

Using AI to personalize the shopping experience may just prove to be the next big step in the e-commerce boom. Online marketplaces have already made the process of finding products more accessible and intuitive, and the search engine optimization space is already abuzz when it comes to AI-based search. It’s a logical next step that brands can leverage the tech in their native storefront search to turn more site visits into conversions.

Reasons for Hesitation

Despite measured excitement from some shoppers, most expressed mild trepidation when faced with the prospect of an AI-centric experience. Consumers cited data security (54 percent) and privacy (49 percent) as their top overall priorities and pointed to these areas as reasons behind their misgivings, given a public lack of visibility into the data informing large language models (LLMs) and their outputs.

Perceptions around control in the purchasing journey were also widely resistant to AI. Just 32 percent of consumers said that they would be comfortable with AI automating routine orders, with a need for personal control over decisions (42 percent), a lack of faith in tools’ abilities to understand preferences (29 percent), and a desire to adjust orders based on shifting needs (28 percent) all named as potential pain points.

Real or imagined, these sensitivities will be roadblocks to a collective embrace of AI in the purchasing journey until brands find a way to quell concerns.

Finding the Right Balance

The crux of the AI dilemma in e-commerce is avoiding customer-facing friction. AI could prove to initially be most powerful on the backend, with behind-the-scenes optimization delivering a smoother customer experience. Tools like chatbots will still have a place, and comfortability with them can be expected to grow over time.

It’s important for brands to listen to consumers’ reservations and adjust their plans accordingly, but a general level of short-term reluctance doesn't necessarily indicate a long-term lack of viability. It took time for customers to embrace online shopping channels, but the retailers that honed their approaches in the meantime and adapted as needed were best positioned for success once shoppers came around.

The landscape figures to unfold similarly when it comes to AI. Forward-looking retailers will place an emphasis on the personalization capabilities that consumers want, while doing their part in allaying fears around security and control with the proper safeguards.

Ted Rogers is the chief marketing officer at Digital River, an experienced global commerce enabler directly connecting brands and buyers.