The retail landscape is undergoing a seismic shift, with generative AI (Gen AI) becoming an essential component of the consumer shopping experience. According to the latest research from Capgemini, 71% of consumers now want Gen AI integrated into their purchasing journey, highlighting a growing preference for hyper-personalized content and seamless digital experiences. The rise of AI-powered shopping is driving a fundamental change in how products are discovered and purchased, with younger generations, particularly Gen Z and Millennials, at the forefront of this transformation.
The study, which surveyed 12,000 consumers across North America, Europe, and Asia-Pacific, reveals a notable decline in the use of traditional search engines for product discovery. Over half (58%) of consumers have replaced search engines with Gen AI tools for product and service recommendations, a significant increase from just 25% in 2023. The preference for AI-driven alternatives marks a shift away from conventional online shopping methods, as consumers demand more tailored and contextual recommendations.
“The future of shopping is increasingly being shaped by generative AI,” said Lindsey Mazza, Global Retail Lead at Capgemini. “Consumers want personalized shopping experiences enhanced by AI, fast and efficient deliveries, and greater awareness of their purchasing impact. Retailers who fail to leverage these technologies risk losing their competitive edge.”
Consumers Embrace AI-Powered Personalisation
As the demand for personalization grows, Gen Z and Millennials are leading the charge. Two-thirds of these younger consumers expect hyper-personalized content and product suggestions powered by Gen AI. The appeal lies in the technology’s ability to provide relevant, contextual recommendations based on individual preferences, which traditional search engines often fail to deliver.
A striking 68% of consumers now want Gen AI tools to aggregate results from online search engines, social media, and retailer websites into a single, comprehensive shopping experience. This desire for a “one-stop shop” for product discovery highlights the growing importance of AI in streamlining the consumer journey.
Despite these advances, consumer satisfaction with Gen AI has not kept pace with expectations. While enthusiasm for the technology remains high, consumer satisfaction has dipped slightly from 41% in 2023 to 37% in 2024, signaling a gap between the potential of Gen AI and its current execution in retail.
Speed and Sustainability: Shaping the Future of Shopping
Alongside the growing demand for AI-driven personalisation, there is a clear shift toward faster delivery options. Consumers are increasingly willing to pay a premium for quick delivery, with the proportion willing to pay for rapid delivery soaring from 41% in 2023 to 70% in 2024. This trend is particularly pronounced in markets like India, Germany, and France, where consumers are ready to pay up to 9% of the order value for deliveries within two hours. As fast-commerce becomes a key factor in retailer selection, integrating quick delivery options is no longer optional but essential for staying competitive.
However, while speed is crucial, sustainability remains a top priority for consumers. A substantial 64% of shoppers prefer sustainable brands, and 67% say they would switch retailers if sustainability efforts were lacking. Yet, consumers are becoming less willing to pay a premium for eco-friendly products. The report finds that fewer consumers are prepared to pay more than 5% extra for sustainable goods, reflecting a growing awareness of the need for affordable sustainability.
The Rise of AI Influencers and Social Commerce
Social commerce platforms are becoming a central hub for product discovery, with more than half of consumers now finding new products through social media—a sharp increase from 32% in 2022. This trend is especially prominent among Gen Z, with 70% of young shoppers discovering products via social media influencers in 2024, up from 45% the previous year.
In tandem with this rise in social commerce, AI-generated avatars—artificial influencers—are gaining traction. A quarter of consumers trust AI avatars for purchase recommendations, signalling a shift towards more synthetic, yet surprisingly effective, forms of digital marketing. These AI influencers are becoming integral to online shopping experiences, interacting with consumers through platforms like Instagram and TikTok.
Traditional advertising methods, however, are facing growing challenges. While 67% of consumers notice ads on retailer websites and apps, in-store advertisements are less effective, with many shoppers finding them too generic. In response, retailers are increasingly turning to Retail Media Networks (RMNs) to enhance their advertising strategies, aiming to offer more personalized and targeted content.
The Battle for Customer Loyalty
Despite the growing importance of loyalty programs, more than half (53%) of consumers regularly switch brands or retailers, citing a lack of personalization as a primary reason. The research underscores the need for retailers to prioritize customer-centric strategies, focusing on delivering AI-powered, seamless, and exceptional shopping experiences to build long-term brand loyalty.
In conclusion, the Capgemini study highlights the profound impact of generative AI on consumer behaviour. As consumers demand more personalized experiences, faster deliveries, and greater sustainability, retailers must adapt to these evolving expectations or risk being left behind. By embracing AI and leveraging social commerce, retailers can ensure they remain at the forefront of the digital shopping revolution.
