Global technology firm CI&T has unveiled a new report which found UK consumers are “more than ready” for the AI era of retail. However, despite 61 per cent of shoppers having used AI to shop, over two thirds cannot name a “standout” AI-powered retail experience.

Melissa Minkow, director of Retail Strategy at CI&T discusses what the report might mean for retailers.

The report, titled Retail Tech Reality Check, investigates how artificial intelligence is transforming consumer shopping across the UK and Ireland. It was based on research with 2000 UK and Ireland consumers.

According to the study, 64 per cent of UK&I consumers want retailers to use AI to improve shopping experiences, compared with 58 per cent in the US.

However, the majority of UK consumers still prefer to begin their shopping journey in a physical store for seven out of the 13 consumer categories including groceries, automotives, household goods, personal care items, furniture, pet, beauty.

For home appliances, sporting goods, office supplies, apparel and accessories, electronics and luxury, most consumers preferred to start their shopping journeys digitality.

She explains that consumers want convenience, which is more about saving mental energy than it is about saving time.

She says: “Agentic AI especially allows you to conserve mental energy because it’s outsourcing that whole mental energy process, all of that research, all of the questions you might need to ask and going down those research rabbit holes.”

And retailers with strong search experiences are able to take advantage of this.

Minkow explains retailers are able to get closer to the consumer due to AI as the technology can act as the access point between the brand and the data they are collecting on the consumer.

She says: “So it’s the analysis tool, it’s decision optimisation for the retailers, and it just allows the retailers to be more efficient and understanding with the information they’re collecting on the consumer.”

The data is analysed by AI and then it will assist the retailer to make decisions on what products to push to the consumer.

Minkow says: “We’ve used AI to predict what chocolate flavour we should help a client come out with next and the way we did that was by using AI to analyse patterns in food and beverage trend reporting. Then the employees could look at that and say, okay, this is what we should come out with next.”

“Data mining is what AI does best. So it can help you. It finds patterns, and then can be predictive”.

She explains that in some ways AI can also assist smaller retailers, making them more capable of predictive decisions. However, it does tend to recommend major brands to consumers.

She says: “That’s why TikTok has been so good because it’s democratised algorithm, so you’re not necessarily going to see the top sellers or the top performers from a content perspective. You’re going to see what’s most relevant to you and that’s really what these agentic platforms and just retailers in general, need to be leveraging.”

The report shows around 70 per cent of consumer have bought something directly or indirectly from social media, with Facebook and TikTok being the most used platforms for retail.

She explains that currently retailers are seeing measurable returns from AI marketing investments because AI is a cost reducer. She adds that the real-time nature of it allows brands to protect profit margins and it also doesn’t need a lot of maintenance work.

However, Minkow suggests that there is a learning curve happening with managing bias and errors in AI systems. She says: “We need to just get this technology out the door. It’s iterative. It teaches itself.”

She adds that merchants and merchandise planners are afraid of implementing the technology as they “feel they know how to do things better”.

She says: “Trust isn’t there yet, but once it is, once we see the accuracy in it, which only comes from increased use; its like a self fulfilling prophecy. So it’s circuitous but we’re not there yet, but we need to get there. So we need to roll this out as soon as possible.”

Findings from the study showed shoppers were most worried about data privacy issues, with 83 per cent of respondents reporting that a data breach would impact their shopping behaviours to some extent. It also showed that 47 per cent would temporarily or permanently stop shopping at a retailer after a breach.

She says: “Data privacy was the top concern when it came to AI for consumers, but the second concern was what fascinated me most, and that was about pushing an agenda or biasing the results.

“So what I tell retailers all the time is you need to make sure in your search experience, the sponsored results are separate and very clearly communicated, and that the organic results are what the consumer is understanding they’re getting.

“Because we are very discerning, we are very well informed today in the shopping environment, and we don’t want to feel like we’re being pushed or up sold on certain things by a retailer’s agenda.”

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