New AI Shopping Bots Surge Just in Time for Holiday Season

UPDATE: New AI shopping assistants are transforming how consumers prepare for the holiday season, with experts predicting a record $253 billion in online spending. Major players like Amazon.com Inc., OpenAI, and Google have unveiled cutting-edge tools designed to enhance the shopping experience, just in time for Christmas 2023.

These innovative platforms aim to cater to an evolving consumer base that increasingly demands user-friendly, efficient shopping methods. According to a recent survey by Adobe Inc., over 1 in 3 U.S. shoppers have utilized AI tools for online purchases. This trend indicates a significant shift in shopping behavior, as consumers look for smarter solutions to navigate vast product selections.

In a demonstration of these new tools, Bloomberg tested several AI bots—including Amazon’s Rufus, OpenAI’s ChatGPT, and Walmart Inc.’s Sparky—to find the best gift for mom. The overwhelming favorite suggestion? A cozy bathrobe. Rufus even personalized its recommendation, asking users about their mother’s interests before suggesting a DVD collection of classic films.

The rise of AI in shopping is driven by the pressing need for a more streamlined purchasing process. Shoppers can now engage with chatbots to find specific items, such as “well-reviewed hiking boots under $100,” making for a more intuitive experience compared to traditional search methods. Early indicators show that shoppers referred to websites via AI conversations are more prepared to buy than those using conventional search engines, according to Similarweb Ltd.

However, the transition to this new shopping landscape isn’t seamless. Although AI shopping tools are designed to simplify the buying process, they often fall short. Amazon CEO Andy Jassy recently pointed out that many bots struggle to tailor recommendations effectively and frequently display incorrect pricing or delivery estimates.

Despite these challenges, companies continue to innovate. Microsoft Corp. is developing tools to improve interactions between AI agents and retail websites, while Anthropic PBC and Google are creating protocols to enhance the communication between these bots and consumer queries. Nevertheless, many bots primarily link to retailers’ websites rather than facilitating direct purchases, limiting their effectiveness.

As the holiday shopping season approaches, the competition to capture consumer attention intensifies. Walmart has taken a proactive stance, allowing shoppers to make purchases directly through ChatGPT. This feature is rolling out in stages, initially focusing on single-item purchases, and represents a significant step toward integrating AI shopping assistants into the mainstream.

The future of agentic commerce, which could potentially evolve into a $1 trillion market in the U.S. by 2030, hinges on building strong partnerships with retailers and payment processors. Recently, Perplexity announced it would integrate PayPal checkout options, allowing users to make purchases seamlessly through its platform.

As these AI assistants continue to develop, they face the challenge of providing accurate product information while navigating complex retail environments. For instance, OpenAI’s latest tool aims to draw insights from user reviews and ask clarifying questions to refine product suggestions. However, users are cautioned to verify details on retailer sites, as inaccuracies in pricing and availability persist.

In a landscape where consumer preferences are rapidly changing, the effectiveness of these shopping bots will be crucial in driving sales during this holiday season. With the potential for a significant transformation in how we shop, technology companies and retailers are racing to adapt. As Emily Pfeiffer, an analyst at Forrester Research Inc., noted, “There are a lot of really big bets being made right now that consumers want to shop differently.”

As we approach the festive shopping period, consumers are encouraged to explore these new AI tools. The effectiveness of these innovations remains to be seen, but their development is a clear signal of a significant shift in the retail landscape. Stay tuned for more updates as this story unfolds.