More than half of consumers said they would like to use bots or virtual assistants (55%), augmented or virtual reality (55%), and artificial intelligence (AI) applications (59%) as they shop. That’s according to an IBM study of 20,000 consumers across 26 countries.
Just 9% of those consumers said they’re satisfied with their in-store shopping experiences, though that figure is slightly higher at 14% for ecommerce experiences.
Every two years, the IBM Institute for Business Value surveys global consumers about their shopping habits and preferences. For its third study, IBM surveyed 20,000 respondents in September and October 2023. It asked them to describe their digital habits, their use of AI and generative AI, their expectations for brands, and their sentiments regarding sustainability.
In North America, 18 online retailers in the Top 1000 use IBM for order management services. Those 18 retailers generated more than $90.56 billion in web sales in 2022. The Top 1000 is Digital Commerce 360’s database of the region’s largest online retailers, ranked by their annual web sales.
IBM 2024 consumer study’s findings
“Roughly four in five consumers who haven’t yet used artificial intelligence for shopping would like to see how it can help them research products or get product information (86%), look for deals and promotions (79%) or get service, ask questions, and resolve issues (82%),” IBM said in reporting its survey results.
But that process isn’t always smooth, IBM found. Shoppers want to easily access orders, shopping carts and purchase histories every step of the way, IBM said.
“They crave more choices but less hassle, with accurate inventory data, delivery timelines, and targeted offers available in real time, at the click of a button. Most of all, they want things to just work. But they often don’t,” IBM said in its report.
It said many chatbots still lack the training, capabilities and skills they need to understand basic requests and answer customers’ questions. Because of this, just a third of consumers who have used chatbots and virtual assistants are happy with their experience, IBM found.
Benefits of implementing generative AI
Generative AI assistants can serve consumers more helpful shopping suggestions, and in natural language, IBM said. They can tap customer support emails, call transcripts, purchase history and more in real time to improve the customer experience. Similarly, generative AI can improve search functionality to then improve the customer experience, according to IBM.
Generative AI requires data collection for its large language models to be effective. In retail, that data can include what customers clicked on, where they shopped, how long they spent on certain pages, and more. It can also analyze historical sales data, market trends and other factors to predict future demand more accurately, IBM said. That would, in turn, help companies optimize production levels, reduce overstock and minimize waste.
“But consumers want to know how their information is being used (44%) and want more control over how companies use their data (40%),” IBM found. “To build trust with wary consumers — while also offering the unified experiences they want — companies must get customers’ explicit permission to track and analyze their behavior. Setting expectations up front for every interaction can make customers feel like they’re being catered to, rather than spied on.”
Sustainability continues growing as a consumer priority
Consumers “want hard data, not vague PR statements” about sustainability, IBM found. And less than half (41%) of consumers said they have sufficient information to shop sustainably. Meanwhile, nearly eight in 10 (78%) of consumers said sustainability is important to them when choosing a brand to shop from. Additionally, 61% said they’d change their shopping habits if it meant helping reduce negative environmental impacts.
That’s not just a hypothetical, the survey’s findings showed. More than two in three (67%) consumers surveyed said at least half of the products they bought in their last purchase were sustainable.
“Consumers want to see how companies measure up in the areas they most care about, such as the use of safe and natural ingredients and recycled materials — but companies aren’t providing enough information,” IBM said in its report.
Top three sustainability factors consumers care about:
- Safe ingredients or materials
- Natural ingredients or materials
- Use of recycled materials
Top three sustainability metrics that consumer-product companies report on:
- Scope 1 GHG emissions
- Percent of women in the company’s workforce
- Scope 2 GHG emissions
GHG refers to greenhouse gases. Scopes 1 and 2 refer to the different kinds of emissions of those gases.
Scope 1 emissions are direct emissions that come from sources controlled or owned by an organization, according to the United States Environmental Protection Agency (EPA). Examples include emissions associated with fuel combustion in boilers, furnaces or vehicles. Scope 2 emissions are indirect and associated with the purchase of electricity, steam, heat or cooling. According to the EPA, although scope 2 emissions physically occur at the facility where they are generated, they are accounted for in an organization’s GHG inventory because they are a result of the organization’s energy use.
Key takeaways from the IBM study:
- Nearly two-thirds of Gen Zers and Millennials want to shop for products from multiple brands on a marketplace with a single checkout.
- 3 in 5 consumers would like to use AI applications as they shop.
- 73% of consumers who care about sustainability are willing to pay more for sustainable products—up from 50% in 2022.
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