Generative artificial intelligence (Gen AI) is transforming shopping, with 71 per cent of consumers wanting it to be integrated into their purchasing experiences, according to the fourth edition of Capgemini Research Institute’s annual consumer trends report, which revealed that technological innovation, shifting financial priorities, and increasing sustainability awareness are fueling consumer behaviour.

The preference of Gen Z and Millennials for hyper-personalisation and seamless digital experiences is mainly driving this trend.

Nearly half (46 per cent) of consumers are enthusiastic about the impact of Gen AI on their online shopping and three quarters are open to Gen AI recommendations—up from 63 per cent in 2023.

Fifty-eight per cent have replaced traditional search engines with Gen AI tools as their go-to for product/service recommendations. Sixty-eight per cent of consumers want Gen AI tools to aggregate search results from online search engines, social media platforms, and retailers’ websites to provide a one-stop shop for highlighted purchase options.

Seven in 10 consumer products and retail companies view Gen AI as a transformative technology, a significant shift from last year.

However, the study finds that while investment in the technology is on the rise, Gen AI usage is not meeting expectations. Consumer satisfaction with the technology is down to 37 per cent in 2024 from 41 per cent in 2023.

The report highlights that it is important for retailers to understand where and how consumers want the technology implemented, a Capgemini release said.

Demand for quick commerce is on the rise, with consumers from some geographies increasingly willing to pay for speed and efficiency.

With this increase, consumers are now willing to pay 9 per cent of the order value for two-hour and 10-minute delivery. Sixty-five per cent of consumers consider a two-hour delivery format a key attribute when they shop, indicating that retailers should consider integrating this into their business models. This trend is prevalent in countries such as India, Germany, France, Sweden, Spain and the Netherlands, with the United States significantly lagging in this regard.

Consumers expect sustainable products, but are not prepared to pay a premium, the report revealed. While 64 per cent of consumers buy from sustainable brands and 67 per cent would switch retailers due to a lack of sustainability, their willingness to pay a premium is decreasing.

The proportion of consumers willing to pay between 1-5 per cent more has risen slightly, from 30 per cent to 38 per cent, but those willing to pay more than 5 per cent has dropped consistently over the past two years. The report found that initiatives like carbon labelling also resonate strongly with consumers.

The study highlights that consumers are also increasingly seeking more detailed information about the product they are purchasing.

AI influencers, such as avatars created using artificial intelligence, are rising in popularity with one quarter of consumers trusting them and making purchases based on their recommendations. Social media influencers are also becoming popular, with around 7 in 10 Gen Zs learning about new products through them in 2024, up significantly from 45 per cent in 2023.

Platforms such as Instagram and TikTok are also reshaping retail, with over half of consumers discovering new products via social media, up from 32 per cent in November 2022.

The report, titled ‘What Matters to Today’s Consumer’, found that 40 per cent of all consumers occasionally use social media for customer service interactions, reflecting a growing reliance on social media for resolving issues and seeking support.

Sixty-seven per cent of consumers notice ads on retailer website/apps when they search for a product. Over the past 12 months, online adverts influenced nearly a third of online purchases.

In contrast, in-store advertisements lag behind in consumer satisfaction, in terms of content quality and placement. There are several reasons for consumer dissatisfaction.

For example, 59 per cent of consumers say the ads shown are very generic and don’t serve their specific needs. While 53 per cent want personalised in-store ads like a display in a smart shopping cart, smart mirrors, or interactive touchscreens. As a result, retailers are focusing on retail media networks to capture consumer attention.

Fifty-three per cent of consumers switch brands/retailers regularly, despite subscribing to their loyalty programmes. Experimentation and lack of personalisation are the major reasons for switching.

Fibre2Fashion News Desk (DS)