AI's impact on retail: What to expect this Golden Quarter

The Golden Quarter is the most lucrative time of the year for retailers, but consumer priorities are shifting: the focus is firmly on convenience and cost.

Shoppers are stressed when it comes to gift shopping, with more than two-fifths of festive shoppers feeling the pressure. This year, AI is helping ease the mental load of gift selection.

And while nine in ten people are already using generative AI to enhance their shopping experience, it comes with a caveat: the risk of impersonal suggestions. This Golden Quarter, brands need to understand consumer expectations to deliver the experience they deserve. This means leveraging AI while maintaining authenticity.

AI-driven shopping behaviour

AI is already embedded in our shopping experiences, ideally suiting the way the UK likes to shop. Since COVID, nearly 85% of consumers now shop online, compared to just under 50%across the rest of Europe.

AI tools such as recommendation engines are driving consumer behaviour, influencing everything from what people buy to when they act, and what they expect from brands. Some other interesting emerging trends include:

• Through product recommendations and order support, AI tools have already influenced 19% of online sales
• Using AI for actions such as searching for products, comparing prices, making purchases and arranging shipping
• Leveraging AI to create shopping lists for friends and family

Make it personal

The convenience offered by AI is undeniable, but it’s personalisation that enhances the shopping journey. Though it is becoming more sophisticated, AI can’t understand the context or emotional nuance that elevates gift giving. Without the human touch, the gifts recommended can be generic and impersonal.

Using AI can be powerful but without integrating both personalisation and understanding intent, your strategy risks falling flat. Consumers don’t want a list of robotic suggestions; they want to be engaged by recommendations that feel tailored to their unique needs at a given point in time.

How to unlock AI's full potential

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   Know your customer

When using an AI-driven personalisation engine, providing access to relevant customer data can drive useful content and suggestions. AI can be powerful in understanding user intent and applying it to the current context rather than just providing an average of a user’s purchase history. But be wary – extra considerations for data governance and privacy are necessary here.

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   AI as the helper, not decision-maker

Brands should be developing their digital proposition and leveraging AI to help, not replace, the personal touch. On-site AI tools can take the heavy lifting out of repetitive tasks such as sorting product options, but surfaced recommendations should be rooted in context and feedback.

Off-site Large Language Models (LLMs) like Google’s AI Overviews are useful for comparing prices across different sites, so brands should streamline their shopping feeds to ensure content is easily found in external tools.

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   Build trust

If customers aren’t getting enough out of the AI tools on your site, trust can deteriorate. Whether your brand utilises agentic service bots or recommendation engines, be transparent about AI’s role in the background of their shopping experiences. To demonstrate brand authority, leverage social proof such as reviews and testimonials.

Planning for a successful Golden Quarter

Staying in tune with evolving shopper expectations, you can position your brand to stay ahead of the curve this Golden Quarter. The businesses that succeed will be those that embrace the innovation of AI while preserving authenticity and trust.

Ready to talk strategy? Get in touch with our experts at IDHL to create a digital experience that drives results.