Retailers face a critical challenge in the age of AI: Understanding which of three emerging consumer types deserves their attention and investment today versus which remains largely theoretical.

"Everyone has to be testing and learning, but not reallocating their budget at scale until they have some proof that they're going to be able to get returns for it," said our analyst Sarah Marzano on an episode of "Reimagining Retail,” discussing insights from the Shoptalk conference in Las Vegas.

The conference, themed "AI in Retail," marked a shift from cautious AI mentions to full embrace of the technology's role in commerce. But beneath the hype lies a more nuanced reality about how consumers actually use AI for shopping.

The three consumer types retailers must understand

Our analyst Sky Canaves, who presented at Shoptalk, outlined three distinct consumer types emerging in the AI era:

1. The traditional human shopper continues to drive most retail activity, though with heightened expectations. These consumers are "becoming more discerning, more choiceful with bringing higher expectations and new expectations, both of what they're looking for online and in stores," Canaves said.

2. The human-AI hybrid shopper represents the current inflection point. This consumer uses AI tools and chatbots throughout the shopping journey, particularly in the middle of the purchase funnel for research and product consideration.

3. The autonomous agent shopper remains largely speculative, a future vision where AI agents handle shopping autonomously.

"We like to shop. We like to go and touch and feel in stores," Canaves noted. "More fundamentally, we want to have agency and a sense of control over our decisions and especially how our money is spent."

The middle-funnel sweet spot

AI-assisted shopping currently concentrates in product research and consideration, not discovery or purchase completion.

• Consumers are using AI to engage more deeply with product research, asking follow-up questions and seeking additional information outside AI platforms before making purchases.
• This creates a "middle of the funnel that's potentially more stretched out and covering more sources," Canaves said.

Speaking on her own experience, our analyst Carina Lamb shared, "I used ChatGPT to compare some different options. But then when it actually came to the purchase, I didn't purchase it straight away via a link. I went to a retailer that I know and trust."

Winning in the age of AI commerce

To compete effectively in an AI-shaped landscape, retailers need to zero in on three core priorities:

• Get the basics right. "It comes back to what we always talk about, which is just the real basics," Lamb said. Ensure smooth handoffs between AI recommendations and checkout, particularly on mobile devices.
• Develop proprietary AI tools. Native shopping assistants create opportunities for "more engaging online experiences and what is truly going to be conversational commerce," Canaves said, while providing deeper customer understanding.
• Test strategically. The rapid pace of AI development "puts everyone on a bit of a leveled playing field," Lamb noted. "No one really knows exactly how it's going to unfold."

The key is knowing what success looks like before reallocating budgets. "It's not only to not reallocate budgets, but also to know what you're testing for and what success looks like," said host Suzy Davidkhanian. Success extends beyond sales increases to include traffic and showing up in the right moments of the customer journey.

Amazon's Rufus demonstrates the potential by embedding AI throughout its site and app in different contexts, "promoting this passive AI adoption where customers might not even be aware that they're interacting with AI," Canaves noted.

Listen to the full episode

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