New AI Shopping Bots Surge Ahead of Holiday Season, Recommend Gifts

UPDATE: New AI shopping assistants are transforming online gift shopping just in time for the holidays, as consumers are projected to spend a record $253 billion online this season. Major players like Amazon.com Inc. and OpenAI have unveiled innovative tools designed to enhance the shopping experience, making gift selection faster and more personalized.

Tech giants are racing to capitalize on a shift in consumer behavior, moving towards agentic commerce, where AI-driven tools assist with product research and purchases. A recent September 2023 survey by Adobe Inc. revealed that over 1 in 3 U.S. consumers have already utilized AI for online shopping. According to consulting firm McKinsey & Co., this sector could balloon into a $1 trillion industry in the U.S. by 2030.

The urgency of these developments is underscored by the growing frustration many shoppers feel when navigating countless products online. As Emily Pfeiffer, an analyst at Forrester Research Inc., stated, “There are a lot of really big bets being made right now that consumers want to shop differently.” However, she cautioned that the full impact of these tools may not be felt this holiday season.

In a recent experiment by Bloomberg, AI shopping bots, including Amazon’s Rufus, OpenAI’s ChatGPT, and Walmart Inc.‘s Sparky, were asked for gift recommendations for moms. The unanimous top suggestion: a cozy bathrobe. Sparky recommended a pink hooded bathrobe adorned with “Mama Bear,” while ChatGPT suggested a model from Victoria’s Secret.

While these AI tools are promising, they are still in a developmental phase. Amazon’s CEO, Andy Jassy, recently expressed skepticism about AI’s current ability to tailor shopping experiences effectively. Bots often struggle with inaccuracies in pricing and delivery estimates, leading to consumer frustration.

Retailers have traditionally designed their websites for human browsing, which complicates interactions with AI tools. Current shopping bots mostly aggregate product listings, directing users to retailer sites without significant advancement in the shopping process. This limitation highlights the need for improved technologies capable of facilitating direct transactions.

In response to these challenges, companies like Anthropic PBC and Alphabet Inc. are developing protocols that enhance communication efficiency between AI agents and retail catalogs. Microsoft is also introducing tools to help retailers adapt their websites for better AI interaction.

Despite these advancements, the effectiveness of AI shopping bots largely depends on the quality of the data they access. Retailers, including Amazon—capturing 40% of U.S. online spending—are protective of customer data that could enhance AI capabilities. Significantly, Amazon has recently filed a lawsuit against Perplexity Inc. to halt its shopping assistance features, fearing that such tools could disrupt its lucrative advertising model, projected to generate $70 billion this year.

Amid these competitive dynamics, Walmart has embraced collaboration, allowing shoppers to purchase items directly through ChatGPT. This feature is gradually rolling out and initially limited to single-item purchases, indicating a cautious but progressive approach to AI-assisted shopping.

As AI tools evolve, user experience remains a focal point. OpenAI’s latest shopping tool engages users by asking clarifying questions, enabling a more tailored search experience. Users can describe their needs, and the tool will suggest multiple items, refining recommendations based on user feedback.

Yet, users are advised to verify details directly on retailer sites, as OpenAI warns that its tool may not always provide accurate product information. This ongoing evolution of AI in shopping underscores the potential for a more intuitive and user-friendly experience in the future.

As the holiday shopping season approaches, consumers are encouraged to explore these new AI tools while being mindful of their limitations. The landscape of online shopping is shifting rapidly, and while the tools are still maturing, their presence is likely to reshape how we approach gift-giving in the years to come.