Why AI is the Best Way for Search Technology to Meet Customers' Evolving Expectations

In a rapidly evolving digital landscape, search is essential for large enterprises. Early search engines worked as keyword retrieval engines but have since evolved into semantic search engines as customer searches have become broader and less focused on exact words. Retailers continuously personalize their search engines based on customer preferences and engagement patterns. Now, the explosion of generative artificial intelligence (GenAI) and large language models (LLM) like Llama, Mistral, and GPT-4 have transformed how every sector thinks of search. Customers expect to find exactly what they seek without articulating or knowing precisely what to search for. To stay competitive, it’s imperative for retail companies to invest in GenAI-powered search technologies and adapt to the new ways that customers are shopping.

Technology Transformation

Early search engines were only capable of keyword matching and couldn't understand any linguistic context. Google’s PageRank algorithm was the first attempt at determining a web page’s value and accuracy to provide better results. Over time, semantic and natural language search abilities improved, and the advent of smartphones allowed for additional context, such as location and personal preferences.

Today, GenAI and LLMs have enabled search engines to recognize increasingly complex language and visual information. In addition to conversational text-based search, users can now use voice and image search. For example, Google recently introduced Circle to Search, allowing visitors to circle, scribble or tap any item, image or text on their screen to search. And, as search functionality has expanded, so has the online retail market.

A Paradigm Shift

Both customer desires and how they shop have shifted in recent years. Online retail spending is a growing market that shows no signs of stopping. A Forrester report predicts sales will grow to nearly $7 trillion by 2028, almost doubling the $4 trillion spent in 2023. Shopping journeys are increasingly beginning on Instagram, Facebook, and TikTok rather than an e-commerce platform, driving the growth of so-called social commerce.

Customers now expect accurate and personalized results and the ability to search in multiple ways, through voice, image or text. As chatbots and digital assistants like ChatGPT, Siri, and Alexa have become more common, customers increasingly expect quality, round-the-clock assistance. Retailers unable or unwilling to provide this experience risk losing customers to those that are.

Adopting and Adapting

Several large retailers have already started rolling out GenAI-powered search. Last year, Instacart announced the AI-powered Ask Instacart tool, and earlier this year Amazon.com unveiled Rufus, its AI shopping assistant. Walmart has an AI shopping assistant with Text to Shop and its Walmart Voice Order features. Both Walmart and Target are also leveraging AI to support employees. Walmart created Ask Sam, its voice assistant, and Target recently began rolling out the Store Companion chatbot to its team members.

While AI-backed search can help retailers stay competitive, caution is warranted. Because of how LLMs function, the University of Washington describes them as sophisticated “next-word predictors” that “generate responses based on the patterns they learn from the training data.” Because of this, LLMs can inadvertently reinforce biases and stereotypes within data or generate false or absurd answers called hallucinations, which drew attention to Google’s AI Overview feature earlier this year. Effective implementation of AI-powered search requires awareness and prevention of these potential issues.

Still, as customer expectations for search technology evolve, retailers that hesitate to embrace this paradigm shift risk being left behind. It’s critical for retailers to clearly identify the objectives of any technology adoption and keep sight of the customer problem they seek to solve — the best solution may be simpler than expected. To stay relevant and successful as customer demands, emerging technologies, and business needs change over time, it’s vital for companies to remain agile. Flexibility, focus and thoughtfulness are the keys to successfully keeping up with technological advances.

Nitin Baliga is a senior director of product at a top five e-commerce retailer with more than 15 years of experience in product management, retail, strategy consulting, and technology.