Why GenAI is Ushering in the Next Level of Product Discovery for Shoppers

While generative artificial intelligence (GenAI) reached peak hype and is on the radar of nearly every retailer, it hasn’t yet been employed widely by shoppers, mostly due to fear of hallucinations or perhaps because brands prefer to avoid introducing steps that could distract shoppers during their buying journey.

However, this could all be changing according to our 2024 Commerce Industry Report, based on a survey of 4,000 consumers in the U.S. and U.K. conducted in partnership with Arlington Research. We found that 72 percent of consumers expect their online shopping experiences to evolve with GenAI, which points to the potential to completely transform the shopping experience — improving product discovery and, ultimately, average order value (AOV) and revenues.

The Transformation of Product Discovery With GenAI

Product discovery is a big influencing factor in the online shopping journey. Brands that excel at it fare better with customer loyalty than brands that are struggling with delivering a relevant experience in the early stage of the shopping journey. In fact, our report findings point to the significant impact that easily finding products and content has on the perception of the retailer for the majority of consumers. More than two-fifths (44 percent) said finding what they're looking for in just a few clicks would have the most impact on their perception of a brand. An additional 18 percent of respondents said that their perception of a brand would be most positively impacted by the ease of finding supporting content such as manuals or instructions, indicating the significance of delivering robust customer experiences and discovery to more than 60 percent of consumers overall.

Another interesting finding in our research was the connection between GenAI and product discovery, specifically with regards to pre-purchase education, with 37 percent of respondents expecting pre-purchase education on products and attributes, and 31 percent expecting a virtual assistant to help guide them on product selection. While many brands are in the GenAI research phase, we've seen a great deal of interest from retailers in using generative answering as part of the product discovery journey, largely because GenAI can already successfully answer questions based on rich content. The key is to integrate these types of interactions across the entire product discovery experience with customer-specific context on product page views, AOV, units per transactions and even conversion rates, driving higher revenue per visit. The value for retailers extends well beyond access and delivery of obfuscated information, and all the way up to trusted advice and insight into real-time transactions.

As GenAI’s role continues to become more prominent in commerce overall, shoppers may start expecting this concierge-type element for every purchase, similar to the in-store format, to help them identify what they're looking for at the online storefront in order to maintain their engagement and perhaps even loyalty to the brand. This tracks with our finding that 91 percent of respondents expect their online shopping satisfaction to match or surpass in-store experiences. Currently, 49 percent of shoppers state they still encounter problems online, so there’s still much room for growth, which in all likelihood integrations with the right GenAI technologies will help remedy.

Social Media Also Key to Product Discovery But Not Driving Conversions … Yet

While the top social media platforms have huge numbers of active users — Instagram (2 billion users) and TikTok (148 million users in the U.S.) — social commerce hasn’t taken off just yet. Retailers' websites are still driving the large majority of conversions, according to our report findings. Close to two-fifths (39 percent) of respondents stated that they often/always come across products that catch their interest when browsing social media platforms, a figure that increases to over half (55 percent) for Gen Z. However, only 14 percent of shoppers said they complete their purchase through that same channel.

Brands shouldn’t ignore the potential for customer engagement that social media platforms offer; they should employ these channels as a way to pique consumer interest, driving them to explore their product offerings, and more.

Final Thoughts

The GenAI hype cycle may die down, but we see great potential for it in retail applications, benefiting consumers by delivering a more efficient shopping journey and increasing customer satisfaction. Brands also stand to gain from GenAI’s ability to reduce website bounce rates and product returns through better and more relevant product discovery, ultimately increasing customer engagement, loyalty and profitability.

Simon Langevin is Coveo’s vice president of product, commerce.