AI is reshaping retail search: what this means for your brand

Ben Miller

VP, Original Content & Strategy, Shoptalk & Groceryshop

The retail industry is heading into uncharted political and economic waters amid changing shopper behaviours and how products are discovered and bought. These shifts offer a real opportunity.

At Shoptalk, we’re excited about the possibilities. Because we’ve never known so much about our customers before, at such scale, or had the computing power and tools to transform this data into insights and actions. We’ve never had so many different routes to get our products to consumers, or had so many ways to influence consumers.

There are three key dynamics
we feel all retailers and brands
need to be paying attention to.

Physical transactions and digital discovery

There are three key dynamics we feel all retailers and brands need to be paying attention to amid this change. The first is the recognition that for the majority of retail sales, the point of transaction will continue to be in physical stores. While discovery and influence increasingly occur online, physical retail remains far from dead.

An EMARKETER survey late last year showed that just 18% of shoppers in the five largest European retail markets begin their product searches in a physical store. Now, over 20% have bought directly from a social media platform.

AI disrupting search commerce

The second dynamic is how search is changing. The AI disruption of search is already underway, with Gemini-powered AI Overviews in Google present in over 100 countries to over 1 billion global users a month, impacting SEO and search spend.

This spring, generative AI like ChatGPT and Perplexity are adding purchase options to search results — unaffected by sponsorship — raising urgent questions about how to influence AI-driven shopping decisions.

Engaging, efficient retail hospitality

The third dynamic is the requirement for physical stores to be both engaging and efficient. Delivering either-or is not possible in the battle to manage costs and retain shopper loyalty. We’re tracking increases in spending and investment in in-store technologies to drive efficiencies, simultaneously with more widespread personalisation, clienteling and retail experiences — a trend we call retail hospitality.

Amid daily pressures, it’s tough to find the time, space and focus needed to navigate today’s dynamic market. That’s what we’ve created Shoptalk Europe to help you do.