AI takes the reins: consumers embrace artificial intelligence for holiday shopping, Talkdesk 2024 Holiday Survey reveals

Artificial intelligence-adopting retailers are implementing technology to gain a competitive edge, while non-adopters remain skeptical of artificial intelligence’s impact on holiday shopping experiences

• Artificial intelligence (AI) is transforming the shopping experience. Consumers expect reduced anxiety and increased savings through AI-powered recommendations.

• As adoption increases, 62% of consumers plan to use AI for personalized gift recommendations.

• 3 in 5 retailers using AI have deployed chatbots to support the customer shopping experience (59%) and customer service (58%).

Move over, Buddy. This holiday season, artificial intelligence (AI) is the new helper in town, and it’s not just making a list— it’s checking it twice, finding the best deals, and even picking out the perfect gifts. That’s according to a 2024 Holiday Survey conducted by Talkdesk, Inc., a global provider of AI-powered customer experience (CX) technology that serves retail enterprises of all sizes, which found 90% of shoppers are using AI in some form this holiday shopping season, up from 88% in 2023. Moreover, 62% of respondents plan to use AI-powered product recommendations to provide personalized gift recommendations, proving the future of gift-giving is here, and algorithms, not elves, power it.

Among retailers responding to this shift by adopting AI, 59% of AI-adopting retailers are using it to support customer service. Other AI-based technologies retailers planned to deploy include predictive analytics to identify consumer spending trends (61%), systems to customize product pages and promotions based on analytics (51%), AI-generated product listings or images (49%), and AI-generated product listings that allow shoppers to edit and customize product images (46%) quickly.

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However, not all retailers are jumping on the AI bandwagon. According to the survey, 39% of retailers not using AI are unconcerned about providing a lower-quality holiday shopping experience compared to their competitors that have embraced the technology. Furthermore, 41% of these retailers are not worried about missing out on sales opportunities or losing market share to AI-powered competitors during the holiday season.

Other key consumer findings from the Talkdesk 2024 Holiday Survey included:

• Consumer spending sentiment is high. Nearly 3 in 4 (71%) Americans plan to spend more or the same amount on gifts as in 2023, indicating a positive outlook for the holiday shopping season. For those planning to spend less on gifts, macroeconomic concerns, such as a potential recession, were the No.1 reason for each generation, except Gen Z, which cited personal finance factors (36%), such as increased personal debt, as its biggest concern.
• AI impact on shopping behavior. More than two-thirds (69%) of consumers expect to return fewer products due to AI-guided purchases; this is down from three-quarters (76%) in 2023.
• Happy holiday expectations. 3 in 5 (60%) respondents anticipate reduced anxiety over gift-giving due to AI-powered personalized recommendations, while 62% predict they will be happier around the holidays due to AI-enhanced shopping support. While Gen Z (59%) was the most likely to suffer from holiday shopping anxiety, Baby Boomers (66%) and Gen X (64%) were more likely to believe AI would help alleviate their anxiety.
• Best deals for bargain-hunters. Three-quarters (74%) of consumers expect to save money through AI-powered deal-finding resources. Baby Boomers (81%) held this view the strongest, with Gen Z (69%) holding it the weakest.

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Key findings from retailers included:

• Barriers to AI adoption. For retailers not using AI, the primary obstacles are a lack of worker expertise (57%), data privacy concerns (55%), and AI being out of their comfort zone (52%).
• Divergent retail future. While AI-adopting retailers are expanding their use of the technology to boost sales (55%) and foster brand loyalty (47%), fewer than half of non-adopters (45.1%) plan to invest in AI solutions in the next year, suggesting a potentially widening gap in retail customer experience capabilities.
• AI replacing few employees. For retailers planning to use AI, just a quarter (27.5%) say the technology will enable them to hire fewer seasonal employees. Far more (62%) plan to retrain or upskill their employees to perform different tasks or leverage the technology.

The Talkdesk 2024 Holiday Survey was conducted via the online platform Pollfish in August 2024. It asked 1,500 American consumers and 400 retailers about their perspectives on AI and its role in assisting in the holiday shopping experience.