Shifts: Automation, financial inequality and social commerce

AI and automation: Artificial intelligence and automation are being deployed to gain efficiencies throughout the shopping ecosystem and to enhance the shopper experience, both within e-commerce settings and within traditional brick and mortar locations.

AI curation is poised to increase as more sophisticated predictive algorithms analyze consumer data and past behavior to offer tailored suggestions that can aid in choice. Also, AI-backed chatbots can give life to a brand 24/7/365, aiding in service and engagement. Automation can also streamline supply chains, reducing costs and improving efficiency, which can lead to lower prices for consumers.

Inequality: Wealth inequality, which has grown significantly around the globe, is having profound impacts on shopping trends and behaviors. People with more disposable income tend to invest in more premium products and experiences, driving the number of luxury brands. Conversely, those with limited resources often prioritize cheaper options, boosting demand for discount retailers and used goods. But they may also choose more expensive brands they’re confident will perform to minimize risk. The rise of “buy now, pay later” platforms has helped younger shoppers and those with less income finance purchases without the need for traditional credit cards. However, the industry is coming under scrutiny.

Social influencers: Social commerce, the intersection of social media and e-commerce, is reshaping shopping experiences as more people use platforms like TikTok to discover, share and purchase products directly. In the U.S., this blurred line between socializing and shopping is just starting, but is prominent in markets like China, making shopping more seamless and engaging for customers. Brands can use content created by users and influencer endorsements to enhance their marketing, but not without reputational risk as they use more brand ambassadors. Shoppers often trust influencers more than a traditional brand ambassador as understanding their audience can be very influential.

For further reading

• What the Future: Manufacturing
• How to make tech advances feel more personal to purpose shoppers
• Americans have mixed feelings about automation in the workforce