A common misconception among tech enthusiasts is that e-commerce has fully taken over the retail landscape. Despite the significant growth in demand for online stores this past decade, global in-store sales still accounted for about 75% of the total market share in 2024. Even though e-commerce is growing and becoming an integral part of the retail ecosystem, brick-and-mortar retail still remains dominant. Nevertheless, the recent integration of AI agents is proving to be a key factor in helping online businesses attract more customers and redefine the retail experience.
Approximately 72% of consumers continue to shop in physical stores on a weekly basis. One of the main reasons is because they crave a tangible shopping experience. Many shoppers prefer to see, touch, and try products before purchasing. This fosters trust and confidence in the consumer. While browsing through online stores, replicating that same experience is difficult; however, similar to how an employee can guide shoppers and build their confidence towards making a purchase, AI agents such as chatbots and personal shopping assistants are now providing new ways to handle customer traffic and engagement – leading to a notable record sales growth.
During the holiday season of 2024, U.S. consumers spent $241.4 billion on online purchases, up 8.7% from the previous year. AI agents played a significant role towards this growth, boasting traffic driven by chatbots to a 1,300% increase compared to 2023. Moreover, advancements in AI contributed to a 10.2% YoY increase in Black Friday shopping as chatbots experienced a 9% higher conversion rate (Barron’s). At a more microeconomic level, a small German company named Photobooth Deluxe has automated over $100,000 in revenue through a Messenger chatbot. The fashion e-commerce brand ILTHY achieved similar accomplishments by using an Instagram chatbot to run a 10% discount campaign, generating over $2,300 in sales with a 22% increase in conversion rate during the bot’s first month.
Therefore, AI agents are cost-effective tools that can also benefit smaller businesses and not just the greater economy as a whole. Customer service chatbots like Shopify’s Kit have proven to successfully handle up to 80% of common customer queries. These agents can reduce response times and improve the shopping experience while providing 24/7 automated support without the need to expand staff. Agents can also streamline operations and save costs. Inventory management tools like QuickBooks Commerce use AI to forecast demand, helping businesses avoid costly overstock or prevent stockouts. By leveraging these tools, AI agents can enable businesses to effectively compete in the digital marketplace while achieving impressive growth.
Beyond efficiency, AI agents are also helping e-commerce replicate elements of the in-store shopping experience that customers value most. Virtual assistants, such as Sephora’s Virtual Artist, allow customers to try on products like lipstick or eyeshadow through augmented reality. Similarly, AI-powered agents can provide real-time, tailored guidance, much like an attentive in-store employee. For example, H&M’s AI agents use data from customer interactions to suggest outfits tailored to the individual, which helped boost customer satisfaction and repeated purchases. According to a 2023 survey from Salesforce, 62% of customers felt more loyal to brands that provided AI personalized shopping experiences. These technologies not only build confidence in purchasing decisions but also eliminate a major advantage brick-and-mortar stores traditionally hold over e-commerce.
As agentic behavior can adjust to personalize for every customer’s individual needs, AI agents can build a sense of trust and reliability in the customer experience. Adopting AI agents to enhance efficiency, personalization, and engagement positions e-commerce as a formidable competitor to brick-and-mortar. The potential for AI agents to attract consumers who desire a tangible shopping experience is here and continually expanding. With AI-driven insights and capabilities advancing rapidly, e-commerce has the potential to redefine the retail experience, delivering personalized, scalable, and immersive shopping journeys. As AI agents become more intuitive, they could not only rival but surpass the tangible appeal of brick-and-mortar stores – paving the way for a retail revolution.