Study reveals that next gen shoppers are ready for AI, AR and robots

Global payments and shopping service Klarna released data last week that reveals how retailers will need to adapt to win customers in the future - that means investing in artificial intelligence (AI), augmented reality (AR) and robots, which according to the study “are likely to dominate the in-store and online landscape”, especially fashion retail.

The results are based on an online survey that Klarna conducted in cooperation with research agency Dynata across five countries - USA, UK, Germany, France and Sweden - in April 2023, including a minimum of 1,000 respondents aged between 18 and 77 in each country.

“In the western world, approximately 80 percent of all online purchases are made through search, while the remaining 20 percent are based on personalised recommendations. In contrast, in China, 80 percent of online purchases are driven by personalised recommendations. This study confirms that shoppers in the western world desire a comparable shopping experience, which is now available on the Klarna app feed, powered by AI and purchase history data. The next generation of consumers will expect a highly personalised shopping experience where products find them instead of the other way around,” commented Klarna’s chief marketing officer David Sandström in a press release.

Though no country-specific data was available, the survey’s outcome is quite clear in terms of how technology would change shopping habits 18 years from now in 2041 when Klarna turns 36 and Gen Z consumers turn 40, becoming the dominant consumers together with Millennials. Here are some of the highlights that those surveyed put on top of their wishlists:

Personalisation

Almost two thirds (65 percent) of respondents want the shopping experience to become more personalised in the future, and more than one third (36 percent) is even sure that it will be, both in-store and online.

No more trying on clothes

Consumers seem fed up with trying on clothes physically - having to change in store, trying on different sizes, waiting for changing rooms and so on. Almost half (48 percent) want to use virtual dressing rooms, 28 percent with AR and 23 percent would rely on AI to advise them which clothes best fit their body and fashion style. However, a bit more than half (53 percent) also believe that they would try on clothes the same way as today.

Robots are in

When it comes to fashion advice, “well-mannered robot fashion advisors and virtual personal shopping assistants are in high demand” finds the study. More than half (59 percent) of respondents are open to the idea of a robot approaching them in-store to take measurements and recommend styles, with an additional 18 percent considering it depending on how the robot looks and behaves. In addition, 34 percent want access to virtual ‘personal shoppers’ that can provide recommendations based on their fashion style and taste when they shop online.

AR to the rescue

Augmented reality will elevate the future in-store shopping experience - this is what the vast majority (81 percent) of respondents expect with more than one third (37 percent) even thinking that it would eventually become standard across retail stores.

“We live in times of great transformation and digital acceleration in all sectors of society. The focus, as we all know, is on artificial intelligence and the advantages and disadvantages that this technology will bring, not only to companies and organisations, but also to the end consumer. The future of e-commerce also goes through this, and we believe that it will be strongly influenced by emerging technologies, not only by AI, but also by virtual and augmented reality, and especially by IoT (internet of things),” confirmed Bhupendar Singh, head of D2C and corporate marketing at Samsung.

Real-life shopping is here to stay

It is important to note that virtual reality will not replace the real-life shopping experience. Less than half (43 percent) of the Gen Z'ers surveyed believe that virtual-reality-shopping would surpass the real-life shopping experience within the next two decades.

Cash is out

Almost two thirds (64 percent) of the Gen Z’ers and millennials surveyed agree with the prediction that the majority of physical stores would be completely cash-free in 18 years time, and almost one third (31 percent) of them believe that shift will take place already in five years time.

A circular economy is expected

In addition to technological advancements, the future of the planet and the growth in the circular economy are also at the forefront of consumers' minds. “The younger generations also agree that the circular economy should take a larger share of the total shopping industry and that fashion needs to become more sustainability-oriented in the future,” finds the study.

While 52 percent of those surveyed want more sustainable fashion in the future, 57 percent want the circular economy to take a larger share of the total shopping industry, and around one third believe that they would sell (26 percent) and buy (37 percent) pre-owned items more often.

AI predictions

Last but not least, Klarna asked ChatGPT, the AI chatbot developed by OpenAI, to take the same consumer survey. Here are the results:

• The majority of stores will be cash free in ten years time.
• AR will enhance the real-world, physical store shopping experience in the future
• VR shopping will be preferred to real-world, in-store shopping by 2041.
• Online shopping deliveries will be fully automated, using drones and robots, by 2041.
• Robots and AI will not replace human staff in physical stores.

“Retail and shopping trends have evolved significantly over the last decade and it's clear there are more changes to come. Technologies like augmented reality have the potential to transform rundown physical shops and revamp the in-store experience for shoppers. Klarna's latest research shows that consumers want greater convenience and a more personalised shopping experience - and seamless technology must be at the heart of this,” concluded Kate Hardcastle, British consumer insight expert.