This year, holiday shopping is getting a high-tech upgrade as more consumers turn to AI platforms like OpenAI’s ChatGPT to assist with gift buying. Estimates suggest between 40% and 83% of shoppers are using AI for shopping this season, driving a surge in AI traffic to retail sites.

AI is expected to drive $263 billion in global online holiday sales this year, representing 21% of all holiday orders. Retailers are seeing 30% more purchases and 14% more engagement from shoppers arriving from generative AI platforms, leading to 8% more revenue per session.

Major retailers like Walmart, Target, and Etsy are joining the AI race by partnering with OpenAI to integrate chatbots into their shopping experience. Walmart has announced a deal to allow shoppers to find and buy items within ChatGPT, while Target’s beta feature lets customers shop within their app.

While AI shopping is on the rise, some consumers still prefer traditional shopping methods. Brands are adapting to the shift by investing in AI shopping experiences and adjusting their strategies to reach customers who are using AI to discover products. Retailers are navigating the transition from traditional channels to AI platforms to stay visible to consumers. Amazon is blocking external AI chatbots from crawling its website to prevent them from pulling in product listings. Walmart, Target, and Amazon have built their own AI chatbots. Walmart’s Sparky can recommend products, while Amazon’s Rufus helps shoppers. Target’s Gift Finder is driving higher engagement and larger shopping carts.

Retailers are overhauling digital marketing strategies, moving away from traditional SEO methods. AI platforms like ChatGPT allow consumers to provide detailed product requests, leading to more personalized search results. OpenAI’s ChatGPT prioritizes results based on the shopper’s request, not on paid placement. Retailers are adapting by providing richer product descriptions for AI platforms.

Brands are reformatting their websites to be more AI-friendly, focusing on detailed product listings and customer feedback. Target is enhancing its visibility on AI platforms by providing unique product features and trends. Ethique Beauty has seen a 90% increase in traffic from AI platforms by focusing on consumer needs like scalp health. Retailers are adapting their content to meet the demands of AI platforms and provide more detailed information to consumers. Ethique, a sustainable hair care brand, improved its customer experience by addressing common hair concerns and providing detailed product information. This strategy led to increased sales and website traffic. However, optimizing for AI search required a significant investment in staff and consulting services.

While AI platforms can be helpful for product research, they may not always provide accurate recommendations. Target’s Gift Finder chatbot, for example, struggled to give specific product suggestions. Some consumers, like startup founder Diana Tan, prefer the traditional shopping experience over AI assistance. Tan found the AI recommendations repetitive and unhelpful, leading her to abandon the service.

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1. Apple Inc. reported a 54% increase in iPhone sales, beating expectations with $89.6 billion in revenue for the quarter.

2. Tesla announced a record profit of $438 million for the first quarter, driven by strong sales in China and increased production efficiency.

3. Amazon reported a 44% increase in net sales, reaching $108.5 billion for the quarter, exceeding analyst expectations.

4. Facebook’s revenue jumped 48% to $26.17 billion for the quarter, driven by a surge in digital advertising demand.: AI ChatGPT holiday shopping drives sales, Walmart, Target join in