The GENerAtIonal Effect on E-Commerce

By: Sherlene Hiu
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As AI continues its rapid expansion across various sectors, it has notably transformed retail, shifting from traditional in-store shopping to e-commerce. This transition has made products and services more accessible and user-friendly for consumers. The emergence of GenAI prompts in e-commerce, coupled with Gen Z’s preference for online shopping, creates an engaging and dynamic buying experience, further intertwining the two realms.
Retail has expanded notably in recent years, especially pre-COVID, with a significant increase in online shopping. According to the latest study by Juniper Research, retailers are projected to reach nearly $7 billion annually in 2022, with further growth anticipated. Gen Z’s embrace of GenAI for marketing is a key driver behind the rapid growth of e-commerce.

Gen Z’s tech-savvy nature enhances e-commerce, making online shopping enjoyable. Their penchant for uniqueness drives consistent purchases aligned with personal tastes. They value creativity and originality in their preferences. User-generated content (UGC) significantly influences their decision-making process, as they find creating their own media interesting. Peer influence plays a crucial role in shaping marketing strategies. According to Sreepada, Gen Z’s collective purchasing power exceeds $143 billion globally, with 2.56 billion members, providing ample opportunities for them to leverage. However, they prioritize values such as environmental sustainability in their consumption choices.
GenAI revolutionizes e-commerce by leveraging its recommendation prowess and product introduction capabilities. Its algorithms influence customers’ preferences and purchasing choices, revealing their true desires. By collecting and analyzing data on individual interests and buying histories, GenAI enables merchants to tailor offerings to suit each customer’s taste. This streamlined shopping experience not only benefits consumers but also boosts sellers’ CPC and CTR, driving increased customer traffic to their platforms.
GenAI simplifies product discovery through online interfaces, making it easier for users to find new items. E-commerce platforms increasingly integrate AR and VR technology, enhancing the visual experience and attracting customer attention. Social media giants like TikTok and Instagram now feature in-app shops, tapping into the lucrative e-commerce market. Users are drawn to these platforms for shopping, leveraging influencer marketing and advertising to maximize profits. The evolving role of AI continues to reshape the e-commerce landscape.
While GenAI greatly enhances e-commerce, it raises valid concerns about customer privacy. Continuous data collection for feedback purposes may alarm customers about the safety of their information. Payment fraud is among the potential risks associated with this system, highlighting the need for robust security measures.
The connection between GenAI and Gen Z is seen to become more relevant in the making of e-commerce, and those who often shop are likely to contribute to the AI’s algorithm. Those in Gen Z account for their shopping behavior, which in turn reports back GenAI to make e-commerce better. Without the physical barriers and having the ability to do online transactions easily, the standards and expectations for e-commerce are seen to be prominent in the making.
Reference:
Sreepada, R. K. (n.d.). Swipe, shop, repeat: Exploring Genai’s influence on e-commerce. Retrieved