• by Laurie Sullivan  @lauriesullivan, November 27, 2024

Retailers are likely thinking about how they can integrate powerful and predictive generative artificial intelligence (GAI) chatbots into their websites, as well as how to add products they sell into the context of technology from Google, Microsoft, Perplexity, and others.

Generative AI chatbot technology has attracted shoppers, who believe it enhances their shopping experience. Two in five plan are planning to use GAI chatbots for their holiday shopping this season, according to Adobe Analytics data released today.

Adobe surveyed 5,000 U.S. consumers in September 2024 and found 7 in 10 respondents who have used GAI for shopping believe the technology enhances their experience.

About 20% of consumers said they use GAI to find the best deals, while 19% said GAI chatbots help them to quickly find specific items online and 15% say they use GAI to get recommendations about brands, Adobe data finds.

The data -- collected and analyzed by Adobe Analytics from November 1-November 24 -- found chatbot use rose 1,700% compared with the same period in 2023.

While the large increase is partly the result of a small U.S. consumer user base, it shows consumers are increasingly interested in using chatbots to shop online.

The use of GAI is expected to contribute to Adobe's explosive Cyberweek online sales forecast. Cyberweek -- the five-day period that includes Thanksgiving, Black Friday and Cyber Monday in the U.S. -- is expected to drive $40.6 billion in online spend, up 7.0% year-over-year (YoY), and represents 16.9% of the overall holiday season.

Adobe expects Cyber Monday to remain the season’s and the year's biggest shopping day, driving a record $13.2 billion in spend -- up 6.1%YoY.

Black Friday should reach $10.8 billion, up 9.9% YoY, and Thanksgiving Day is projected to hit $6.1 billion -- up 8.7% YoY. Both are expected to outpace Cyber Monday in growth YoY, as consumers embrace earlier deals promoted by U.S. retailers. 

Consumers are shopping and many are trading up this holiday season, with purchases of "expensive goods" rising 15.1% compared with the first 24 days in November as consumers embrace everything from bigger TVs to more advanced washing machines, according to Adobe Analytics data released Wednesday.

In the first 24 days of the official holiday season, overall consumer spending rose 9.6% YoY to $77.4 billion online.

The U.S. ecommerce data -- released just prior to the major holiday weekend -- analyzes more than 1 trillion visits to U.S. retail sites, 100 million SKUs, and 18 product categories. Adobe found discounts for electronics peaked at 10.9% based on the list price, but discounts are expected to hit 30% on Cyber Monday.  

Most consumers are buying electronics -- up 11.4% YoY  to $17.7 billion. The two categories have outpaced electronics in terms of YoY growth, including apparel at $14.5 billion, up 13.4% YoY; and groceries at $7.5 billion, up 16.8% YoY.

Other categories with notable YoY growth include furniture and bedding at $9.5 billion -- up 7.2% YoY -- and cosmetics at $3.2 billion -- up 10.1% YoY.  

Adobe expects retailers on Thanksgiving Day to offer the biggest discounts for toys at 27%, appliances at 18%, furniture at 19%, and sporting goods at 20%.

Consumers should see the biggest discounts on Black Friday for television sets, at 24%.

Retailers on Saturday are expected to offer the best bargains for computers at 23%, and on Cyber Monday consumers will see the best deals for apparel at 23%.

Strong consumer spending online continues to be driven by new demand and not higher prices, Adobe reported.

Adobe’s Digital Price Index shows ecommerce prices have fallen consecutively for 26 months -- down 2.9% YoY in Oct. 2024.

The data is not adjusted for inflation, but if online deflation was factored in, growth in consumer spend would be even stronger.