Tech executives and investors predict that artificial intelligence will dramatically reshape the retail shopping landscape by 2025, with AI assistants offering highly personalized experiences and handling up to 20% of eCommerce tasks, ranging from product recommendations to customer service. Industry leaders from Citi, Google Cloud, and global tech investment firms envision a future where shopping becomes more intuitive, efficient, and tailored to individual preferences. However, they stress the importance of careful AI implementation to ensure security and accessibility.

AI is expected to make shopping feel almost “Black Mirror”-like, with virtual assistants predicting consumer needs with startling accuracy. Lars Nyman, Chief Marketing Officer at CUDO Compute, suggests that AI-driven personalization could lead to eerily prescient interactions, such as a virtual assistant reminding a shopper about hiking boots before a trip. While AI’s ability to forecast demand may help retailers reduce inventory costs by up to 10%, it also raises concerns about data privacy as consumers will expect greater transparency regarding how their data is being used.

As AI technology continues to evolve, it will revolutionize mobile marketing by enabling hyper-personalization, according to Daniel Nguyen, VP and GM of Customer Success at Airship. AI-powered tools will create more personalized mobile experiences and boost customer engagement through location-based targeting and in-app interactions. By automating time-consuming tasks like data analysis and content creation, AI will allow marketers to focus on optimization and strategy.

Arvind Purushotham, Head of Citi Ventures, predicts that AI will move beyond basic product recommendations to deliver highly personalized shopping experiences. Retailers may increasingly partner with AI startups to offer customized perks like individualized discounts and personalized return policies, further enhancing the shopping experience. However, AI’s rise also brings new challenges, particularly concerning online shopping security.

Ariel Tiger, CEO of EverC, warns that AI-powered fraud will become a growing threat in 2025. Fraudsters are using AI tools like ChatGPT to deceive consumers by spoofing product descriptions and images. As the technology advances, regulators in both the European Union and the U.S. are scrambling to introduce new rules to address AI-related fraud, but Tiger suggests that companies lacking real AI expertise may fall behind as the market continues to evolve.

AI is also poised to bridge financial gaps, expanding access to commerce and financial services in industries like construction, agriculture, and manufacturing. However, Amee Parbhoo, Managing Partner at Accion Venture Lab, cautions that algorithmic biases in AI could unintentionally exclude vulnerable groups, such as small businesses or low-income consumers, from the formal economy.

AI is set to drive significant business shifts, according to Google Cloud, which anticipates companies will use AI to process various formats, including text, images, sound, and video, for more natural interactions. AI agents will handle complex tasks and provide consistent customer service across multiple channels, transforming how businesses operate internally and engage with customers.

One of the most anticipated changes is the widespread use of AI agents in eCommerce, where they are expected to handle up to 20% of tasks by 2025. Paul van der Boor, VP of AI at Prosus, predicts that AI will become a key player in eCommerce, with shoppers bypassing traditional browsing to simply tell the AI what they need. This shift will redefine the eCommerce experience and create new opportunities for both buyers and sellers.

Scott Voigt, CEO of FullStory, emphasizes that AI will also leverage digital behavioral data to drive revenue growth by offering deeper insights into customer actions, from website visits to shopping cart behavior. This wealth of data will transform how businesses understand and engage with their audiences, giving them a competitive edge.

While AI’s potential is vast, widespread adoption may face challenges. Steven Sermarini, Senior Director of Data and Advanced Analytics at Radial, notes that eCommerce companies will begin testing AI agents in 2025, but it will take several more years for the technology to fully revolutionize the industry. Scalability, data integration, and trust in AI decision-making are hurdles.

By Impact Lab