[00:00:00] Welcome to Unpacking the Digital Shelf, where industry leaders share insights, strategies, and stories to help brands win in the ever-changing world of commerce.
[00:00:21] Hey everyone, Peter Crosby here from the Digital Shelf Institute. AI adoption and shopping is growing steadily, though demographic variations in this trend may influence where brands prioritize their investments. That's why Nielsen IQ and the DSI teamed up on a combined report featuring consumer attitudes about AI and commerce, and brand leaders POV on how it is impacting their work and investments.
[00:00:45] Jason Hein, Director, eCommerce Strategic Insights at NIQ, joins with the Consumer Numbers, and our own Lauren shares the brand data for a holistic view of the trajectory of AI in commerce. Welcome to the podcast, Jack. We are so happy to have you on. Awesome. Awesome. Yeah, thank you, Peter, for having me. Excited to be here.
[00:01:05] You know, I believe you are called, what is the term? A data nerd. A data geek. Which do you prefer? And is it true? That is true. That is fair. I work at an organization that is all about data. Yes. At Nielsen IQ, we're tracking trillions of data points around the world, looking to understand, you know, consumer and retail activity and behavior.
[00:01:32] So it's part of my role and my privilege to really be a data nerd, like you say, and dive into that data and see what it's telling us about what's happening in the landscape. So data nerd for sure over here. Well, it's so important. I mean, the world is changing so quickly. And how things are working, what journeys look like, what consumers are thinking, and then what brands are thinking is so important.
[00:01:55] And you and the DSI recently teamed up to do a report that kind of gives a perspective on both of those audiences and how it's affecting commerce when it comes to AI. And so we just want to dig right into it. You spent time on the consumer sides of things. So where are you seeing sort of how consumers are letting AI into their daily lives? Yeah, I think it's concerned, of course.
[00:02:21] Absolutely. Absolutely. I think it's the important topic of 2026 as we think towards the future, how the shoppers path to purchase might shift and change. AI is the big impact there. And, you know, as I said earlier, at Nielsen IQ, we have the privilege through a variety of our different data sets and analysis products to really have a front row seat to how the consumer is feeling about AI, how they're adopting it.
[00:02:44] I think in doing this study with DSI here and bringing kind of the consumer lens, one of the things we have the privilege to see was just how much consumers are already adopting AI generally. When we pose the question to consumers, are you using AI tools generally at least monthly? Over two thirds of consumers said that they are. They're using it at least monthly. And, you know, 18 percent say they're utilizing generative AI in some sense daily.
[00:03:12] And then I think for us kind of in the e-commerce, retail, consumer goods space, the natural double click from there is how many how are consumers utilizing AI for their shopping journeys? And we then posed a question to consumers asking how interested they are in having generative AI helping them research and purchase products. And we're seeing that already half of consumers, 49 percent, are interested to some degree in having AI be a part of their product purchase journeys here.
[00:03:42] And to me, I think in a space that's so new and still is building out the capabilities to see that level of interest and appetite from the consumer out there indicates that this is something that is, you know, not a shiny object, is here to stay and will be deeply impactful on how shoppers go out and find the products and purchase them that they need. And Jack, just to clarify, is this U.S.? Is this global? Where did this data come from?
[00:04:07] In this data set specifically, we were looking at the U.S. only, but, you know, we're a global organization and we're seeing similar adoption rates. You get some country to country nuance around comparable markets around the world. Yeah, it's one of the fastest adoption rates of any technology, I think, ever in this short amount of time. Yeah, it took SAPT five days to reach a million users. It took TikTok six months and the Internet four years. Wow. There you go.
[00:04:37] Yes, indeed. So, Jack, the data that I really loved from the survey was also demographic because I think we all know that consumers are using AI. They want to use AI from a shopping perspective, potentially from like a purchase perspective. But who is using it and how are they using it? So from a demographic standpoint, what kind of came out of the data to help brands think about like where they should focus their time? Yeah, absolutely.
[00:05:06] You know, if I was a large CPG brand organization, I'd be understanding like what consumer I'd be seeking to understand which consumer cohorts are the most adopting of this, who were there first to help me understand, you know, what is the context of the conversations happening around my product categories in AI tools? And one thing that stood out in the data demographically was when we looked at household income, we actually saw that upper income households were higher adopting than lower income households.
[00:05:34] We saw that higher income households defined in this case here of households having 100,000 or more in annual earnings here had a 60 percent level of some interest in utilizing generative AI for shopping here. Comparing that to the earlier stat earlier, we're seeing around 50 percent of households generally are interested. So that's a fairly big differential there.
[00:05:58] And then when you compare that to lower income households, so households earning under 50,000 a year, our data said that the interest level is around 39 percent. And I think that that really reflects and mirrors what we saw for e-commerce generally and e-commerce's adoption over the past few decades here. And, you know, certainly you hear from a lot of retailers in their quarterly earnings and the way they discuss e-commerce and omni-channel is it can be a vehicle into higher income households.
[00:06:26] And these are just, you know, places and these are consumers that tend to be more adopting of these technologies that bring more convenience and ease to their shopper journeys at a faster pace. I do think that this is going to come kind of across the board, across income spectrums. But that's one learning there was high income households was leading the way. I think also an interesting call out is, you know, across demographics, we were really interested to understand, like, how are shoppers utilizing generative AI in these shopping journeys?
[00:06:55] There's a lot talked about about agentic. So this idea that you have an AI agent that does maybe the full purchase journey for you and actually buys the product. I think it's great to prepare for that future, but we're not necessarily there yet. We saw only 8% of consumers are interested in having generative AI actually purchase a product for them.
[00:07:14] But the use cases that are really meaningful are things like research products, summarize, review, recommend brands across demographics, across, you know, income levels, gender, generation, what have you. Those more AI as an assistant journeys are really the top use cases we're seeing for this tool today. And so I think that's, you know, an interesting learning for brands as well in thinking about how this technology is being used.
[00:07:41] And I think it's also impactful for brands to really think about, okay, who's my target consumer? Where are they shopping? Like, are they shopping at a Walmart? Are they going to use Sparky? And Sparky is now available on desktop and on mobile. Like, or are they shopping on Amazon? Are they going to use Alexa shopping? Like, how are they going to interact with these tools? Is that something we should focus on from a strategy perspective?
[00:08:03] I just think it helps kind of give you a little bit of a compass as to where to spend your time knowing that you kind of need to prioritize. And sorry, Peter, go ahead and add. I know you wanted to add something. Oh, no, that's okay.
[00:08:17] What I was thinking was that given the way the trends are going to integrate sort of the agentic shopping experience into the foundational experience like Alexa and what they're doing to just, you can't, you almost won't be able to avoid it. You know, right now you're having to make a very specific choice, especially if you're going to use an LLM. I'm going to go there and do this thing.
[00:08:42] But now it's being so integrated on some of the retailer sites that it just, it's what you're going to, it's how you're going to shop because it converts better and gives better results. But so I think it would be interesting to see how that all evolves over time as well. Yeah, Peter, I can only echo you. And I think that is definitely the direction we're heading.
[00:09:04] I think as the retailers become more assured that their, one, their AI tools like Alexa for Shopping or Sparky are working, you know, correctly for the consumers. And two, the consumers are really resonating and enjoying these tools. I think we'll start to see a harmonizing of the search bar and the AI agent. I actually recently, you know, as a consumer myself, had a search for a somewhat complex category on Amazon.
[00:09:30] I was looking to find basically a system to make my, one of my cabinet fronts, a pullout drawer for a garbage can. And it actually, I, you know, I typed in the search bar, my query, and it immediately moved me to Alexa for Shopping versus giving me a traditional, you know, Amazon search page of results here.
[00:09:50] And so I think we're going to reach a future where, you know, these tools are actually just, you know, naturally embedded in the traditional search journey for a lot of consumers, for a lot of categories and shopper missions. I think that's a great point, Jack. I was actually at an event a couple weeks ago, and there was a panel of brands, and we were talking about AI. And someone asked one of the brands, like, do you think that people, like, everybody's actually using AI? Or, like, are they going to, like, rebel against it or they don't want to use it?
[00:10:19] And one of the brands answered, and she was like, everybody's using it whether they know it or not. So, like, when you go on Google, most people are reading the AI summary first, right? So you're using AI whether that, whether you know it or not. So I think it's a really great point that it will become so ingrained in everything we do. And we also kind of dug into generational information, data and information, which I thought was interesting. So millennials versus boomers, who is interested in it?
[00:10:46] And I'm actually surprised by, like, who actually likes AI versus who doesn't. So, Jack, let's dive into that one. Yeah, absolutely. So the generational breakdown, you know, it did skew younger, which maybe is expected. But the peak maybe is maybe a little unexpected. In terms of interest, millennials was actually the top interested generation in the work we did. So 62% of millennials said they had interest in AI being a part of their research and purchasing of a product.
[00:11:14] They were followed by Gen Z, so the youngest generation here, which many maybe would argue would be the top generation, but wasn't the case in our survey. 51% of Gen Z said they'd be interested. And then, you know, Gen X was next. And in kind of the rear here are baby boomers. Only 31% of that generation said they'd be interested in having generative AI research and purchase a product. You know, two caveats on this.
[00:11:37] One, just because you're not necessarily indicating in a survey response you're interested in AI being a part of your shopping journeys of researching and purchasing products, doesn't mean you're not using generative AI in other parts of your life and therefore could be converted to using it for a shopping journey later. And two, I think, Lauren, your point is so true. I think many of folks across all these generations and maybe even, you know, particularly in some of the older ones,
[00:12:04] are not even realizing many of the use cases in their Google searches or Amazon search bar searches that are already powered by AI. And naturally, that will be a forcing function to them adopting it long term. And it'll be more natural than they would indicate in the survey here. But, you know, definitively, you know, some interesting trends here we're seeing across the generations in terms of interest in this. I'm kind of proud of the baby boomers. You know, sort of the get off my lawn generation is like sticking to their guns.
[00:12:33] You're not going to take over my life. But I think they'll end up there, too. But what I find actually interesting, and I was talking to someone the other day about this, too, is that Gen Alpha and Gen Z actually don't like AI as much as I would have expected. Right. Right. So a lot of them are kind of like, we don't. Well, that, yes. But also, they're like, we don't want it. It's not real.
[00:12:57] Like, we also want to go in store and like, we want to go back to the malls and like, we want to have these like, authentic, like in-person experiences. And I don't know if I would have expected that to be the case. I would have thought that there were like heavy users of AI. But I was talking to someone who has kids and they were like, we, the kids hate the AI. They don't want to use it. They don't have any desire to kind of engage with it. So you can see both sides of the spectrum, but I think it's quite interesting where we're pushing kind of that generation after being so digital.
[00:13:27] Yeah, I would totally agree with that as well. Sometimes I think what we expect in terms of age correlation to technology adoption, sometimes what is the reality actually is not what we would expect in many cases. Well, if you think of what those generations, I mean, the upheaval in society and technology and COVID, like all of it.
[00:13:51] I can imagine, you know, the need for connection, which I hope they were denied it for so long. And that now that maybe they, you know, although they spend a lot of time on screens, I think that authenticity, that community is something that seems very important.
[00:14:16] Some of the surveys that I've seen and it'll be interesting to see how it develops. So, Lauren, turning from the consumer to our audience, you surveyed the DSI audience on the use of AI. What was what they think about it? What they think its impacts are going to be? What are some of the headlines from that?
[00:14:44] Yeah, so one of the most surprising ones was we asked the brand leaders, we said, do you think that AI is going to significantly disrupt the industry? And 63% of people said that it would significantly disrupt or completely reinvent, which completely on board understand that. I think we all believe that it will change the industry. Yet 42% said it would remain flat.
[00:15:08] And I found that to be quite an interesting comparison because it does require investment in technology and capabilities and changing ways of working to actually be ready for AI and to be an AI enabled organization. So I had a lot of conversations with some brands who kind of participated and a lot of them are struggling with saying, hey, we've done this and we've seen this ROI.
[00:15:36] And so it can unlock more budget. But I do think that's a watch out area where brands need to make sure that they're setting aside budget and organizations need to understand you have to spend a little bit in the forefront to kind of see some of the benefits of it. It's just tough times for that out there. And so some really critical redirecting of budgets will need to happen before those great unlocks come, I would imagine.
[00:16:07] Yes, definitely. Yeah. If you can connect the use of AI to increased business performance, you should be able to unlock budgets. Now, is it the level of a transformation budget or is it the level of, oh, we can throw some more money at this, but it's not funding the kind of organizational transformation that you're talking about, Lauren?
[00:16:30] Well, I think the big difference is just tacking AI onto something versus actually rethinking a process. Right. So a lot right now is like, hey, we'll add AI to step 32 and 67 of this 300 step process and it's going to make it better. But like organizations haven't really changed the way that they're doing work. And so I think that's why they're not seeing as much benefit from AI usage.
[00:16:56] And so I just re I really encourage brands to really reimagine and reinvent the way that they're doing things and try to think of the holistic process versus just tacking AI onto different pieces of it. Well, let me ask you, Lauren, as you've been taking this message of. Of preparing for this, this, this shift and having the organizational, you know, your your white paper around kind of how to do this transformation.
[00:17:26] How are you finding it received? Like, what are the what are your sort of top impressions of how people are taking that message? And then what are some of the leaders that you're talking to doing differently in response to this? Because it's a big thing to take on. I think the first reaction is a little bit like, oh, you know, like. I can like see it in their faces. And then the second question I always get is like, where do you start?
[00:17:56] And my suggestion is always to kind of start with definitely like test and learns, but also with like your people. So educate your people at every single level of your organization on what AI is, how they can use it, how they should be using it. And then that opens up the chance for them to rethink some of those processes and how they need to work together and what functions they need to work with. One best practice I've seen that's worked at a lot of organizations is they've created this AI task force.
[00:18:26] So they've pulled together cross-functional people inside the organization and they meet actually on a monthly basis. And they talk about, OK, what are the pilots happening across the organization? What are the things that we're learning? Where are we seeing some benefits? How can we roll this out to the rest of the organization? What are opportunities to educate? So really just bringing everyone together to have the conversation instead of doing it in pockets and creating even more silos. Have you seen any consistency in who leads that?
[00:18:56] Is it an IT slash data person or is it just different depending on the organization? So some of the more mature organizations actually have created a person who's dedicated to AI and innovation and focusing on like what's coming next. A lot of that is like the AEO, GEO role where they're responsible for figuring out like how to win on the agentic shelf and they're leading the task force. I would say in other organizations that don't have that role, it's usually the digital team.
[00:19:26] You know, they're the movers and shakers and they're the ones that have been pushing the organization forward on digital. So they're bringing everyone together. But I would say that it does need to have leadership support from all of the functions. And so I've seen it at one organization, it's actually at a leadership level. And at another organization, it's more at kind of like a director level. So I've seen it work in both kind of ways. I think it really depends on your culture and your organization. Yeah, it makes sense.
[00:19:56] And you had more results from the DSI survey. What else did you hear about their view on AI at their companies? Yeah, the other one that was really interesting is we asked, are they using AI? And if they're not, why are they not using AI? And 41% said that they're not using AI because of trust and safety concerns. And then 29% said because of a talent and education gap.
[00:20:22] So it really matches with a lot of where I give recommendations in terms of what the best next step is. A lot of organizations have tools. I was talking to a brand the other day and they're like, I have Claude and Chachi Petit and Gemini, but I don't know what to use for what. And so it's not just about giving the tools. It's really about educating and educating for the specific function and role.
[00:20:47] Meaning someone in supply chain is going to use an LLM differently than someone who's in marketing or the creative team. And so really making sure you're educating in addition to giving access. And then having conversations around what trust and safety means. And that's a legal and IT department conversation. At the Digital Shelf Summit, it was really cool. We had two lawyers on stage as a part of a panel.
[00:21:14] And they were talking about, one of them was saying that the legal department actually uses AI the most out of every function, which I thought was so interesting. And they were talking about how they've created this environment where each kind of level of risk is quantified. So it's like, hey, this is a low level of risk. You don't need to involve legal. This is like middle of the road. Legal needs to kind of sign off. Or this is like high risk. We need to be involved from the beginning.
[00:21:41] And they've kind of created that roadmap so that the brand members and the leaders who have to work with legal know when they should be including them and what they can do from a trust and safety perspective. And I really thought that was insightful because this is something that's going to continue to accelerate. And you need to have those open conversations. Makes a ton of sense. Jack, coming back to you.
[00:22:08] You know, your whole business is delivering data to help people make decisions and to understand what's happening with their customers, with their consumers. And I'm just wondering, and I'm sure you deliver a whole nother level of data beyond this kind of public version that you share that goes much more deeply.
[00:22:32] And when it comes to, are you seeing brands starting to evolve their practices, their processes, et cetera, based on the data that you're delivering? Are they responding to this? Are they taking it in as, oh, okay, thanks for the update. What used to be 30% is now 60. Cool. And then they go about their day. Or what do you see? What do you see the response happening?
[00:22:59] What is the characteristics of, what are the best practice characteristics in your mind of what people should be doing with this data right now? Yeah. I mean, I think what I'm hearing anecdotally in our conversations with clients at brand organizations really echoes what Lauren's and DSI's data says, is that I think no one is brushing off that this is going to be meaningful and shifting to how consumers shop.
[00:23:25] I think there's just all the organizations are different places on a spectrum of how much they can do, how much they're willing to do, how much they can invest in actioning against that change here. And I'm very sympathetic. It feels like, again, echo one of your comments, Lauren, that e-commerce and digital teams are really being tasked with being kind of the tip of the spear on this.
[00:23:49] And that's an organization, that's a part of an organization at most companies that already is spread pretty thin and kind of fighting for investment and finding their place within the organization. And to kind of take on this next new frontier, it's a lot for these folks to take on. But nevertheless, they probably are the best people for this because they have adaptability. They're in the e-commerce space, which is really being most affected by agentic and AI most directly first.
[00:24:17] And so those teams are the ones working on it. And so I think we spend a lot of time talking about the top recommendations are continue to make sure that your digital shell fundamentals are right, because I think those are some of the things that are being indexed and considered by either retailers' own AI tools or off-site large language models.
[00:24:38] Having all of the necessary product information and content laid out in a way that is readable by these AI platforms is, I think, foundational to making sure your products are visible. And so I think that's something that organizations that are doing this right are focused on, continuing to monitor and manage their digital shelf fundamentals.
[00:25:02] And then next level is, you know, I think some of these task forces and more advanced organizations are thinking about the other third-party locations that they can influence that also influence what is surfaced up in these AI conversations. You know, whether that is there was a lot of conversation earlier this year about Reddit conversations. I've heard Wikipedia talked about. I've heard, you know, third-party publications that are really relevant to, you know, your category, for example, like Good Housekeeping, your own brand.com site.
[00:25:31] All of these things are worth a look to potentially, you know, consider what data content is there about your products, because they will likely be indexed by these platforms. And, you know, what is there will influence how visible your products are across these AI surfaces that consumers are interacting with. And so I think best-in-class organizations are thinking about some of those third-party locations as well that are really important to this ecosystem too.
[00:25:59] And, Jack, I love that you talked about brilliant at the basics. And one of the big pieces there is your data, having clean and accurate data, having a product experience management as your source of truth. And we actually asked in the survey, do you believe your organization's current data infrastructure is AI-ready? And 70% of people said somewhat, but we have significant silos to break down.
[00:26:26] And 20% said, no, we require a complete overhaul of our data and hygiene. So I think that foundational layer of product data, who owns it, where is it, is it accurate? Don't talk about anything else in your organization until you have that right. It is such a critical piece.
[00:26:45] And I don't think it was surprising to see those numbers, but I think it's really important for brands to just know that you shouldn't be running 15 pilots if you have inaccurate data and you don't know where it lives. Absolutely. Yeah. Yeah. I mean, I was just thinking about that 70% number. And in some ways, I think that's probably higher than if you had surveyed non-DSI people.
[00:27:13] Because God knows we hammer it home. And I think we may have a sort of more sophisticated audience. But I would think it'd be very hard to find people that are willing to say, we got this. Because so much of it's unknown. So much of it continues to evolve. The rules keep changing. The opportunities keep changing.
[00:27:37] And so to your earlier point, Jack, you need agile people that are willing to lean forward into this work and people that are capable of inspiring support from higher in the organization. And there's probably few places as good at that, that have become as good at that, than people in the digital and e-commerce space. So, all right, listeners, it's on you again.
[00:28:07] Settle up. But it's an opportunity, right, Lauren? 100%. It is a huge opportunity for the digital leaders to take the lead and to really make an even bigger change than what we've seen in digital transformation. And hopefully get a promotion out of it too, right? Because AI can help you do more than you've ever been able to do in the past. So, huge opportunity. So, for this report, Lauren, I know a joint effort of Nielsen IQ and the DSI.
[00:28:36] Where can our listeners find it? So, digitalshelfinstitute.org. Go to the resources section and it will be the first report there. So, and also connect with Jack and I on LinkedIn if you want to reach out or ask any questions. But digitalshelfinstitute.org. Go to resources. Excellent. Jack, we're so grateful for your partnership on this report and for you joining us here to talk about it.
[00:29:01] And these kinds of partnerships are really important right now to bring all these perspectives together. And we're truly grateful. Thank you. Yeah, thank you, Peter. Thank you, Lauren. Really great to be here talking about this important topic and looking forward to partnering more in the future. Thanks again to Jack and Lauren for sharing the results. Digitalshelfinstitute.org is the place to find this report and many others. Become a member while you're there. Thanks for being part of our community.