At the start of this year, the UK government announced its plans to “unleash AI” through the AI Opportunities Action Plan—backed by £14bn worth of investment from tech firms. This plan mentioned many valuable industries from healthcare to education, but details on its role in the thriving commerce sector were noticeably absent.
Estimates forecast the global AI ecommerce market to grow from $5.79 billion in 2023 to $50.98 billion by 2033, so there’s little doubt AI is going to impact how we shop. From driving efficiencies to enhancing personalisation, AI has the potential to take commerce to the next level. But turning this potential into tangible impact is the next challenge, and it’s one ministers and business leaders alike should be getting to grips with now.
Consumers are ready: are retailers?
When new technologies enter the market, being met with resistance is a rite of passage. But when it comes to AI and commerce, this half of the battle has already been won as the appetite from consumers is clear. According to Shopify’s most recent Holiday Retail Report, almost half of shoppers (47%) said they expect brands to offer a tech-enabled shopping experience, and the majority (55%) in the UK believe AI will make at least one aspect of shopping easier. Over a third (34%) think it will help them find out information about products they are buying, while 32% think they will be able to use it to find better deals.
And yet despite these encouraging signs, a mere 22% of UK businesses are investing in or planning to invest in AI, according to Shopify’s State of Commerce Report. Perhaps surprisingly given the UK’s position as a leader in the tech sector, this is far below the European average of 53%. Whether due to a lack of guidance, a lack of funding, or a general reticence to bring in new technologies, the gap between consumer expectations and AI implementation cannot be allowed to widen further.
Brands must integrate AI into their business operations now, or risk being left behind. As I see it, the steps below aren’t a wishlist, they’re necessary for survival.
Making AI work for commerce
- Integrate into business operations
AI technologies are ushering in an era of hyper-personalised, frictionless, and decentralised commerce. They promise to fundamentally reshape both consumer shopping behaviours and the operational strategies of merchants. For the shopper, AI is powering smarter, more tailored shopping experiences—surfacing the right products at the right time, generating product descriptions automatically, and enabling real-time support through agents.
For the merchant, AI tools can streamline everything from inventory forecasting to customer acquisition, allowing teams to focus on strategy and growth. AI can also be a useful tool to help businesses expand into new markets faster. By using AI to create product descriptions in local languages and apply sensitivity to different cultures, the right tools can accelerate relevance and credibility for brands with local audiences.
To make the most of these new tools, brands must ensure they form part of a wider, strategic tech stack. While omnichannel commerce once paved the way, unified commerce has emerged as a more comprehensive solution in integrating all of the businesses’ technology, data and platforms into a single view of the customer. It enables the business to understand customers better and creates a more enriching experience that can drive loyalty. We believe unified commerce should be every retailer’s ultimate goal, with AI forming a key part of this.
- Balance AI tools with human relationships and insights
With consumer expectations and market competition higher than ever, being able to cut through the noise and make genuine impact is crucial. Providing a personalised service to every customer will be the differentiator in success for merchants, and this can be unlocked with AI technologies.
However, consumers continue to place great importance on buying from a human and almost a fifth (18%) of UK businesses harbour concerns over delivering a less authentic or human experience to shoppers. Yes, consumers want fast, efficient service, but they want to feel like they’re interacting with another person. This means that, for AI to work for commerce, merchants must seamlessly integrate it into their customer experience, without losing their personality or human connection.
- Support from government initiatives
There have already been a number of AI initiatives put in place by the UK government, from the National AI Strategy published in September 2021 through to the AI Opportunities Action Plan launched in January this year. The Action Plan focuses on initiatives including forging new AI Growth Zones and creating a new National Data Library, but efforts must also focus on the tools themselves—encouraging their creation and adoption, within the safety of thoughtful and effective regulations.
Platforms including our own are already launching new AI tools for the commerce industry, and it is important that government initiatives keep up with the speed of innovation to ensure that this next evolution of the sector is supported responsibly. With recommendations from the government’s Action Plan scheduled between Spring 2025 and 2027, swift action is necessary if the UK—and more specifically the UK’s commerce industry—is to fully seize the opportunities presented by AI.
Turning potential into reality
The next frontier of the commerce industry is here. It promises to revolutionise the industry for both consumers and businesses alike, and there must be a concerted effort from merchants to integrate the new technologies into their existing operations.
For AI to deliver meaningful progress in retail, the broader innovation policy framework needs to support experimentation, adoption, and responsible scaling. Creating the right conditions by enabling innovation will be key to unlocking long-term impact.
By taking the above measures, the UK commerce industry can position itself to make the most of the incoming AI era and beyond.
