Photo source: TMA Solutions
This holiday season, AI is stepping in as a helpful ally in our shopping journeys, as it offers everything from personalised gift suggestions to smarter marketing tactics and enhanced security measures. It’s transforming the entire experience, making everything from finding the perfect gift to checking out easier and more enjoyable.
While traditional in-store shopping still accounts for a large portion of retail spending, online shopping is increasingly gaining ground. For instance, on Black Friday, online sales jumped by 14.6%, while in-store sales barely budged at 0.7%, according to early data from Mastercard SpendingPulse. Looking ahead, the Mastercard Economics Institute anticipates that online retail sales will see a year-over-year increase of 7.1% during the holiday season. AI is likely to play an important role in sustaining this growth.
Here are three ways AI is transforming our online shopping experience this holiday season:
Your Personal Shopping Assistant
Gift-giving can be a challenge. Some people have a knack for it, while others struggle to find the right present. That’s where AI comes in. Tools like Shopping Muse from Dynamic Yield by Mastercard are designed to help shoppers navigate their choices. This personal AI assistant allows you to chat naturally and ask specific questions. For example, you might ask, “What should I get my girlfriend for Christmas?” and refine your search with follow-up questions.
Shopping Muse also utilises image recognition technology to suggest items that are visually similar to what you’re interested in. Soon, shoppers will even be able to upload pictures for tailored recommendations.
Smarter Shopping Experiences
Personalisation is about recommending products and creating an overall responsive shopping experience. For instance, if a website knows you’re on the hunt for gifts, it might highlight customer reviews or show how many other shoppers have recently purchased an item.
This kind of “social proof” can help you feel more confident about your choices.
Additionally, if your shopping cart is filling up, you might receive alerts about shipping deadlines or suggestions for items that would qualify you for free shipping.
With so many promotions flooding our inboxes during the holidays, brands are also using AI to tailor their email campaigns based on your recent interactions to make sure that the content feels relevant rather than overwhelming.
Improved Security Measures
AI has been a game changer in payment security for years now. It constantly scans billions of transactions to identify fraud patterns and alert banks before their customers fall victim to scams.
With advancements like Decision Intelligence Pro, which launched earlier this year, security has become even more robust. This system analyses a massive amount of data—about 1 trillion data points—to quickly determine whether a transaction is legitimate. It has improved fraud detection rates by an average of 20% and reduced false positives by over 85%, which means fewer legitimate purchases are mistakenly flagged as fraudulent.
Now that the holiday season is fast approaching, it’s clear that AI is actively improving our online shopping experiences. AI is making our holiday shopping journeys smoother and more enjoyable than ever before through personalised assistance, smarter marketing strategies, and improved security measures.