The Latest Data on AI Adoption in Commerce, with Jack O’Leary, Director, eCommerce Strategic Insights at NIQ

Transcript

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Lauren Livak Gilbert (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.

 

Peter Crosby (00:22):

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. Jack O'Leary, Director E-commerce Strategic Insights at NIQ joins with the consumer numbers and our own Lauren Livak Gilbert 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.

 

Jack O'Leary (01:03):

Awesome. Yeah, thank you, Peter, for having me. Excited to be here.

 

Peter Crosby (01:06):

I believe you are called, what is the term? Data nerd, a data geek, which do you prefer and is it true?

 

Jack O'Leary (01:16):

That is true. That is fair. I work in an organization that is all about data. At Nielsen IQ, we're tracking trillions of data points around the world looking to understand consumer and retail activity and behavior. And so it's a 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.

 

Peter Crosby (01:42):

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. And you and the DSI recently teamed up to do a report that 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 how consumers are letting AI into their daily lives as far as commerce is concerned, of course?

 

Jack O'Leary (02:21):

Absolutely. Absolutely. I think it's the important topic of 2026 as we think towards the future, how the shopper's path to purchase might shift and change. AI is the big impact there. And 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. I think in doing this study with DSI here and bringing the consumer lens, one of the things we had 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 18% say they're utilizing generative AI in some sense daily.

 

(03:13):

And then I think for us in the e-commerce, retail, consumer good space, the natural double click from there is 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% are interested to some degree in having AI be a part of their product purchase journeys here. And to me, I think in a space that's so new and still building out the capabilities to see that level of interest and appetite from the consumer out there indicates that this is something that is 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.

 

Peter Crosby (04:02):

And Jack, just to clarify, is this US? Is this global? Where did this data come from?

 

Jack O'Leary (04:08):

In this data set specifically, we were looking at the US only, but 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.

 

Peter Crosby (04:20):

Yeah, it's one of the fastest adoption rates of any technology I think ever in this short amount of time.

 

Lauren Livak Gilbert (04:27):

Yeah, it took ChatGPT five days to reach a million users. It took TikTok six months and the internet four years.

 

Peter Crosby (04:36):

Wow. There you go. Yes, indeed.

 

Lauren Livak Gilbert (04:40):

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 a purchase perspective, but who is using it and how are they using it? So from a demographic standpoint, what came out of the data to help brands think about where they should focus their time?

 

Jack O'Leary (05:06):

Yeah, absolutely. If I was a large CPG brand organization, I'd be seeking to understand which consumer cohorts are the most adopting of this, who are there first to help me understand 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. We saw that higher income households defined in this case here of households having a hundred thousand or more in annual earnings here had a 60% level of some interest in utilizing generative AI for shopping here. Comparing that to the earlier stat earlier, we're seeing around 50% of households generally are interested. So that's a fairly big differential there. 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%.

 

(06:07):

And I think that really reflects and mirrors what we saw for e-commerce generally and e-commerce's adoption over the past few decades here. And certainly you hear from a lot of retailers in their quarterly earnings and the way they discuss e-commerce and omnichannel is it can be a vehicle into higher income households. And these are just 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 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 across demographics, were really interested to understand how are shoppers utilizing generative AI in these shopping journeys? There's a lot talked 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.

 

(07:04):

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. But the use cases that are really meaningful are things like research products, summarize, review, recommend brands across demographics, across 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 an interesting learning for brands as well in thinking about how this technology is being used.

 

Lauren Livak Gilbert (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? Are they shopping at a Walmart? Are they going to use Sparky? And Sparky's now available on desktop and on mobile. Are they shopping on Amazon? Are they going to use Alexa Shopping? How are they going to interact with these tools? Is that something we should focus on from a strategy perspective? I just think it helps give you a little bit of a compass as to where to spend your time knowing that you need to prioritize. And sorry, Peter, go ahead and add. I know you wanted to add something.

 

Peter Crosby (08:15):

Oh, no, that's okay. What I was thinking was that given the way the trends are going to integrate the agentic shopping experience into the foundational experience like Alexa and what they're doing to just, you almost won't be able to avoid it. 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. But now it's being so integrated on some of the retailer sites that it's how you're going to shop because it converts better and gives better results. So I think it'll be interesting to see how that all evolves over time as well.

 

Jack O'Leary (09:00):

Yeah, Peter, I can only echo you. I think that is definitely the direction we're heading. I think as the retailers become more assured that one, their AI tools like Alexa for shopping or Sparky are working 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, as a consumer myself, had a search for a somewhat complex category on Amazon. I was looking to find basically a system to make one of my cabinet fronts a pullout drawer for a garbage can. And it actually, I typed in the search bar, my query, and it immediately moved me to Alexa for shopping versus giving me a traditional Amazon search page of results here. And so I think we're going to reach a future where these tools are actually just naturally embedded in the traditional search journey for a lot of consumers for a lot of categories and shopper missions.

 

Lauren Livak Gilbert (10:03):

I think that's a great point, Jack. I was actually at an event a couple of weeks ago and there was a panel of brands and we were talking about AI and someone asked one of the brands, do you think that everybody's actually using AI? Or are they going to rebel against it or they don't want to use it? And one of the brands answered and she was like, everybody's using it whether they know it or not. So when you go on Google, most people are reading the AI summary first. So you're using AI 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 dug into generational information, data and information, which I thought was interesting. So millennials versus boomers who is interested in it? And I'm actually surprised by who actually likes AI versus who doesn't.

 

(10:50):

So Jack, let's dive into that one.

 

Jack O'Leary (10:53):

Yeah, absolutely. So the generational breakdown, it did skew younger, which maybe is expected, but the peak maybe is maybe a little unexpected. In terms of interests, 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. 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 Gen X was next and in 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. Two caveats on this. 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.

 

(11:54):

And two, I think Lauren, your point is so true. I think many of folks across all of these generations and maybe even particularly in some of the older ones 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 definitively some interesting trends here we're seeing across the generations in terms of interest in this. I'm

 

Peter Crosby (12:28):

Kind of proud of the baby boomers. Sort of the get off my lawn generation is sticking to their guns. You're not going to take over my life, but I think they'll end up there too. But

 

Lauren Livak Gilbert (12:38):

What

 

Peter Crosby (12:38):

I

 

Lauren Livak Gilbert (12:38):

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've expected. Because it's threatening with jobs. 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. We also want to go in store and we want to go back to the malls and we want to have these authentic in - person experiences." And I don't know if I would've expected that to be the case. I would've thought that they were heavy users of AI, but I was talking to someone who has kids and they were like, "The kids hate the AI. They don't want to use it. They don't have any desire to engage with it. " So you can see both sides of the spectrum, but I think it's quite interesting where we're pushing that generation after being so digital.

 

Jack O'Leary (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.

 

Peter Crosby (13:41):

Well, if you think of what those generations, I mean the upheaval in society and technology and COVID, all of it, I can imagine the need for connection, which I hope they were denied it for so long and that now that maybe although they spend a lot of time on screens, I think that authenticity, that community is something that seems very important, some of the surveys that I've seen. And it'd 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 they think about it, what they think its impacts are going to be. What are some of the headlines from that?

 

Lauren Livak Gilbert (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. 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 participated and a lot of them are struggling with saying, "Hey, we've done this and we've seen this ROI 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 see some of the benefits of it.

 

Peter Crosby (15:51):

It's just tough times for that out there. It is. And so some really critical redirecting of budgets will need to happen before those great unlocks come, I would imagine.

 

Lauren Livak Gilbert (16:07):

Yes,

 

Peter Crosby (16:08):

Definitely.

 

Lauren Livak Gilbert (16:08):

Yeah.

 

Peter Crosby (16:10):

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?

 

Lauren Livak Gilbert (16:31):

Well, I think the big difference is just tacking AI onto something versus actually rethinking a process. 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 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. And so 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.

 

Peter Crosby (17:11):

Well, let me ask you, Lauren, as you've been taking this message of preparing for this shift and having the organizational, your white paper around how to do this transformation, how are you finding it received? What are your 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.

 

Lauren Livak Gilbert (17:45):

I think the first reaction is a little bit like more. I can see it in their faces. And then the second question I always get is, where do you start? And my suggestion is always to start with definitely test and learns, but also with 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. So they've pulled together cross-functional people inside the organization and they meet actually on a monthly basis and they talk about, okay, what are the pilots happening across the organization?

 

(18:37):

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.

 

Peter Crosby (18:53):

Have you seen any consistency in who leads that? Is it an IT/data person or is it just different depending on the organization?

 

Lauren Livak Gilbert (19:04):

So some of the more mature organizations actually have created a person who's dedicated to AI and innovation and focusing on what's coming next. A lot of that is the AEO GEO role where they're responsible for figuring out 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. 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.

 

Peter Crosby (19:34):

But

 

Lauren Livak Gilbert (19:34):

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 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.

 

Peter Crosby (19:55):

Yeah, makes sense. And you had more results from the DSI survey. What else did you hear about their view on AI at their companies?

 

Lauren Livak Gilbert (20:06):

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. 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 ChatGPT 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, 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.

 

(21:04):

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 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 middle of the road. Legal needs to sign off, or this is high risk. We need to be involved from the beginning." And they've 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.

 

(21:55):

And I really though that was insightful because this is something that's going to continue to accelerate and you need to have those open conversations.

 

Peter Crosby (22:03):

Makes a ton of sense. Jack, coming back to you, 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. 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 or 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 the response happening? What are the best practice characteristics in your mind of what people should be doing with this data right now?

 

Jack O'Leary (23:08):

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. I think there's just all the organizations are at 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 to again echo one of your comments, Lauren, that e-commerce and digital teams are really being tasked with being the tip of the spear on this. And that's a part of an organization at most companies that already is spread pretty thin and fighting for investment and finding their place within the organization. And to 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.

 

(24:10):

They're in the e-commerce space, which is really being most affected by Agentic and AI most directly first. 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 shelf fundamentals are right because I think those are some of the things that are being indexed and considered by either retailer's own AI tools or offsite large language models. 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. And then next level is 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, whether that is there was a lot of conversation earlier this year about Reddit conversations.

 

(25:20):

I've heard Wikipedia talked about, I've heard third-party publications that are really relevant to your category, for example, like Good Housekeeping, your own brand.com site. All of these things are worth a look to potentially consider what data content is there about your products because they will likely be indexed by these platforms and 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.

 

Lauren Livak Gilbert (26:00):

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. 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. 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.

 

Jack O'Leary (27:00):

Absolutely.

 

Peter Crosby (27:03):

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 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. 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.

 

(28:08):

Sell up, but it's an opportunity, right, Lauren?

 

Lauren Livak Gilbert (28:12):

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, because AI can help you do more than you've ever been able to do in the past. So huge opportunity.

 

Peter Crosby (28:29):

So for this report, Lauren, I know a joint effort of Nielsen IQ and the DSI. Where can our listeners find it?

 

Lauren Livak Gilbert (28:38):

So digitalshelfinstitute.org, go to the resources section and it will be the first report there. 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.

 

Peter Crosby (28:55):

Excellent. Jack, we're so grateful for your partnership on this report and for you joining us here to talk about it. And these kinds of partnerships are really important right now to bring all these perspectives together and we're truly grateful. Thank you.

 

Jack O'Leary (29:11):

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.

 

Peter Crosby (29:17):

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.