Retail’s AI-powered race into this Black Friday shopping season

At a difficult time for retailers, this Black Friday and Festive shopping season will test consumer confidence and shoppers’ willingness to splash out. But it will also put AI in the spotlight like never before: for both shoppers seeking bargains and retailers on the hunt to manage demand. AI is reshaping many aspects of retailing, especially at peak times of year.

From big deals to smart algorithms

From the consumer perspective, AI search is a huge trend: one in three younger consumers are set to use AI tools such as ChatGPT and Gemini to search for deals this Black Friday period, according to research from KPMG. 

Retailers are putting AI to work, often behind the scenes. Deloitte, which has been surveying retailers on festive spending for 40 years, says as Black Friday changes the retailers that thrive will be those which offer seamless technology to reduce friction for the customer.  

In other words, it’s no longer just about who offers the biggest discounts, but who has the smartest algorithm. Yet it seems, so far, that retail AI adoption is less about reinvention and more blending AI quietly into the background to operate more efficiently. 

Retailers juggle AI’s benefits with higher risks

Our own Atradius research provides fascinating insights into the complexities of these efforts. We found that nine in ten UK retailers now use AI in some form, with 87% deploying it to help manage Christmas and Black Friday peaks. 

In fact, our survey of 1,000 retail decision-makers revealed that more than half (56%) had begun using AI months ahead of the festive period.

Shoppers expect things to be instant, and retailers are racing to keep up: AI adoption is being driven largely by shopper expectations, with retailers citing customer demand for product availability (63%), personalisation (61%) and faster delivery (59%) as key motivators. 

But three years after generative AI went mainstream with the public launch of ChatGPT — and at a time when margins are razor-thin and consumer loyalty is fleeting — we also see how AI can cause headaches. It all depends how it’s used. Two-thirds (66%) of retailers expect overall business risk to rise as AI adoption accelerates, particularly around data privacy, implementation cost and loss of human judgement. 

Ultimately, of course, AI should make shopping easier, not make customers uneasy. Confidence in funding AI is high, but resilience planning must evolve with technology. From the threat of high-profile data breaches — like we’ve seen with M&S, Co-op and so many other high street brands — to its significant environmental impact, AI can make customers nervous.

The retailers showing how it’s done

Some brands are leading from the front and showing others how it is done: this is something we explored in our new Retail Resilience report [link]. 

For instance, we heard how ethical beauty brand LUSH applies a similar philosophy to scrutinising potential AI use — environmental impact, data risk and moral intent — as it does product ingredients. The brand’s human-supervised “Marvin” bot reflects its wider philosophy of AI-assisted, not AI-led, service: technology that supports staff, safeguards trust and frees people to focus on empathy and connection – the parts of customer care machines can’t replicate.

Our findings are also a reminder of the huge importance of resilience. AI doesn’t remove risk, it changes it. Even with automation, one supplier issue or late payment can still cause major disruption. 

That’s where protection like trade credit insurance comes in – giving retail suppliers a financial safety net if a retailer can’t pay. In a season built on tight margins and fast turnover, it helps the retail supply chain stay confident while retailers invest in new technology like AI and keeps business moving when shocks hit. 

Read our report to find out more about how retailers are making use of AI during the Golden Quarter and beyond.