{"id":809799,"date":"2024-12-03T22:13:27","date_gmt":"2024-12-04T04:13:27","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2024\/12\/03\/how-googles-ai-is-changing-e-commerce-for-the-holidays\/"},"modified":"2024-12-03T22:13:27","modified_gmt":"2024-12-04T04:13:27","slug":"how-googles-ai-is-changing-e-commerce-for-the-holidays","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2024\/12\/03\/how-googles-ai-is-changing-e-commerce-for-the-holidays\/","title":{"rendered":"How Google\u2019s AI Is Changing E-Commerce For The Holidays"},"content":{"rendered":"
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This is the published version of Forbes\u2019<\/em> CEO newsletter, which offers the latest news for today’s and tomorrow’s business leaders and decision makers. Click here<\/a> to get it delivered to your inbox every week.<\/h3>\n
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The holiday spending season is officially here<\/strong>. Shoppers are tapping mobile phones, typing on keyboards, and yes, even going into actual stores in search of gifts to make the darkest part of the year more festive.<\/p>\n

While today\u2019s shopping event\u2014Cyber Monday\u2014is really just a name for sales, it\u2019s still enormous<\/strong>. (According to the Pew Research Center<\/a>, 96% of adults use the internet and 79% have a high-speed connection at home\u2014a vast difference from the 2005 origin of the event, when people used their work computers to shop online.) CapitalOne predicts<\/a> that holiday shoppers will spend $13.2 billion today. In 2023, 94 million people shopped online on Cyber Monday, which was a 26.5% bigger shopping day than Black Friday.<\/p>\n

Since the holiday spending season brings so much business\u2014according to the National Retail Foundation<\/a>, it\u2019s driven an average of 19% of total annual sales for the last five years for retailers\u2014we\u2019re devoting Forbes CEO today to what retailers and shipping companies call the most wonderful time of the year<\/strong>. We\u2019ve got statistics and projections about what consumers are likely to spend and how it can impact the economy. I also talked to Jim Yu, CEO of BrightEdge, about how Google\u2019s AI is impacting e-commerce this holiday season.<\/p>\n

Thanks so much for reading, and may your registers ring.<\/p>\n

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SPENDING PROJECTIONS<\/h2>\n
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getty<\/small><\/p>\n<\/figcaption><\/figure>\n

It\u2019s high shopping season now, but the projections about how people were likely to spend have been coming out since August. The good news: All predictions have shown more spending this year<\/strong>. The not-so-great news: Many see slower growth than in the past.<\/p>\n

According to the National Retail Federation\u2019s annual holiday sales predictions in October, total retail sales are expected to increase 2.5% to 3.5%<\/strong> over 2023 levels. Forbes<\/em> senior contributor Joan Verdon wrote<\/a> this is a modest increase but still would be a spending record, with shoppers expected to spend at least $25 billion more than last year. NRF President and CEO Matthew Shay said retailers are fairly upbeat and optimistic about the holidays, even though they\u2019re concerned that shoppers will be more price-conscious.<\/p>\n

Deloitte made a similar projection in September<\/strong>, expecting holiday spending to increase between 2.3% and 3.3%. Michael Jeschke, leader of Deloitte\u2019s Retail & Consumer Products Practice, told Verdon<\/a> in an interview about this forecast that they see a \u201creturn to normal spending\u201d in 2024\u2014more in line with the last 10 to 15 years in terms of growth than the previous three, which were all deeply impacted by the pandemic and its after effects. But still, Deloitte found that consumers plan to spend an average of $1,778 this holiday season\u20148% more than 2023\u2014with the largest increases on experiences, decor and holiday clothing.<\/p>\n

In August, Salesforce predicted online global holiday sales of $1.19 trillion, growth of just 2%<\/strong> from 2023\u2019s $1.17 trillion, wrote Forbes<\/em> senior contributor Joan Verdon<\/a>. Adobe\u2019s online forecast, made about a month later in September, predicts a record $240.8 billion in online spending in the U.S., an increase of 8.4% over 2023, Verdon wrote in another article<\/a>. Patrick Brown, Adobe\u2019s vice president of growth marketing and insights, told Verdon that they anticipate consumers to do more splurging on bigger ticket items\u2014and more deep discounts coming on them this year.<\/p>\n

The spending got off to a rousing start last week. Black Friday online sales approached $11 billion<\/strong>\u2014an increase of more than 10%, Verdon reported<\/a> from Adobe Analytics and Salesforce data. But there was a loser on Black Friday: actual stores. There was an 8.2% drop in in-store traffic, according to Sensormatic Solutions. Grant Gustafson, Sensormatic\u2019s head of retail and analytics, told Verdon this was likely caused by retailers improving their online shopping experiences and spreading sales to the entire week.<\/p>\n

ECONOMIC INDICATORS<\/h2>\n
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getty<\/small><\/p>\n<\/figcaption><\/figure>\n

While analysts predict that more money will be spent this year, consumers have also borne the brunt of inflation for the last several years<\/strong>. Prices of most items, from food and fuel to gifts and experiences, are still a little more expensive\u2014something that could make a big difference in what people spend.<\/p>\n

Forbes<\/em> senior contributor Sharon Edelson reported on<\/a> a survey from ESW at the beginning of October that found 61% of consumers said they planned to spend more than $600 this holiday season, but 47% said the high prices of food and fuel will lead them to spend less than they would otherwise<\/strong>.<\/p>\n

Salesforce predicted back in August<\/a> that value will be top-of-mind for consumers this year, with one in five online purchases expected to be made on a Chinese-headquartered shopping app<\/strong>: namely Temu, Shein and TikTok. In August, 63% of consumers had made purchases from one of these apps during the previous six months, and half had already planned to buy from them during the holiday season. Salesforce said TikTok was likely to be the big winner; its customer base increased 24% between April and August.<\/p>\n

Deloitte\u2019s Jeschke said in September <\/a>that inflation is likely to have both a positive and negative impact on holiday spending<\/strong>. With decreased inflation comes an ability to spend more, but the prolonged period of inflation has eaten into many households\u2019 savings, which could lead to more credit card debt.<\/p>\n

An overwhelming majority of consumers\u201485.1%\u2014said they expect to use credit<\/strong> or borrowing to make holiday purchases, according to Coresight Research\u2019s Holiday 2024 Consumer Survey and Retail Outlook, Verdon wrote last month<\/a>. Four in 10 expect to put the majority of their spending on credit, and more than a third are using credit cards more than last year, according to Salesforce.<\/p>\n

TOMORROW\u2019S TRENDS<\/h2>\n

How Google\u2019s AI Is Shifting The Holiday E-Commerce Playing Field<\/strong><\/h3>\n
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BrightEdge Founder and CEO Jim Yu.<\/p>\n

BrightEdge, Sopa Images\/Lightrocket via Getty Images<\/small><\/figcaption><\/figure>\n

It\u2019s hard to miss the changes that Google has been making to its search results pages this year, especially when it comes to shopping. As the tech giant continues to improve its AI-powered search results, it\u2019s doing more to impact what it shows to consumers. I talked to Jim Yu, CEO of SEO and content marketing firm BrightEdge, which keeps close tabs on what Google and other search engines are doing. I spoke to him about some of the changes and what they mean for businesses. This conversation has been edited for length, clarity and continuity.<\/em><\/p>\n

What are some new things Google is incorporating in its e-commerce search results?<\/strong><\/p>\n

Yu: <\/strong>Google\u2019s doing a lot in some of these commerce shopping queries [with] experimentation around YouTube. It makes sense if you think about multimodal content. If you are shopping for the new Sonos, buying a new iPhone or looking for a big screen TV, a lot of times people go to YouTube and find reviews. But it takes a lot of time to watch those videos.<\/p>\n

Google\u2019s AI overview automatically goes and looks at the video, watches the video, transcribes the video, then figures out what query is relevant for in search and summarizes. For example, if there are some pros and cons to buying something, it automatically looks at the video, along with regular reviews, and then summarizes that into the AI overview.<\/p>\n

This is a very interesting hint into the future of AI. The last 18 months has been around large language models, which have been about just text. From a shopper perspective during the holiday season, you don\u2019t have to watch all that stuff and spend a ton of time researching.<\/p>\n

Is it doing a good job of picking credible reviews? I mean, anybody who wants to do a product review can, but I imagine that an editor at Consumer Reports<\/em>‘ review might carry more weight than one from my neighbor.<\/strong><\/p>\n

I think they\u2019re doing a relatively good job with this. It\u2019s an interesting dynamic because on YouTube they have a lot more signals around content moderation. Bigger picture, you saw this evolution with AI overviews, where in the beginning it was using a lot of Reddit and Quora content\u2014user-generated, creator-generated content, but with maybe less on moderation and authority. With YouTube, there are better controls and guardrails around the authority they ascribe to a creator.<\/p>\n

What else has Google changed and added for the shopping season in terms of AI and search results?<\/strong><\/p>\n

There are larger AI overview panels. And by larger, I mean the real estate the AI overview takes now. We have not seen a lot of ads appear. I know they’re talking about that, [and because] the space that the AI overview is taking is increasing, that may be a precursor to having more real estate to add ads into that format.<\/p>\n

You\u2019re seeing more of the introduction of AI overviews at the top of search results, and a lot of times, integrating more details around the product so it\u2019s a richer experience if you have a high-intent shopping query.<\/p>\n

The product carousel, where in the AI overviews you can actually see different products, went up 300%. It\u2019s not just describing products, describing attributes to consider, talking about the latest trends and things like that, but [it can] go ahead and show you the products that you can click through and buy. Those are going to be very important aspects heading into the holiday season.<\/p>\n

What does this mean for CMOs and CEOs?<\/strong><\/p>\n

You\u2019ve got to start analyzing this. If Google is important to your business, which for many people it is, especially as you head into the holiday shopping season, make sure you understand and monitor where AI is showing up in your portfolio of shopping keywords. If you have products [that would be in its] carousels, make sure that the product feeds you\u2019re sending Google are in there, they\u2019re timely, accurate and optimized because it\u2019s pulling that right into the front of the AI. You want your image of your product and the information from your products to show up in that AI overview. And the best chance of that is making sure that you are feeding that directly into Google.<\/p>\n

You also want to make sure you are very focused on the quality of the data and the content that you\u2019re sending. Before, nobody was going to page two of the results. Now, you really want to be the trusted, accurate information that\u2019s right in the AI portion at the top of that page.<\/p>\n

One other thing I would [recommend], especially for shopping, is visual content. The trend here, especially in commerce, is people don\u2019t just shop by looking at words. People are looking at pictures and videos and things like that. You want to make sure you are the source of that beautiful picture of that product and that is going to be another important element of winning in the AI-assisted shopping experience.<\/p>\n

VIDEO<\/h2>\n

QUIZ<\/strong><\/h2>\n

Apple released an emotional holiday ad<\/strong> over Thanksgiving. What is it about?<\/p>\n

A. A profoundly shy man using Apple Intelligence to get ideas to strike up a conversation with the co-worker he has had his eye on, finally asking her out at a holiday party<\/p>\n

B. A woman\u2019s health journey, from a doctor telling her she needs to lose a considerable amount of weight, to finishing her first marathon, using an Apple Watch<\/p>\n

C. A child using an Apple Pencil to draw a holiday picture on an iPad to send his mother, who is an ER doctor and working a long shift on Christmas<\/p>\n

D. A man hearing his daughter playing a guitar and singing with help from the hearing aid feature of his AirPods<\/p>\n

See if you got the answer right here<\/a>.<\/p>\n<\/div>\n

Read More<\/a>
\n Megan Poinski<\/p>\n","protected":false},"excerpt":{"rendered":"

This is the published version of Forbes\u2019 CEO newsletter, which offers the latest news for today’s and tomorrow’s business leaders and decision makers. Click here to get it delivered to your inbox every week. The holiday spending season is officially here. Shoppers are tapping mobile phones, typing on keyboards, and yes, even going into actual<\/p>\n","protected":false},"author":1,"featured_media":809800,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[395,161],"tags":[],"class_list":{"0":"post-809799","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-changing","8":"category-googles"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/809799","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=809799"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/809799\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/809800"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=809799"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=809799"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=809799"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}