• As shoppers grapple with the high cost of living, 70% are more likely to shop during the BFCM weekend and upcoming peak sales moments to get more for their money.
• Despite a challenging economy, 63% of Australian shoppers plan to spend as much or more during the BFCM weekend this year compared to last year.
• Consumers are more intentional than ever as they look to make their money go further, with 53% planning to do the bulk of their holiday shopping during the BFCM weekend.

Black Friday Cyber Monday saw 52 million global shoppers spend $7.5 billion dollars with brands powered by Shopify last year. Ahead of this year’s event, Shopify surveyed 2,000 consumers and 350 businesses across Australia to learn what will motivate consumers and drive business performance over the upcoming holiday shopping period.

The study, conducted by Sapio Research, found that three-quarters (76%) of Australians have cut back on spending in recent months. Yet the vast majority of those who are planning to shop during BFCM (63%) intend to spend the same or more this year compared to last. In fact, the number of people planning to spend more (27%) is twice that of those who are planning to spend less (13%).

“Consumers are looking to make high-quality purchases that bring a sense of happiness or well being this year,” said Shaun Broughton, APAC Managing Director at Shopify. “While Australians are concerned about the rising cost of living, 80% still value high quality products that last. Retailers who strike a balance between price and quality are best placed to maximise sales throughout BFCM and other peak shopping periods.”

The prospect of finding great deals is a strong motivator for consumers, with 70% saying they will shop over BFCM weekend to get more value for their money. Brand loyalty could take a back seat throughout the sales period, however, as 84% of consumers say they will  compare prices to try and find the best deals and discounts possible.

“Customers are certainly being shrewder when parting with their money,” said Kelly Lavery, CEO, Strucket. “It’s up to us as retailers to validate the customer’s purchase as a need rather than a want, ensure that their purchase will make a positive impact on their life, and make them feel confident they spent with the right business. Essentially they are looking for value and trust.”

“Aussies respect retailers that offer regular discounts. Shopify’s research mirrors our own data, which shows that nine in ten respondents view those retailers as ‘value for money’ – a brand perception that is particularly important in today’s cost of living crisis,” said Matthew Herbert, Co-Founder and Co-CEO of brand tracking platform, Tracksuit.

“Retailers looking to capitalise on BFCM this year should remember that it’s not just transactional. By aligning your brand with the highly anticipated sales periods, you demonstrate empathy and support. It’s an opportunity to deliver value for money to consumers while boosting sales, and fostering longer term brand loyalty and trust. It’s a win-win scenario where both consumers and retailers stand to benefit.”

The research also revealed that technology has become a core part of the shopping experience — and there’s value in embracing technology for retailers as well. Close to 1 in 4 holiday shoppers are more likely to buy from brands with technology-enabled shopping experiences (24%). Another quarter expect brands to embed technology into the shopping experience (24%), while 23% are more likely to spend money with brands that offer tech-enabled shopping experiences.

In addition, consumers are excited about the possibilities that AI will bring as they hunt for the best deals this shopping season. More than two-thirds (69%) of shoppers believe AI will make it easier to discover new brands and products, while three-quarters (74%) believe it will help them find deals or special offers.

Interestingly, it is the biggest spenders who are most likely to adopt the latest shopping technology. Consumers planning to spend over $850 this BFCM, are also the most likely to make use of virtual fitting room services or smart mirrors (32%), use virtual assistants (31%), shop for things like furniture using spacial commerce (30%), and over a third (36%) engage with QR codes or digital display screens while shopping. In addition, big spenders are twice as likely to purchase products with personalisation, such as name monogramming, as those who are planning to spend the least.

Key findings from Shopify’s latest research also reveal:

Despite cutting discretionary spending, consumers are willing to pay for a great deal

• Consumers are more intentional than ever as they look to make their money go further, with 53% planning to do the bulk of their holiday shopping during the BFCM weekend.
• While 48% of shoppers still value quality, 67% are open to switching brands based on cost savings.

Retailers are looking to tech to help manage peak sales season

• To meet the demand for technology-driven shopping, 72% of Australian retailers surveyed said they plan to increase their investment in tech to prepare for the holiday sales season.

Online and offline commerce channels are both important

• Preferences towards browsing in a shop vs browsing on an online store are almost evenly split (42% vs 41%) as the top way for Australian consumers to make new product discoveries.
• More shoppers are open to making purchases through social media platforms, with nearly 37% willing to purchase products directly on Facebook, 35% willing to buy through Instagram, 31% willing to buy via YouTube, and 26% willing to buy via TikTok. Only 16% were willing to buy from X.
• Surprisingly, 25-34 year olds are the highest adopters of social shopping behaviours with 48% being willing to purchase products on Facebook, compared to 30% of Gen Z shoppers. In addition, 25-34 year olds were more likely than 18-24 year olds to message brands on social media platforms for customer support (26% vs 24%).
• Almost a third (30%) of businesses think that, out of all the available selling surfaces, social media platforms will provide the highest volume of sales for them by the end of the decade.

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The National Retail Association has today released its projections for the Christmas sales period, predicting that Australians will spend around $63 billion between now and the end of December.

However, National Retail Association Director Rob Godwin said the industry was expecting a generally flat sales period, with little-to-no growth compared with last year.

“We are predicting the industry as a whole will have around the same result as last year – probably in the area of $63 billion nationwide,” Mr Godwin said.

“We are already seeing around 40 per cent of retailers beginning the discounting cycle, in order to get consumers to open their wallets.

“As a result, it’s shaping up as very much a buyers’ Christmas, with great deals already available for those who get in early.”

Mr Godwin said the high point for the sector was the increasing popularity of the Black Friday/Cyber Monday sales event, which is expected to generate some $6.3 billion in sales.

“This grows in popularity every year, and is now challenging the traditional Boxing Day and post-Christmas sales period as Australia’s premier shopping event.

“We will see around 10 per cent of the entire festive season spend take place over those four days later this month.

“That’s good news for shoppers, but also for retail workers and business owners who rely on a strong pre-Christmas sales period to carry them through the quieter months of the following year.

“While we know people are tightening their belts at the moment, the good news is that there are bargains to be found out there. 2023 will definitely be a buyers’ Christmas.”

Projected Christmas season* sales 2023

* The Christmas sales period includes the last half of November and all of December

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Shoppers plan on spending an average of $189.59 during the Black Friday and Cyber Monday sales. That a 31% reduction from 2021.

Finder research

Recent research from Finder reveals that shoppers plan to spend an average of $189.59 during the Black Friday and Cyber Monday sales this year – a 31% reduction from 2021.

However, don’t mistake this decrease in spending for a lack of interest. Consumers are still on the hunt for unbeatable deals; they’re merely operating on a tighter budget. To rise above the competition and secure those precious customer conversions, your marketing strategy must work smarter, not harder. That’s why we’ve compiled five simple yet powerful tips to help you emerge victorious during this year’s sales season.

1. Prioritize segmentation and personalization on Black Friday

First, let’s start by making sure you’re reaching the right people during this period. Segmentation leads to increased relevancy, increased revenue, and less wastage. Most of your customers and prospects will want messages and offers throughout the holiday season. Some won’t want them all, but we’ll touch on that a little later.

Triggered emails

Triggered emails can be incredibly powerful when it comes to engaging customers and increasing conversions during Black Friday. By automating your marketing efforts, you can create personalized emails triggered by specific customer behaviors, such as cart abandonment. These automated emails can help you save time during the busy Black Friday period, while still delivering a customized and effective message to your customers. So, be sure to take advantage of triggered emails this Black Friday to drive sales and engagement.

Abandoned browse and cart popover

It’s worth considering having an on-site popover for abandoned browse or cart. This will help to keep shoppers engaged by displaying popovers that are triggered only when they are about to leave your online store. Through the popover, shoppers can be offered more holiday goodies, and returning customers can easily pick up where they left off with welcome-back popovers.

Re-engage

Why not use the start of the holiday period as a reason to win people back? For those who genuinely have stopped engaging with your emails, using the excitement of the holiday period can be a great way to bring them back into the fold. In the retail world, you’ll have offers and holiday-themed merchandise to sell them.

Be mindful that some contacts may only be seasonal shoppers. Their lack of engagement doesn’t mean they’re not interested; it’s just not their preferred time of year to shop. By using eRFM (engagement recency, frequency, monetary) segmentation, you can identify these customers based on their past purchases and target them differently. Remind them of what they bought last year and suggest similar or complementary items that might pique their interest for this season’s shopping.

Amend your content and cadence

One thing we see with a lot of brands is that even though customers have filled out the preference center, thoroughly browsed your website, and even purchased; many of the brands still fail to recognize any of that behavior. Email marketing campaigns just keep coming and coming without any acknowledgment of a purchase or browsing activities. Some have even sent offers for products customers have already purchased.

One of the easiest things you can do to ‘recognize’ a recipient is to know whether they have purchased recently, how much they’ve spent, and what they’ve purchased. You can then change your mailing cadence and content accordingly. AI-powered product recommendations based on what has already been purchased really do help at this point.

2. Leverage data insights

During the Black Friday sales period, it’s important to leverage customer data insights efficiently. Before the big day, check your automation programs’ performance and optimize them with AI-enhanced algorithms to gain a competitive edge.

Examine the performance of your revenue-generating programs, such as eRFM persona, and identify customer segments that are ready for conversion. Tailor your messaging and offers specifically for highly engaged frequent shoppers and new customers.

You can also use AI-powered predictive analytics to refine your tactics in real time, adapting to your target audience’s evolving needs and desires. This forward-looking approach ensures you stay ahead of the curve, targeting potential customers with razor-sharp precision far beyond standard marketing efforts.

Lastly, focus on nurturing high-value customers with tailored and exclusive offers and messaging designed to deepen their loyalty and boost long-term retention. Look into your predicted customer lifetime value (CLV) metrics to inform your marketing strategy.

3. Implement back-in-stock emails

Products may go out of stock for several reasons. The effect can be highly frustrating for customers who expect to be able to purchase what they want when they want it.

The damage of stockouts extends beyond the direct consequence of a lost sale. There’s the possibility that the shopper will turn to a competitor to find the items in question. Then, there’s the long-term impact on customer satisfaction caused by the frustrating experience.

Using dynamic content and AI-driven suggestions in your back-in-stock emails helps provide clear and current information about product availability and updates. This is especially important for the season’s hottest products. It allows you to build brand buzz and encourage more visits.

4. Focus on a seamless customer experience

Imagine your potential customer, sitting at their computer on Black Friday, with dozens of tabs open, browsing through different websites, and deciding where to buy that perfect gift. What makes your online store stand out? It’s the seamless customer experience you offer. From fast and affordable shipping to hassle-free returns, it’s these small but vital details that can truly make or break a sale. Here are some simple tips for ensuring a smooth journey from browsing to checkout:

Accurate tracking and delivery times

During the Black Friday period, ecommerce businesses need to provide accurate tracking for your shipping. Studies show that in recent years, customers value estimated delivery dates (EDDs) over faster shipping alternatives. Surprisingly, a reliable EDD means not only “no later than” but also “no earlier than”.

Some reasons, understandably, include not being home at the time of delivery and fear of packages sitting outside falling prey to pesky “porch pirates”. So, as part of your Black Friday and Cyber Monday (BFCM) checklist, be sure to review your shipping methods and integrations, delivery date accuracy, and communication methods to ensure your EDD is communicated clearly and as accurately as possible.

Additionally, as we get closer to Christmas, consider telling your customers about shipping deadlines for each method you offer. This transparency helps create realistic expectations and fosters exceptional customer service. This will allow your customers to plan for the last date they need to purchase to be delivered before Christmas. Clear and accurate shipping and delivery communication will go a long way this holiday season for you and your customers.

Easy-to-find return policy

The better your return policy is, the more confident customers will be when purchasing from your online store. Craft a simple, easy-to-understand return policy and ensure it is readily accessible on your website. This openness will reassure shoppers that they’re making the right choice, increasing the likelihood that they’ll click that “Add to Cart” button.

Streamlined checkout process

Don’t be the online store that loses customers at the last hurdle – the checkout stage. Implement a clean, user-friendly, and safe checkout process to minimize cart abandonment. Offer multiple payment options and mark security logos clearly to provide a sense of safety. Guest checkout options also help hesitant shoppers, who may not want to commit to creating a full account but are willing to give your store a try.

Provide outstanding customer support

Great customer support can tip the balance in your favor when shoppers are trying to decide between your store and another. Make sure it’s easy for customers to contact you with their questions or worries through options like live chat, email, or social media. And remember to teach your customer service team to handle any Black Friday-related concerns with friendliness and understanding.

5. Create a sense of urgency

Creating a sense of urgency in your emails can increase sales by over 300%. But how do you go about creating a sense of urgency, we hear you ask. Following these simple copywriting tips can help you write a sales-driving email marketing campaign.

Use compelling language

Utilizing limited-time language in your email subject line and calls to action (CTAs) is a smart way to create urgency and increase sales. Mirror this language with an action-based tone to create a seamless experience. Make sure your CTAs leave no doubt about what you’re offering and what the recipient should do next to get the offer.

FOMO (fear of missing out)

It might sound cheesy but it’s a powerful marketing tactic that you can draw on through your use of language. Use phrases like ‘biggest sale of the year’ or ‘best prices of the season’ in your Black Friday marketing to encourage recipients to shop before it’s too late.

Abandoned cart emails

There will always be some shoppers who don’t complete their purchases. It’s essential to ensure your abandoned cart automation program is in place before Black Friday. It becomes an even more important tactic for ecommerce businesses to win back these potential customers. Offering discounts and other promotions are the most effective way to bring shoppers back but don’t forget that Black Friday entails a much tighter window of opportunity than usual. Make sure to amend the timing of your abandoned cart emails accordingly.

Use Artificial intelligence (AI)

Artificial intelligence (AI) has revolutionized digital marketing, and Black Friday campaigns are no exception. With Dotdigital’s Winston AI, you can offer your customers real-time recommendations during the Black Friday sales period. In addition, Winston AI can help you craft captivating subject lines, ensuring your subscribers are drawn to and engaged with your Black Friday promotions.

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Artificial intelligence (AI) has reached an astounding level of realism, to the point that some tools can even fool people into thinking they are interacting with another human.

The eeriness doesn’t stop there. In a study published today in Psychological Science, we’ve discovered images of white faces generated by the popular StyleGAN2 algorithm look more “human” than actual people’s faces.

AI creates hyperrealistic faces

For our research, we showed 124 participants pictures of many different white faces and asked them to decide whether each face was real or generated by AI.

Half the pictures were of real faces, while half were AI-generated. If the participants had guessed randomly, we would expect them to be correct about half the time – akin to flipping a coin and getting tails half the time.

Instead, participants were systematically wrong, and were more likely to say AI-generated faces were real. On average, people labelled about 2 out of 3 of the AI-generated faces as human.

These results suggest AI-generated faces look more real than actual faces; we call this effect “hyperrealism”. They also suggest people, on average, aren’t very good at detecting AI-generated faces. You can compare for yourself the portraits of real people at the top of the page with the ones embedded below.

But perhaps people are aware of their own limitations, and therefore aren’t likely to fall prey to AI-generated faces online?

To find out, we asked participants how confident they felt about their decisions. Paradoxically, the people who were the worst at identifying AI impostors were the most confident in their guesses.

In other words, the people who were most susceptible to being tricked by AI weren’t even aware they were being deceived.

Biased training data deliver biased outputs

The fourth industrial revolution – which includes technologies such as AI, robotics and advanced computing – has profoundly changed the kinds of “faces” we see online.

AI-generated faces are readily available, and their use comes with both risks and benefits. Although they have been used to help find missing children, they have also been used in identity fraud, catfishing and cyber warfare.

People’s misplaced confidence in their ability to detect AI faces could make them more susceptible to deceptive practices. They may, for instance, readily hand over sensitive information to cybercriminals masquerading behind hyperrealistic AI identities.

Another worrying aspect of AI hyperrealism is that it’s racially biased. Using data from another study which also tested Asian and Black faces, we found only white AI-generated faces looked hyperreal.

When asked to decide whether faces of colour were human or AI-generated, participants guessed correctly about half the time – akin to guessing randomly.

This means white AI-generated faces look more real than AI-generated faces of colour, as well as white human faces.

Implications of bias and hyperrealistic AI

This racial bias likely stems from the fact that AI algorithms, including the one we tested, are often trained on images of mostly white faces.

Racial bias in algorithmic training can have serious implications. One recent study found self-driving cars are less likely to detect Black people, placing them at greater risk than white people. Both the companies producing AI, and the governments overseeing them, have a responsibility to ensure diverse representation and mitigate bias in AI.

The realism of AI-generated content also raises questions about our ability to accurately detect it and protect ourselves.

In our research, we identified several features that make white AI faces look hyperreal. For instance, they often have proportionate and familiar features, and they lack distinctive characteristics that make them stand out as “odd” from other faces. Participants misinterpreted these features as signs of “humanness”, leading to the hyperrealism effect.

At the same time, AI technology is advancing so rapidly it will be interesting to see how long these findings apply. There’s also no guarantee AI faces generated by other algorithms will differ from human faces in the same ways as those we tested.

Since our study was published, we have also tested the ability of AI detection technology to identify our AI faces. Although this technology claims to identify the particular type of AI faces we used with a high accuracy, it performed as poorly as our human participants.

Similarly, software for detecting AI writing has also had high rates of falsely accusing people of cheating – especially people whose native language is not English.

Managing the risks of AI

So how can people protect themselves from misidentifying AI-generated content as real?

One way is to simply be aware of how poorly people perform when tasked with separating AI-generated faces from real ones. If we are more wary of our own limitations on this front, we may be less easily influenced by what we see online – and can take additional steps to verify information when it matters.

Public policy also plays an important role. One option is to require the use of AI to be declared. However, this might not help, or may inadvertently provide a false sense of security when AI is used for deceptive purposes – in which case it is almost impossible to police.

Another approach is to focus on authenticating trusted sources. Similar to the “Made in Australia” or “European CE tag”, applying a trusted source badge – which can be verified and has to be earned through rigorous checks – could help users select reliable media.

The post Can you spot an AI-generated face? appeared first on Small Business Connections.

On top of spending more, Australian businesses are deploying key strategies to find efficiencies designed to unlock greater productivity. Over the last 12 months, 67% of businesses agreed that the digitisation and automation of payments had become an increased priority.

For those businesses that had already automated payments, 44% reported saving an average of 7.3 hours per week of their finance team’s time.

With time and cost efficiencies gained, digitising and automating payments have powered better business, including reducing human error (47%) and more accurate invoicing (45%) according to the research.

Additional findings include: 

• 66% of businesses said they will start automating or will further automate the process of receiving customer payments and processing invoices and purchase orders over the next 6 months.
• 47% of businesses are expecting to spend more on technology in the next six months, with 69% of these aiming to improve productivity. 
• 50% of decision makers who are planning on spending more on technology are doing so because they want to improve the speed and effectiveness of making and receiving payments.
• 81% of business decision makers agreed that managing cash flow and working capital have become more important over the last 12 months.
• 50% of businesses are expecting to spend more money on advertising, sales and marketing to differentiate themselves from competitors.
• 40% of those businesses expecting to spend more on advertising, sales and marketing are focusing their investment on new marketing and advertising channels, and 39% are promoting new products or services as part of their marketing strategy.

Lisa Belcher, Vice President of Merchant Partnerships at American Express says: “Once again we are reminded of the tenacity of Australian businesses as they pursue growth in the face of challenging economic conditions. The Amex Trendex: B2B Edition shows that regardless of their size, businesses are playing the long game, adapting where needed and seeking ways to improve efficiency and stand out from the competition.”

“The faster a business grows, the faster its payables and incoming revenue grows. Money is the lifeblood of any business, so it’s important that businesses continue to innovate their payment processes to avoid delays that can lead to major cash flow implications down the track.”

The research reveals a growing sense of optimism among Australian business decision makers. 75% reported feeling optimistic about the success of their company over the next 12 months – up from 69% on last year’s report.

Council of Small Business Organisations Australia’s (COSBOA) Chief Executive Officer, Luke Achterstraat said: “Australians have always been resilient, and this extends to how they manage businesses. Throughout the pandemic and the effects thereafter, small businesses have managed to pivot and re-prioritise to work smarter for their success. This latest research is abundantly clear: Australian businesses are aware of the challenges they face and are engaging in savvier ways to defy all obstacles.”

The post 50% of businesses to spend more on advertising, sales, and marketing appeared first on Small Business Connections.

Also read: Key insights and strategies: Australia facing surge in online sales

The post Social media management: A guide for small business appeared first on Small Business Connections.

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We’ve all seen so many people talk about the value of having a website: It helps build credibility, makes you look professional and serious, helps you reach a new audience, and drives traffic to your business, yada, yada, yada. In fact, there’s so much online about websites that even ChatGPT and Bard have a lot more to say than you’d expect. I know because I asked them both.

If you’re still unsure a website is worth your money and time, you’re likely a micro business with little to spend on things you don’t see immediate value in. If the internet hasn’t convinced you already, then AI recycling all those articles isn’t going to convince you either.

But I’d still maintain that you need a website. Hear me out.

The post Do consumers trust a small business without a website? appeared first on Small Business Connections.

Key Insights and Strategies for Retail’s Digital Evolution

Circana, the world’s leading advisor on consumer behaviour, has released its groundbreaking Industry Insights report into the state of e-commerce in Australia. The report, entitled “Unlocking The Next Wave Of E-Commerce Growth,” identifies the breadth of opportunity available to the retail sector to drive growth through the embrace and revolution of e-commerce.

The report identifies three important areas of focus for the retail sector:

• Continue enhancing e-commerce capability
• View e-commerce as more than online sales
• Execute across omni-channel touchpoints

Pandemic Peak

The pandemic helped to accelerate digital adoption across the world including Australia. Total Australian retail online dollar sales grew during the pandemic by 7.3x, outpacing total instore retail sales over the last five years. Online sales increased by 186 percent compared to the five year average. Despite this, in-store retail generated 2.6x more actual dollar growth.

Revenue Reversion and Recovery

The report outlines that while the online retail market moderated in the 2023 financial year, the outlook for 2024 is improving. Like the total market, online grocery is back in growth.

Penetration Plateau and Pick-Up

Enticing more shoppers online and encouraging increased online shopping frequency is now the new challenge for the retail sector. Circana research shows that post-pandemic customer acquisition is proving to be much more challenging. It is also proving more costly.

Online Outliers

Circana’s research shows that households with higher incomes and kids and pets have a higher propensity to buy online and have helped to drive the resurgence in online shopping.

Personalised Precision

Personalised precision is a key area of opportunity in the online space as the digital ecosystem allows brands to a build comprehensive customer profile ensuring a more personalised and customised shopping experience.

Flexing Fulfilment

Improved online customer experiences will be crucial to ensuring digital investments are a future industry tailwind. This applies to growing and maintaining a loyal online customer base with more experienced buyers prepared to shop around for a better service. The same goes for reengaging lapsed and hesitant buyers, the recruitment of whom remains vital.

Key Strategies for Retail’s Digital Evolution

Based on the insights from the Circana report, here are some key strategies that retailers can implement to drive growth through e-commerce:

• Invest in e-commerce capabilities. This includes developing a user-friendly website, offering a wide range of payment options, and providing fast and reliable delivery.
• View e-commerce as more than online sales. E-commerce can be used to improve the customer experience in a number of ways, such as providing personalized recommendations, offering loyalty programs, and making it easy for customers to return or exchange products.
• Execute across omni-channel touchpoints. Customers expect a seamless shopping experience across all channels, whether they are shopping online, in-store, or over the phone. Retailers need to make sure that their e-commerce and offline operations are integrated so that customers can easily move between channels.
• Focus on customer acquisition and retention. The cost of acquiring new customers is rising, so it is important for retailers to focus on retaining existing customers. This can be done by offering loyalty programs, providing excellent customer service, and tailoring the shopping experience to individual customers’ needs.
• Invest in personalized precision. Retailers can use data and analytics to better understand their customers and provide them with more personalized shopping experiences. This can lead to higher customer satisfaction, increased sales, and improved loyalty.

By implementing these strategies, retailers can position themselves for success in the future of e-commerce.

Also read: Top 6 ways Australian businesses are using AI in e-commerce right now

The post Latest trends: how businesses can drive e-commerce growth appeared first on Small Business Connections.

Key Takeaways

• 42% of Australian businesses are already using AI for e-commerce, with another 43% planning to do so
• 43% of Australian consumers would use AI to help them shop online, rising to 63% of younger shoppers
• A third of businesses are concerned AI will lead to more sophisticated cybercrime, and half of consumers are concerned that deepfakes will be used for fraud

Businesses Using AI for E-Commerce

The research found that Australian businesses are ahead of consumers in their adoption of AI. Although more than 2-in-5 Australian businesses (42%) are already using AI to power at least one aspect of their e-commerce activities, only about 1-in-5 Australian consumers (18%) have used a generative AI tool (such as ChatGPT, MidJourney or Dall-E). However, this figure rises to close to 1-in-3 for Australians under 40 years old (32% of whom have used a generative AI tool).

The top 6 uses of AI in e-commerce by Australian businesses today are:

1. Writing web content (e.g. website copy, social media, product descriptions etc) (15%)
2. Providing personalised product recommendations to customers (15%)
3. Creating visual design elements (e.g. graphics, web design etc)(14%)
4. Managing returns, exchanges or updates to consumers on delivery status (14%)
5. Responding to social media comments or messages (13%)
6. Detecting fake or auto-generated comments and reviews (12%)

Another 43% of Australian businesses who are not currently using AI for e-commerce say that they would like to, showing the appetite for adopting these emerging technologies to drive efficiencies and deliver improved customer experiences.

Australian Consumer Use of AI

Many Australian consumers also see the benefits of using AI for e-commerce. The 2023 PayPal eCommerce Index found that more than 2-in-5 Australians (43%) say they would use AI to help them shop online, with this rising to more than half of Australians (56%) under the age of 40. Pointing to potential future adoption, a much larger portion, two-thirds (63%), of Australia’s Gen Z shoppers (aged 18-26), would use AI for online shopping assistance.

“AI will give consumers powerful tools to help them shop smarter. This includes sophisticated product discovery to find the best price, order the perfect size, and optimise and track shipping and delivery across multiple stores. But more than that, AI can deliver personalised product recommendations that suit our individual tastes and budgets. This tailored approach will help us find the ideal items while creating a more engaging and enjoyable shopping experience,” said Andrew Toon, General Manager of PayPal Australia.

Beyond online shopping, half of Australians (50%) would use AI to help them in their day-to-day lives, with this rising to two-thirds for Australians under 40 years old. Top use cases for AI in daily life include meal planning (30%), drafting work-related documents such as emails and CVs (25%), creating workout plans (22%), online tutoring (22%) and to draft personal documents such as greeting cards or wedding speeches (18%). One-in-fourteen Australians (7%) would even use AI for a conversation partner.

The 2023 PayPal eCommerce Index also reveals that 43% of Australian businesses are already using AI across their broader business operations. The most prevalent uses being to design advertising and marketing materials (18%), bookkeeping or accounting tasks (18%), analysing market competition (16%), drafting business-related documents such as plans and emails, and creating staff rosters (12%).

Concerns Around AI

The research shows that while Australian businesses and consumers at a macro level see the benefits of AI for e-commerce, broader life, and business operations, they also recognise that AI may pose risks. While a third of businesses (34%) believe AI will enable greater efficiency and save time, both consumers (42%) and businesses (29%) worry that biased programming could lead AI to make inaccurate recommendations.

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