Research: 85% of Australians Would Switch Retailers if AI Finds a Better Deal

New Manhattan Associates research reveals how AI could challenge retailer loyalty

Australian retailers could face growing pressure to win over price-conscious shoppers this Black Friday and Christmas shopping period, with 85% of Australians willing to switch retailers if artificial intelligence (AI) found the same product for a better price elsewhere, according to new research commissioned by supply chain and commerce technology leader Manhattan Associates Inc. (NASDAQ: MANH).

The findings come after Australians spent a record $23.8 billion over the extended Black Friday shopping period last year, according to CommBank iQ, setting the stage for another competitive sales period.

AI could put retailer loyalty to the test

The survey of Australian consumers found that 83% expect AI to play a role in their shopping activities over the coming months. Finding the best deals or lowest prices (35%) and comparing products, brands or retailers (36%) were the two leading ways respondents expected to use the technology.

With AI making it easier for shoppers to compare offers from different retailers, businesses could find themselves competing for customers who might previously have gone straight to their preferred brands or stores. However, while a lower price might attract a shopper's attention, it won't necessarily be enough to secure the purchase.

“AI is giving consumers another way to compare retailers, and that could make it harder for businesses to rely on established customer loyalty. If a shopper can find the same product for less elsewhere, they may be more willing to consider a retailer they haven't purchased from before,”

said Raghav Sibal, Vice President APAC at Manhattan Associates.

“But price is only one part of the purchasing decision. Retailers also need to make sure the product is available, the delivery options are convenient, and the overall experience gives customers confidence to complete their purchase.”

A better price doesn't guarantee a sale

Despite their willingness to use AI to find better deals, most Australians are not prepared to take its recommendations at face value.

Nearly eight in ten Australians (78%) said they would check an AI-recommended deal against a retailer’s website or other sources before purchasing. Price accuracy was the biggest concern, with 52% saying they would be most likely to double-check whether the price or discount was correct, followed by product information and reviews (23%) and delivery times or costs (20%).

Retailer websites and apps also remain important to the purchasing process. While 35% of Australians said they would be comfortable completing a purchase directly through an AI shopping assistant, more than half (53%) would prefer to complete the transaction directly with the retailer.

Stock availability could influence where shoppers buy

Beyond price, the research suggests that product availability and fulfilment could play an important role in determining which retailer consumers choose.

When asked which factor should determine an AI recommendation between retailers offering the same product at the same price, nearby stock availability was the leading response (39%), ahead of free delivery (28%) and faster fulfilment (27%).

Australians also appear willing to share information to help AI find products they can purchase locally. Three in four respondents (75%) said they would share their location with an AI shopping assistant to find nearby stock.

“An AI recommendation might bring a customer to a retailer's website, but the retailer still needs to deliver on what that customer expects. If the price doesn't match, the product isn't available or the delivery timeframe isn't suitable, the customer can easily look elsewhere,”

said Sibal.

“During peak shopping periods, retailers need accurate inventory information across their sales channels and flexible fulfilment options to meet changing customer demand. Getting these fundamentals right will be important to converting AI-driven interest into sales, regardless of where a customer begins their shopping journey.”