Transforming Customer Experience with Generative AI: Insights from Capgemini’s Consumer Trends Report
Generative AI (Gen AI) is redefining the landscape of customer experience (CX) by integrating personalization and efficiency into shopping. According to Capgemini Research Institute’s 2025 consumer trends report, Gen AI adoption has surged, with 71% of consumers wanting it embedded into their shopping journeys. This growing demand highlights the need for brands and retailers to prioritize CX enhancements powered by advanced technologies.
The Shift to Generative AI in Search and Recommendations
Consumers are increasingly turning to Gen AI tools for product and service recommendations. Over half (58%) of consumers now use Gen AI tools instead of traditional search engines, a remarkable leap from just 25% in 2023. This shift underlines the importance of personalized, accurate, and efficient recommendations in modern CX. Transitioning to Gen AI allows retailers to consolidate search results across platforms, enabling consumers to access curated options effortlessly.
Moreover, the younger demographic, particularly Gen Z and millennials, is driving this trend. Two-thirds of this group demand hyper-personalized content and recommendations, reflecting their desire for unique and relevant shopping experiences. Retailers that align their strategies with these preferences stand a better chance of fostering loyalty and engagement.
Personalized Ads and Social Commerce with Generative AI
Advertisements on retailer websites and apps have proven effective, influencing 67% of consumers during product searches. In contrast, only 63% notice ads on social media platforms. The increasing impact of retailer-specific ads highlights a growing opportunity for brands to refine their digital ad strategies. However, generic ads remain a pain point, with 59% of consumers expressing dissatisfaction over irrelevant promotions.
Social commerce, fueled by platforms like Instagram and TikTok, is also transforming CX. More than half of consumers discover new products through social media, up from 32% in late 2022. Gen Z, in particular, is embracing AI influencers, with nearly 70% learning about products through them. By leveraging these platforms and influencers, retailers can engage consumers earlier in their purchasing journeys, creating a seamless blend of inspiration and action.
Sustainability and Customer Retention with Generative AI
Sustainability is now a critical factor influencing purchasing decisions, as 64% of consumers prefer buying from eco-conscious brands. However, while sustainability resonates with many, fewer consumers are willing to pay a premium for it. The proportion willing to pay over 5% extra has declined steadily, indicating that affordability is a key consideration.
Retailers must address this paradox by integrating sustainable practices without burdening consumers with additional costs. Carbon labeling and food-waste reduction initiatives have gained traction, aligning with consumer expectations for transparency. Providing detailed product information, such as nutritional data, also enhances CX, as 67% of consumers are willing to switch products based on these insights.
Quick Commerce and Delivery Expectations
Fast and efficient delivery options are becoming non-negotiable for consumers. The demand for quick commerce has skyrocketed, with 70% now willing to pay extra for faster deliveries, compared to 41% in 2023. On average, consumers are willing to pay 9% of their order value for delivery within two hours or less.
Retailers in regions such as India, Germany, and France are leading this trend, integrating rapid delivery options into their business models. Meanwhile, the U.S. lags in adopting this format, presenting an untapped opportunity for American retailers to differentiate themselves.
Generative AI: Enhancing Online and In-Store Experiences
Despite the enthusiasm for Gen AI, consumer satisfaction with the technology has dipped slightly, from 41% in 2023 to 37% in 2024. This decline emphasizes the need for retailers to deploy Gen AI effectively, focusing on where and how consumers want it integrated.
For example, AI-powered tools can offer hyper-personalized in-store experiences, such as smart shopping carts and interactive touchscreens. Over half of consumers prefer these innovative touchpoints to traditional in-store advertisements, which are often perceived as generic.
Additionally, retailers are turning to retail media networks (RMNs) to capture attention and drive conversions. By investing in RMNs, brands can deliver targeted content, ensuring ads resonate with individual preferences and purchasing behaviors.
The Role of CX in Brand Loyalty
Poor CX remains one of the top reasons consumers switch brands or retailers, alongside concerns about sustainability. Despite loyalty programs, over half (53%) of consumers frequently switch brands due to a lack of personalization and subpar experiences.
To combat this, retailers must place consumers at the center of their strategies, leveraging AI and Gen AI to create meaningful interactions. By addressing individual needs and preferences, brands can enhance loyalty and reduce churn.
Conclusion
Capgemini’s report underscores the transformative potential of Gen AI in shaping CX. From personalized recommendations and efficient deliveries to sustainable practices and innovative in-store experiences, retailers must adapt to evolving consumer expectations.
The integration of Gen AI offers a path to not only meet these expectations but also build stronger, long-lasting connections with customers. By prioritizing personalization, sustainability, and efficiency, brands can thrive in a competitive landscape while delivering exceptional experiences that truly resonate.
