E-commerce is changing as algorithms start competing for customers

McKinsey argues that European e-commerce is accelerating again. After the post-pandemic slowdown, it is estimated to be growing by five to seven percent a year, mainly thanks to marketplaces. At the same time, the nature of competition is changing. Customers no longer need to browse dozens of pages. AI systems are starting to handle part of the selection by comparing price, availability, delivery, brand and other conditions. The article describes agentic commerce, commerce in which an AI system not only recommends but can also complete several steps of the purchase journey. A customer sets constraints such as price, brand, delivery speed or a sustainability requirement, and the system builds an offer. McKinsey says 38 percent of European consumers already use generative AI when searching for products and making purchase decisions. Boris Ewenstein, chief executive of Otto, says in the article: AI is the next paradigm shift in e-commerce. He compares the shift to the move from catalogues to the internet, from the internet to mobile and from mobile to platforms. The exact impact will depend on details that are not visible in advertising. If AI chooses between sellers, website appearance is not enough. Product data quality, stock accuracy, delivery reliability and pricing logic will matter. Another change is the link between commerce and media. According to McKinsey, retail media is becoming a source of margins that can be up to ten times higher than margins in ordinary retail. A seller is no longer selling only goods, but also customer attention. AI then decides which message appears, to whom, in what format and with what commercial result. For European companies, this is a harder task than launching another chatbot. They must make data machine-readable, align prices across channels, connect warehouses with stores and set rules for personal data protection. Companies that stop at advertising optimisation will compete for leftover traffic. Companies that prepare their systems for algorithmic decision-making may enter the purchase shortlist before the customer opens a website. Terms: Agentic commerce is a purchase process where AI compares offers and can perform some steps for the customer. Retail media means a retailer’s advertising space and data used as a separate business. Product data are structured details about goods, price, availability and delivery.

E-commerce is changing as algorithms start competing for customers

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