Are we chatting or shopping? How it’s hard to tell in our new AI ‘high street’

For years now, the rhythm of online shopping seemed mapped out: search, scroll, cart, checkout.

Then social platforms like Facebook and Instagram shook things up by landing products directly into your feed. Now OpenAI and platforms like Stripe are raising the bar by ‘dropping by’ like old friends while we work, play, love and live.

But do we want, and can we afford to constantly purchase? or do we need sacred ‘us’ time, free from the all-seeing marketplace? And are brands ready for so-called conversational shopping?

We spoke to Dr Amr Al Khateeb and Dr Rajab Ghandour from Liverpool Business School about AI reshaping consumer behaviour and the ethical responsibilities marketers must now embrace.

How is AI shaping how we shop?

"AI shopping tools are now motivating consumers to discover and consider brands they might not have thought about before, rewriting the rules of brand visibility and brand loyalty. In the UK, belief in AI’s ability to improve the customer experience has risen to 35%, up from 25% last year. Additionally, 57% of UK consumers are now likely to engage with AI-powered chatbots during their shopping journey. In the US, at least a third of adult consumers believe that AI-generated targeted ads will have a major personal impact on them.

"AI is also transforming in-store experiences. Tools like smart mirrors allow us to virtually try on clothes and enable faster checkouts."

How many of us now shop online, and how quickly are we starting to shop on social media?

"Online influence is pervasive regardless of where the purchase happens. A quick trip to a local shop might be preceded by checking prices online or reading a post on a forum about store-exclusive discounts. What truly matters is the extent to which consumers are influenced by the internet and social media and that impact is massive. Even anti-brand consumers are inspired by influencers. Omnichannel integration has made it easier to complete purchases smoothly across platforms."

The question isn't whether to use AI or not, but rather when or how to use it and how well it can be blended to human touchpoints.

Dr Amr Al-Khateeb, Senior Lecturer in Marketing, Liverpool Business School

What do you see as the advantages to customer and to retailer?

"AI enables much greater personalisation and tailoring or products and services. AI-powered tools allow consumers to be fully immersed in the shopping experience without leaving home and virtual assistants and chatbots make it quicker and easier.

"For retailers, personalisation increases conversion rates and boost revenue. Chatbots reduce operational costs and AI provides capabilities to analyse consumer data, enabling more effective marketing and advertising. Ultimately, AI empowers retailers to operate smarter and connect more meaningfully with customers. It’s a game changer for efficiency and profitability.

"The question isn’t whether to use AI but rather when and how to use it and how well it can be blended with human touchpoints."

Is the human connection broken now then between shopkeeper and customer?

"Certainly not but AI has reshaped that connection. Consumers now expect certain aspects of their experience to be AI-assisted, and that’s a positive development. For example, a chatbot providing product information in the evening may be more efficient than waiting for a human operator halfway across the world. At the same time, consumers still value human interaction. The question isn’t whether to use AI but rather when and how to use it and how well it can be blended with human touchpoints."

Can you tell us what you mean by AI is intensifying fragmentation, creating distinct consumer segments?

"Yes, we have two main consumer camps in the market: Accelerators who are enthusiastic adopters who embrace AI-driven tools and value convenience, personalisation, and speed; and Anchors who are consumers who resist AI, often due to concerns about trust, transparency, or loss of human touch. They prefer traditional, human-centric experiences.

"Retailers are now able to target ‘segments’ with unprecedented precision, leading to premiumisation where high-value consumers are offered luxury products, while price-sensitive consumers are shown budget options.

What about product choice?

"Popularity bias is a concern. Algorithms often favour popular items or content, amplifying majority preferences and marginalising niche ones. This becomes more problematic when algorithm miscalibration occurs where AI recommendations don’t align with a user’s true preferences, further sidelining minority consumers."

We need clear guidelines because regulators are playing catch-up, allowing companies to exploit the gaps. 

Dr Rajab Gandour, Liverpool Business School

What questions are you asking in your research around AI marketing?

"Our big focus is around how the marketplace can ensure responsible, transparent, and fair practices. One of the first questions is How do companies ensure customers know or understand the AI role in marketing? How do we ensure customer privacy, and how do we prevent AI from creating misleading or harmful marketing? We are also struck by how often customers might not even realise AI is shaping their ads, which feels like a trust gap. And without clear rules, AI could amplify unethical marketing tactics."

When you open new doors, there are always draughts. So, is there a heightened risk to consumers or of new unethical sales methods?

"Certainly. AI can track detailed customer data, such as browsing habits or location, to create highly targeted ads. Without clear consent, this poses serious privacy risks. AI introduces new tactics like dynamic pricing, where prices change based on demand or user profiles. This can feel unfair if not transparent. For example, charging more to a customer who appears desperate for a product. We need clear guidelines because regulators are still playing catch-up, allowing companies to exploit the gaps.

"A few years ago, we thought we were moving toward a cookieless world. But Google’s decision to backtrack on third-party cookies shows that advertisers still hold significant power, even influencing tech giants not to change the rules too drastically."

Dr Al Khateeb and Ghandour recently spoke at The Chartered Institute of Marketing’s inaugural Northern Powerhouse: Strategies for Success Conference in Manchester.