Will you shop at Australia’s first AI-only retailer?

In the 2000’s Australia witnessed an explosion of online-only retailers like Adore Beauty (started in 2000), Appliances Online (2005), Kogan (2006) and Catch of the Day (2006). Eschewing expensive physical stores, these pure-play eCommerce stores passed the cost savings onto customers and gobbled up market-share and attention.

Fast-forward a decade to the mid-2010’s, and mobile-first retailing was the priority, with pure-play online retailers like The Iconic - winner of the inaugural ‘Best Mobile Commerce award in the 2014 Online Retail Industry Awards (ORIA’s) - unsurprisingly adapting quickly to introduce and popularise mCommerce with Australian shoppers.

Another 10 years on, and we are about to witness the next evolution, that of the first “AI-only retailers”. 

In the past month we have seen a glimpse of what is to come, with OpenAI showcasing the new (yet to be released) ChatGPT which can see, hear, talk and ‘think’.

This multi-modal capability is coming soon to a chatbot near you. Likewise with Apple’s preview of the new Siri, which will not only be conversational but also include the ability to (using App Intents) perform actions within other apps. For example, Siri will be able to order your Pad Thai from UberEats without you ever needing to open the UberEats app.

Bricks-and-mortar commerce was complimented by eCommerce, which was followed in turn by mCommerce. By abstracting away the user-interface, Siri will soon pave the way for an AI-only retail experience. We shall call it aiCommerce.

A true AI-only retailer would be embracing AI for all areas of the business, not just the shopper experience. Sam Altman (CEO of OpenAI) recently said: “In my little group chat with my tech CEO friends, there's this betting pool for the first year that there is a one-person billion-dollar company. Which would have been unimaginable without AI and now will happen”. Perhaps this one-person billion-dollar company could also be the first main-stream AI-only retailer?

As with the online-retailers 2005 and 2006, who were able to save millions on shop fitouts, rent and floor staff, an AI-only retailer could save millions by automating (with AI) every part of their operations, customer support and marketing. The AI-only user experience (facilitated via Siri, Alexa, ChatGPT and other digital assistants) would mean further savings by not having to develop and support a myriad of mobile apps, web sites and mobile sites.

Many online-only retailers are taking an “AI-first” approach, making significant investments into AI, recognising as have Temple & Webster that;

“Most areas in our business can be, and will be, materially disrupted by AI”

Traditional retailers like Coles are also leaning in, using AI to predict inventory levels, deliver personalised product recommendations for FlyBuys customers, computer vision in the checkout process and synthesising customer surveys, “We are AI-ready and looking forward to what the technology can do for our people,” said Silvio Giorgio, GM of Data & Intelligence at Coles Group. Research by Avanade Australia showed that “In 2024, artificial intelligence (AI) continues to take centre stage across industries in Australia – with the retail sector at the forefront of adoption where 91% of ANZ retail businesses are investing in generative AI”. 

But investing to be AI-first is not AI-only. I believe it will need to be an entirely new business built from the ground up that could truly claim this title. It could be from a new founder, or a spin-off from an existing retailer wishing to innovate. 

This new retail ‘brand’ (will it need a brand?) would likely be an AI shopfront for other’s products, with logistics and distribution being performed by 3rd parties. Not too different from how Cettire and other online marketplaces operate today. The interface would be conversational, but this doesn’t mean it can’t also display product images or video.

Your digital shopper assistant (e.g. Siri) will possess enormous knowledge of your likes, your dislikes, your prior purchases, your health, fitness levels, weight, BMI (the list goes on!). It’s not hard to imagine a magical AI-powered shopping experience, where an AI-only retailer that I shop with notifies Siri that a new pair of sneakers I might will like have arrived, and Siri offers to purchase them for me. My credit-card details are on file, my address details are saved, and so with just my Face ID the sale is made.

For retailers or brands that rely on a direct customer relationship this might seem a dystopian future. But, perhaps an inevitable one. In this ‘Siri as personal shopper’ scenario, does the “art of retail buying” remain a human role with intuition and taste, or will AI crunch the numbers and make beautiful merchandise predictions just as Midjourney can create jaw-dropping AI artwork?

The new Siri and new ChatGPT will be released later in 2024, and I expect it will take several years before we see an Australian AI-only retailer become mainstream. Online shopping was possible in the mid-1990s (Amazon launched in 1994), but most pure-play online retailers in Australia were a decade later. Likewise, the first iPhone was released in 2007, but it wasn’t until 2014 that mobile commerce was significant enough to warrant a category in the ORIA awards. 

For now, we will have to wait. But with the current “AI warp speed” we’re seeing, we might not have to wait too long. 

If you have the aspiration to start the first pure-play AI retailer, Time Under Tension would love to help!