5 minute read 14 Jun 2024
AI, Cybersecurity, and Human Role Shape Online Shopping

How AI, cybersecurity and human interaction are shaping online shopping

By Colette Devey

EY Ireland Chief Risk Officer

Helping businesses navigate uncertainty and build trust. Recognised for bringing fresh perspectives on the Risk, Internal Controls, and Internal Audit functions of the future. Avid consumer.

Contributors
5 minute read 14 Jun 2024

Discover how AI, cybersecurity, and human interaction are reshaping online shopping and Irish consumer habits, as revealed by the EY Future Consumer Index.

In brief
  • AI impacts Irish online shopping, yet scepticism remains due to lower understanding among consumers.
  • Data privacy and cybersecurity fears are paramount among Irish consumers.
  • The human element retains significance in e-commerce and customer service.

Around the world and here in Ireland, a digital revolution is transforming how people shop online, with artificial intelligence (AI) now leading the charge. But this acceleration in the role of emerging tech brings a complex challenge: balancing the innovative power of AI with consumer demands and concerns. The latest EY Future Consumer Index, surveying 500 Irish consumers reveals a mix of attitudes and expectations that are radically shaping the next wave of e-commerce.

The shifting habits of online shopping

The study shows the Irish consumer base in flux, 18% are buying more online than last year, 54% maintain the same, and 28% shop online less often, indicating a reassessment of the role of e-commerce. With affordability still front of mind for many Irish consumers, seeking value via online is evident, with 60% looking for discounts, 47% using shopping apps, and 42% joining rewards programs, indicating increased engagement for brands who offer benefits and discounts. Social media influencers are also significantly impacting consumer behaviour, with 39% of consumers interacting with them, 67% trusting them, and 58% making purchases based on their recommendations.

Perceptions of AI in E-Commerce

While more than 70% of the respondents are engaging with AI technology on e-commerce platforms, the perceived usefulness of this technology is notably lower for Irish consumers than their global counterparts. 54% of Irish consumers feel that AI-driven product recommendations in their shopping experience are not very useful, in stark contrast to just 32% globally.

Usefulness of AI-driven product recommendations in shopping experience

  • Chart description

    54% of Irish consumers feel that AI-driven product recommendations in their shopping experience are not very useful, in stark contrast to just 32% globally.

Furthermore, only 8% of Irish consumers believe that AI greatly enhances the online shopping experience, compared to 19% of consumers worldwide. This data suggests a more critical or perhaps underwhelmed view of AI's impact on e-commerce among consumers in Ireland, highlighting a potential disconnect between the capabilities of AI and consumer desires and expectations. Notably for retailers and consumer-facing businesses, this is a call to action to help consumers better understand the game-changing value that AI will deliver.

Extent to which AI is believed to enhance the online shopping experience

  • Chart description

    8% of Irish consumers believe that AI greatly enhances the online shopping experience, compared to 18% of consumers worldwide.

Privacy and trust in the age of AI

Consumer trust is crucial in today's digital era, unfortunately all too often marked by data breaches and identity theft. AI understanding is key to this, with 96% of Irish consumers aware of AI's role in their lives, yet only 16% have a good grasp of the technology, which is below the global average. This lack of AI literacy may be affecting trust, as seen in the low confidence Irish consumers have in AI when it comes to financial management (70%), marketing photo enhancement (71%), and medical advice (66%). Conversely, 65% trust AI for personalised promotions and online deals.

Eoin's quote

“Consumer trust is essential for AI adoption. With data privacy concerns and some scepticism about the true capabilities of AI, businesses need to focus on transparency and ethical AI. The impending EU AI Act will significantly enhance consumer protection in the use of AI and will be a critical vehicle for businesses to win and retain the trust of their customers around the use of AI in general, and especially in the world of e-commerce. By demystifying AI and respecting individual rights, we can turn scepticism into support for AI that will improve our lives and empowers us as consumers.” said Eoin O'Reilly, Partner, Head of AI & Data at EY Ireland

Cybersecurity concerns

Privacy concerns are paramount, with a significant 72% of consumers cautious about sharing data with brands, signalling that businesses must work to earn trust amidst prevalent data breaches and identity theft. Moreover, cybersecurity fears are elevated, with 83% of consumers stating they would not continue membership, subscription or contract with an organisation who experience a major cyber breach. Specific concerns include identity theft (60%), viruses (59%), and selling information to third parties (58%), emphasising the urgent need for strong digital defences to safeguard consumer trust.

Concerns when engaging online

  • Chart description

    The top 3 concerns when engaging online include identity theft (60%), viruses (59%), and selling information to third parties (58%).

Consumer businesses must respond to these growing digital threats, whilst again utilising impending legislation. An example of such legislation includes the NIS2 Directive, which offers a chance for many businesses to enhance cybersecurity and comply with regulations. Adopting cyber risk management and reporting guidelines can help organisations improve their defences against cyber threats and build consumer trust.

Puneet's quote

“As consumers increasingly embrace digital platforms to enhance their shopping experiences, the importance of cybersecurity in the consumer space has never been more critical. In an era where a single breach can erode trust and loyalty built over years, businesses must prioritise robust cybersecurity measures as a cornerstone of their customer value proposition. By staying ahead of the curve and proactively adopting frameworks like the EU's NIS2 Directive, organisations can not only meet regulatory demands but also lead the way in safeguarding their customers' data.  The benefits of robust cybersecurity extend beyond mere protection. They encompass the confidence and peace of mind that customers feel, knowing that their chosen brands are vigilant guardians of their digital data. Investment in cybersecurity forms a crucial part of a resilient business strategy, and by placing data and privacy security at the forefront, businesses can create a value differentiator for their customers.” said Puneet Kukreja, Cyber Security Leader at EY UK & Ireland

Data sharing and the human touch

When it comes to data sharing, a considerable 39% are unwilling to part with their information for recommendations, deals, and advertisements, highlighting a desire for privacy over personalisation. Conversely, 50% are open to sharing anonymous data if it leads to cheaper products, suggesting a nuanced approach to privacy that balances affordability with confidentiality.

The human touch remains a cherished element in the digital realm, with 64% of Irish consumers preferring online platforms that offer human customer service support. This preference is particularly pronounced for addressing post-purchase issues, returns, and refunds, indicating that AI cannot fully replace the empathy and understanding of human interaction. 

Colette's quote

“Adapting to the evolving needs of consumers in this digital age requires a forward-thinking approach that embraces the huge potential that AI and other emerging technologies will deliver. The key to serving the changing consumer needs lies in understanding the delicate balance between technology and human insight. Businesses that can harness the power of AI to offer personalised experiences while maintaining a strong ethical framework for data privacy will get ahead. It's about leveraging technology to enhance, not replace, the human elements of trust and connection that are fundamental to consumer relationships. By doing so, we can create a retail environment that not only meets the expectations of the Irish consumer but also sets a new standard for the global digital marketplace.” said Colette Devey, Consulting Partner and Consumer Sector Lead at EY Ireland

Summary

In conclusion, the latest EY Future Consumer Index shows Irish consumers are at a crossroads, embracing the convenience of AI while seeking the need and reassurance of human connection throughout the consumer journey. As consumer-facing businesses and policymakers chart a course through this digital landscape, they must navigate the AI paradox with a focus on consumer trust, privacy, and the irreplaceable value of the human touch.

About this article

By Colette Devey

EY Ireland Chief Risk Officer

Helping businesses navigate uncertainty and build trust. Recognised for bringing fresh perspectives on the Risk, Internal Controls, and Internal Audit functions of the future. Avid consumer.

Contributors