CHICAGO — If enough consumers adopt agentic artificial intelligence (AI) to make their buying decisions, it could boost opportunities for niche brands focused on innovation and agile R&D. The expanded use of “a-commerce” also may mean legacy brands will continue to lose market share unless they act to keep pace.
That’s according to a joint report from the consultancy Kearney and the market research company NIQ titled, “The new growth frontier: How agentic commerce and AI tilt the scales toward challenger brands.” The report analyzed data from 90-plus countries and about $7.2 trillion in consumer spending.
Volume and scale traditionally have equaled success for large consumer packaged goods (CPG) companies, the report said, but innovation is becoming the main growth driver for food and beverage brands. And, it noted, if products can also save time and deliver convenience, some consumers — particularly younger generations — are willing to pay more.
Other trends are at work as well. One is consumers expect more personalized products that serve specific niches and not just a category, said Katherine Black, Kearney partner and co-author of the report.
“I also think that AI is beginning to change the economics so that it’s not just the big brands that always win, and that means some smaller brands can come online and develop some more niche products and take market share in that area,” she said. “That does really disrupt the large manufacturer’s business model, which is built on volume.”
Faster product development
Additional disruption has come to the product development process since launches that used to take a year or more can now be completed in a matter of months, Black said. For example, she said Kearney handled a launch for an entirely new company on an entirely new product that took a lot less time using AI.
“We did a whole new launch from development to launch in six months,” she said. “Certainly, there are capabilities out there in the food space. … It’s a really fast process now.”
Niche brands are seeing new opportunities within this AI-fueled ecosystem, particularly within the past three years, the Kearney/NIQ report found. It’s a turnaround from the barriers to market they might have experienced a few years ago.
“A founder may (spend) thousands of dollars to test Meta ads to see if there is demand, maybe put on a Kickstarter to see if there’s demand, take that funding to a manufacturer and go out and sell it a proof point,” Black said. “That didn’t exist even a decade ago.”
The trends are changing the CPG product mix that’s available on-shelf and online and the ways consumers are accessing the products, including through the use of a-commerce.
The developing use of a-commerce will require retailers to have more specific or criteria-based online interactions with customers.
| Photo: ©MANIT – STOCK.ADOBE.COMHow agentic AI works
Consumers can program an AI agent on a phone or a browser-based platform to act on their behalf by ordering certain products and arranging for payment and delivery. The agent also may analyze situations and decide the best solution such as when specific products are available at a better price.
“People are using agentic commerce more in deals, looking for special discounts, the best option for whatever their need state is, maybe cost containment,” Black said. “What we expect longer term is (consumers will) eventually begin to turn more and more to the agentic agent, maybe use it for a toilet paper buy and household goods where people tend to repeat.”
She said consumers are less likely to use a-commerce to purchase clothing, pet food and baby supplies because they want to be more directly involved.
The use of agentic AI requires a certain level of trust, which is likely to develop only through transparency and familiarity, according to recent research from Acosta Group. That research found 12% of consumers trust AI to complete purchases for them, but 82% were concerned about privacy and data use, unapproved purchases, frauds or scams and lack of control.
Those consumers who do find agentic AI reliable and trustworthy for retail purchases are likely to lean on the process more over time, Black said.
“For some consumers, they’re going to delegate more and more to the agent, much like 30 years ago you used to pay all your bills (by mail), but now it’s online bill pay,” she said. “That will go on with grocery shopping, replenishing household goods or whatever, particularly with consumers willing to take risks.”
The developing use of a-commerce will require retailers to have more specific or criteria-based online interactions with customers, Black said, adding that in-store interactions will have to be experiential.
“Consumers are going to look to interact with people, to get advice, to see and touch and taste things,” she said.
Discoverability is key
The Kearney/NIQ report found that 74% of consumers use AI to research products, 31% of AI shoppers directly shop with a retailer or brand due to having an emotional connection, 11% aren’t comfortable sharing their brand preferences with AI and 6% will direct their AI to recommend a brand, even if it costs more.
It’s hard to tell how this new world of a-commerce will shake out with consumers and how manufacturers and retailers will adapt targeted AI-based advertising to enhance sales. But, as the report observed, the advertising ecosystem also is evolving with the use via LLMs (large language models) of OpenAI’s ChatGPT, Google’s Gemini, Perplexity AI and Anthropic’s Claude.
“There’s definitely mixed sentiment on how ads are going to end up,” Black said. “So, I’d say it’s early days on exactly what’s going to happen here.”
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