Algolia research: grocery retailers risk losing millions of pounds every week to AI shopping tools

Many shoppers would switch from their usual online supermarket to a third-party AI-powered shopping application such as ChatGPT, according to new research from Algolia involving 2,000 Brits. 

The UK online grocery market was worth £23.4 billion in 2024. If retailers fail to keep up with the shift, they risk losing £500 million every week to AI driven alternatives, Algolia claims. And younger consumers are leading the change, with 70% of 25–34-year-olds saying they would make the switch. 

Bernadette Nixon, CEO at Algolia, comments: “Almost half of consumers already use AI to help them decide what household items to buy. Retailers need to ensure their websites offer equally smart and intuitive experiences, or risk losing customers to third-party AI platforms.”

“This is especially important for younger families. Consumers in their late twenties and early thirties are entering peak spending years - starting households, buying homes, and raising children. Supermarkets that fail to engage them now risk losing them just as their lifetime value is set to climb.” 

High value customers are particularly at risk. Two-thirds of those earning over £75,000, and 61% of those spending more than £150 weekly, say they would switch to AI tools. However, the research also shows strong demand for supermarket-owned shopping tools.

42% of shoppers would choose to shop with a supermarket offering AI powered features such as recipe ingredient finders or cheaper product swaps, while 44% said they would value conversational search, such as, “show me healthy snacks for toddlers”, to make their online shop easier.  

Yet ongoing frustrations with current supermarket platform remain. Half of those surveyed have abandoned an online shop due to difficulties finding products or making substitutions and 31% said “time-consuming scrolling” was their biggest frustration. 

Nixon says: “Shoppers have told us exactly where supermarkets are falling short: hard-to-find products, clunky search, and limited substitutions. By building AI powered search, conversational assistants and smarter swaps directly into their platforms, supermarkets can remove those pain points and give customers reasons to stay loyal.” 

2025 RTIH INNOVATION AWARDS

AI will be a key focus area at the 2025 RTIH Innovation Awards.

The awards. which are now closed for entries with our finalists and shortlists being announced this week, celebrate global tech innovation in a fast moving omnichannel world.

Our 2024 hall of fame entrants were revealed during an event which took place at RIBA’s 66 Portland Place HQ in Central London on 21st November, and consisted of a drinks reception, three course meal, and awards ceremony presided over by comedian Lucy Porter

In his welcome speech, Scott Thompson, Founder and Editor, RTIH, said: “The event is now into its sixth year and what a journey it has been. The awards started life as an online only affair during the Covid outbreak, before launching as a small scale in real life event and growing year on year to the point where we’re now selling out this fine, historic venue.”

He added: “Congratulations to all of our finalists. Many submissions did not make it through to the final stage, and getting to this point is no mean feat. Checkout-free stores, automated supply chains, immersive experiences, on-demand delivery, next generation loyalty offerings, inclusive retail, green technology. We’ve got all the cool stuff covered this evening.”

“But just importantly we’ve got lots of great examples of companies taking innovative tech and making it usable in everyday operations - resulting in more efficiency and profitability in all areas.”

Congratulations to our 2024 winners, and a big thank you to our sponsors, judging panel, the legend that is Lucy Porter, and all those who attended November's gathering. 

For further information on the 2025 RTIH Innovation Awards, please fill in the below form and we will get back to you asap.