Vivek Pandya, lead analyst at Adobe Digital Insights, sat down with InternetRetailing ahead of the upcoming Adobe Digital Insights Holiday Shopping Forecast to share some of the ways in which data is transforming retail – and how generative AI is emerging as a powerful force in shaping the future of shopping.
Data is king in the fast-moving world of internet retailing. Data analysis is a central pillar of any retail strategy – but in addition to tracking user behaviour and sales, retailers want to know where they sit in the market and how their competitors might be performing.
This is where Adobe Analytics, with its unique industry-wide view, comes into its own. Retailers opt in to share anonymised, aggregated data, allowing Adobe Analytics to benchmark across the entire market, not just individual businesses. That means real-time transaction data, customer journeys from search ads to social media to generative AI platforms, and trends across more than 100 million product SKUs. It’s fresh, detailed, and gives a comprehensive picture of the retail landscape.
Vivek Pandya is lead analyst at Adobe Digital Insights, the public-facing research initiative by Adobe that publishes market-wide reports and trends based on aggregated data from Adobe Analytics users, including the much-anticipated Holiday Shopping Forecast. “The granularity of our data lets us spot shifts in consumer behaviour almost as they happen,” he explains. “We see spikes during Black Friday, Cyber Monday, even sports finals – these ‘eventised’ moments drive spending. Retailers who align their strategies with these trends, whether through pricing, product selection, or influencer marketing, tend to outperform.”
Economic pressures are also shaping customer behaviour, as Pandya points out: “We’ve seen consumers trade down to cheaper goods or hunt for deals when inflation hits. These patterns are visible in the data.”
Rise of GenAI
One of the most striking developments, according to Pandya, is the surge in traffic from generative AI platforms. “Over the past year, we’ve seen a 700% increase in traffic coming from platforms like ChatGPT,” he says. “Consumers are using these tools for personalised recommendations, price comparisons, and even gift ideas. What’s remarkable is the trust – over 90% of users rely on AI-generated suggestions. This holiday season will be the first where GenAI plays a major role in shaping shopping journeys.”
While Gen Z leads the charge, Pandya notes that GenAI adoption spans generations. “Millennials and older cohorts are experimenting with these tools too. No one wants to be left behind,” he says. “Social media influencers are also key – they often convert audiences at higher rates than traditional ads. Retailers need to rethink their affiliate and influencer strategies to stay relevant.”
Distinguishing between fleeting trends and lasting changes is crucial, Pandya explains. “We look for sustained changes beyond seasonal fluctuations. ‘Buy now, pay later’ surged during inflation, but even as inflation eased, it still accounts for about 15% of online spend. That persistence signals a long-term shift. Our historical data helps us identify when a trend becomes a new habit.”
Predicting economic shifts
Another interesting thing from an analytic perspective is that online retail often mirrors – or even predicts – broader economic shifts. “We noticed deflation in online prices before it appeared in the wider economy,” Pandya says. “During inflation, consumers used ‘buy now, pay later’ for essentials, not just big-ticket items. Policy changes – like tariffs in the US or the UK’s Autumn Budget – can also impact pricing and consumer confidence, which we track closely.”
There are, he says, key differences between the UK and US markets. “In 2022, the UK saw negative growth month after month due to the cost-of-living crisis, while the US experienced strong growth thanks to stimulus and low unemployment. Now, the UK is recovering, but each market has its own dynamics. We’re always comparing trends to see what might be a leading indicator.”
So, what are the most significant shifts in consumer behaviour from an analyst’s point of view? “The explosion of GenAI-driven shopping is the biggest story,” Pandya says. “Consumers are relying on AI for everything from product discovery to price comparison.
“We’re also seeing nuanced spending patterns – like the ‘lipstick effect,’ where people splurge on small luxuries during tough times. And the push toward frictionless, personalised shopping experiences continues to accelerate,” he adds.
As retailers gear up for the busiest time of the year, all eyes are on the upcoming Adobe Digital Insights Holiday Shopping Forecast – the most important retail analysis Adobe publishes annually. This comprehensive report will offer deep insights into UK online retail activity throughout the festive season, helping businesses understand emerging trends, consumer expectations, and the evolving role of technologies like generative AI. With Adobe’s market-wide data and predictive analytics, the forecast is set to be an essential resource for retailers looking to stay ahead in a competitive holiday landscape.
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