Will Third-Party Apps Kickstart an AI-Powered Retail Revolution?

The power of AI is spreading rapidly throughout the retail solution provider ecosystem, potentially democratizing a technology that has so far been limited to the most tech-savvy companies and platforms. Klarna is the latest company to launch advanced third-party AI solutions, such as AI-powered shopping assistants, in a trend that could help retailers create more convenient experiences.

Klarna is updating its app with new features like the shopping lens, which allows customers to take pictures of items and use that information to search for and compare similar products. The AI turns the image into a search term, which is used to find the best deals available on the Klarna app.

The in-app camera feature can “visually identify over 10 million items” and match them with more than 50 million online offers. The tool builds on Klarna’s existing discovery feed, which already makes recommendations based on personal interests.

Klarna is also enhancing its discovery feed with shoppable videos, ranging from unboxings to tutorials, that let customers make purchases from within the player. The solution provider is aiming to capitalize on growing view time for its video offerings, which are up 60%, as well as rising click-through rates, up 25%.

Klarna users can access product information as well by scanning an item’s barcode, including customer reviews and whether there are variants available for sale online. These solutions were created in response to a May 2023 poll that found eight out of 10 shoppers look forward to having an AI shopping assistant.

“Just like the internet gave everyone access to information, AI gives everyone access to intelligence, context and personalization,” said Sebastian Siemiatkowski, CEO and co-founder of Klarna, in a press release.

Klarna isn’t the only solution provider rolling out new AI-powered tools this year. In April, Mercari introduced a ChatGPT-powered shopping assistant capable of helping customers narrow down their top choices in crowded marketplaces. Salesforce has also been adding generative AI-powered tools, with an emphasis on improving the customer experience by empowering retail workers on the backend.

Major tech companies like Google were the first to integrate the potential of generative AI into their search functions, but now retailers of all sizes can access similar capabilities through third-party solution providers. This could mark the start of an AI-powered revolution that defines customer expectations in the coming years.