Recently, Algolia released the company’s sixth annual ecommerce search report, which surveyed top decision makers and revealed key insights on their plans for search, how strategies are evolving, and more.
The results found that search is the number one digital investment for B2C ecommerce decision makers, agentic AI adoption is rising, and personalization continues to be important for ecommerce brands.
Key Search-Related Findings From the Research
The report, which was conducted by Coleman Parks and commissioned by Algolia, gathered insights from 1100 retail and ecommerce leaders, including 550 IT decision makers and 550 business decision makers, from the USA, UK, France, Australia, and Germany.
It revealed several important insights about search, including:
- Search is the number one digital investment for B2C decision makers over the next year, just ahead of payments and personalization.
- Of the companies that spent more on search, investments grew by 6% compared to last year.
- This growth is expected to continue, as 42% of businesses plan to increase spending. In particular, 45% of U.S. businesses and 50% of U.K. businesses are expecting larger budgets next year.
- Many companies prefer partnering with search experts as opposed to handling it in-house, as 49% of businesses use third-party search solutions, while only 27% decide to build these solutions in-house.
Also, according to the research, the top driver of implementing search is to increase revenue (58%), followed closely by meeting evolving customer demand (45%) and improving customer experience (39%).
Agentic AI and Generative AI Continue to be Popular
The report also highlighted how the popularity of AI in ecommerce continues to rise:
- 61% of B2C organizations are planning to implement agentic AI within the next year, driven by factors like smooth system integration (47%) and ROI (39%).
- 94% of respondents believe that generative AI has a positive impact on loyalty and repeat purchases, and helps power conversational tools.
- Of all the AI-powered features, 91% of leaders say that search by image is the most valuable.
Speaking about the results in the report, the VP of marketing for Algolia, Nate Barad, said that “While some enterprises are slowing AI investment due to unclear ROI, B2C retailers are doing the opposite by using AI and advanced search to drive customer experience, conversions, and growth. Nearly 70% are satisfied with the revenue from their search and discovery investments, yet many admit to under-investing in AI this year and plan to accelerate in 2026. There’s a real sense of AI FOMO out there, and this catch-up wave shows growing confidence in the value AI can deliver.”
This potential rise in agentic AI adoption echoes a larger trend of AI growth in ecommerce, as the AI in ecommerce market is expected to reach nearly $51 billion by 2033, up from $5.79 billion in 2023.
Over half of ecommerce businesses already use AI to improve shopping experiences, and the market for AI-powered ecommerce tools is expected to rise to nearly $17 billion by 2030.
AI-Powered Personalization is a Priority
Finally, the report also provided some key findings about personalization, especially the relationship between AI and personalization:
- Nine in 10 experts feel that generative AI is very or somewhat important when it comes to generating a personalized shopping experience for customers.
- According to experts, the top two AI-powered features that consumers are eager for are hyper-personalization (68%) and predictive shipping suggestions (62%).
- 78% of retailers say that AI-powered personalization is among the most valuable AI search capabilities.
These results are just the latest that highlight the overall value of AI-powered personalization to businesses. For example, a Segment report found that 92% of businesses are already using AI-driven personalization.
Also, according to marketing agencies in the USA and Canada, AI-powered personalization is the most important trend in the industry, and is crucial to the success of ecommerce and retail businesses alike.
Finally, despite personalization already being very prevalent, this is just the beginning, according to projections. The hyper personalization market is expected to climb from just over $25 billion in 2025 up to nearly $50 billion by 2029.
What These Results Mean for Ecommerce Companies
These findings highlight that ecommerce brands need to prioritize not only search in general, but also focus heavily on AI-powered search. It’s no longer something optional, but should be considered a requirement to deliver the best and most personalized experience for your customers, and potentially lead to more conversions.
For example, someone searching on your site for a product or service shows they’re interested, so you should be using every tool at your disposal to help you understand their search intent and to fine-tune the experience so it’s as streamlined and helpful as possible.
