Why Smart Search Matters: The Key to Higher E-Commerce Conversions

Online search remains a cornerstone of the digital shopping experience, yet many e-commerce sites still miss the mark — frustrating customers and driving them toward brick-and-mortar competitors.

Coveo aims to change that. Its enterprise AI platform combines powerful search capabilities with generative AI to enhance every stage of the customer journey, narrowing the gap between online and in-store experiences.

Last month, Coveo and Arlington Research surveyed 4,000 U.S. and U.K. consumers to study shifting shopper expectations, pain points, and behaviors. The findings suggest that generative AI is quickly becoming a must-have, with 62% of respondents saying they’re more likely to buy when guided by AI-powered recommendations. Among millennials, that number jumps to 68%.

“Consumers increasingly expect gen AI to enrich their shopping experiences, making them more relevant, convenient, and informative,” Coveo GM of Commerce Peter Curran told the E-Commerce Times.

“Gen AI doesn’t replace search. It enhances it by seamlessly integrating into key touchpoints like the search bar, product pages, and shopping carts. It reshapes how consumers discover and select products, strengthening the connection between retailers and their customers while driving higher conversions and revenues.”

AI-Enhanced Search Improves Shopper Relevance

Coveo’s infusion of generative AI goes beyond product recommendations to transform the search box into an “intent” box. According to Curran, the search box is ubiquitous on retailer sites and is the most direct way shoppers express their needs.

“That search box should do more than return results. It should understand the intent and respond with the right products, comparisons, or expert advice,” he said.

To do this, Coveo utilizes Retrieval-Augmented Generation (RAG), an AI technique that enhances large language models (LLMs) to connect external data sources. This results in more accurate, up-to-date, and contextually relevant responses. It also reduces hallucinations and improves the user experience.

“Our gen AI ensures accurate, brand-grounded answers that adapt to each shopper in real time, delivering brilliant commerce experiences,” Curran said.

Bad search experiences drive shoppers away. The report found that 72% of consumers abandon sites due to poor search experiences. Curran sees the most common search-related frustrations, including irrelevant results, too many choices, and poor filtering. Those weaknesses make it difficult for shoppers to find what they need.

A classic example is that simple searches for “short sleeve shirt” or “brown leather sofa” often return irrelevant results. Curran added that most sites display generic filters like brand and price that fail to refine selections effectively. Coveo’s intelligent search solves this by combining lexical precision with layered AI models that handle semantic understanding, popularity ranking, and intent detection.

“The result is highly relevant and tailored to each shopper’s intent, reducing decision fatigue and surfacing the right products faster. Coveo also enhances browsing with smart filters that dynamically adjust based on the search results, removing much of the friction from the product discovery process,” he explained.

Search Insights Reveal Gaps in Shopper Experience

Digital discovery plays a critical role in the decision-making process. Seventy-seven percent of respondents research products online before buying, even for in-store items. Since digital discovery creates intent, a strong online presence drives digital sales and powers offline revenue.

When consumers abandon an e-commerce site, 53% of the respondents said they turn to Google, and 36% head straight to a competitor. This tendency is especially pronounced among Gen Z, millennials, and higher-income shoppers who are quick to go elsewhere if their expectations are unmet.

Social media often inspires purchase ideas, but most transactions are completed elsewhere. According to the Coveo study, 73% find products on social media, but only 37% finish purchases there.

Younger generations, such as Gen Z (58%) and millennials (54%), tend to be more comfortable purchasing directly on social platforms. Older shoppers gravitate toward trusted environments like e-commerce sites for confidence in secure checkouts, transparent pricing, and reliable product information.

“Retailers can maximize the impact of social media by creating a seamless path from discovery to purchase,” suggested Curran. “Shoppable links guide users from social platforms to the e-commerce storefront, where intuitive navigation makes finding products easy.”

Retailers Need Consistency Across Channels

According to Curran, Coveo facilitates this omnichannel approach. Many retailers still miss the opportunity to bridge the gap between online research and in-store purchases.

If they check a product online, shoppers do not want to walk into a store only to find a different price, no stock, or an unhelpful sales associate. The key is consistency across all touchpoints.

“By unifying data from digital and physical channels, Coveo’s AI-driven search, personalization, and real-time inventory visibility ensure that what shoppers see online match what they experience in-store,” he said.

The consumer process involves searching for a product, checking availability, finding a bin location, and getting recommendations. These shopping practices must deliver a consistent, personalized experience.

Solving Retail’s Generative AI Integration Gaps

Curran observed that retailers hesitant to adopt generative AI often struggle with data privacy concerns, technical skill gaps, integration challenges, and proving ROI. One of their biggest challenges is moving beyond siloed, frustrating chatbot experiences that often feel like a distraction rather than a solution.

According to Curran, too many AI tools operate in isolation. These disjointed experiences frustrate customers rather than support them. The real opportunity lies in integrating generative AI across search, recommendations, and in-store assistance, creating a seamless, intelligent shopping experience that understands shopper intent and delivers value.

“Retailers that favor conversational search that enhances — not interrupts — the experience will build stronger loyalty and drive higher conversions,” he said.

Packaged SaaS platforms like Coveo offer a practical, lower-risk path forward. Custom-built systems require heavy resources and pose risks like data leaks or regulatory missteps. Coveo’s secure, enterprise-grade platform has built-in AI governance, compliance safeguards, and seamless integration.

Curran noted that Coveo’s solution uses AI to help retailers turn social media trends into real-time shopping experiences that bridge the gap between trending content and on-site discovery. It analyzes social signals such as popular products, emerging trends, and user-generated content to dynamically adjust search results, recommendations, and rankings to reflect what resonates with shoppers.