A significant number of independent businesses across the United Kingdom are reporting a direct and negative impact on their online sales, attributing the decline to the rapid integration of artificial intelligence by major online platforms and retailers.
The Survey Reveals a Growing Concern
Research conducted by the campaign group Keep Commerce Human has brought this issue into sharp focus. Their survey, which polled over 500 small and medium-sized enterprise (SME) owners in December 2024, found that a substantial portion are feeling the pressure. Nearly 40% of respondents stated that new AI-driven shopping tools, such as chatbots and automated product recommendation engines, have already reduced their sales. Perhaps more worryingly, over half (55%) expressed fear that these technologies pose a major threat to their future viability.
The core of the problem lies in how these AI systems operate. They are often designed to prioritise products based on vast datasets, marketing budgets, and fulfilment speed – areas where giant corporations hold an overwhelming advantage. This creates a cycle where AI recommendations funnel customers towards the largest sellers, making it increasingly difficult for smaller, unique brands to gain visibility.
How AI is Reshaping the Digital Marketplace
The rise of generative AI shopping assistants is a key driver of this shift. When a customer asks a platform's AI for product advice, it typically generates a concise, curated list. This list rarely includes smaller independents, effectively cutting them out of the initial consideration phase. As highlighted by the founder of Keep Commerce Human, this moves the market towards a "winner-takes-most" environment, stifling diversity and consumer choice.
Business owners cite concrete examples. Some report their products being buried in search results, replaced by sponsored items or algorithmically favoured alternatives from major brands. Others note that the personal touch and unique storytelling that define their brands are rendered invisible to impersonal AI shoppers. The playing field, they argue, is becoming profoundly uneven.
Fighting Back: The Human Touch as a Defence
In response, a growing movement of independent businesses is doubling down on what AI cannot easily replicate: genuine human connection and community. Strategies include cultivating stronger direct relationships with customers through newsletters and social media, emphasising the story and ethics behind their products, and encouraging shoppers to bypass generic AI search tools altogether.
Campaigners are also calling for regulatory scrutiny. They urge policymakers to examine whether the dominant use of AI by tech giants is anti-competitive, potentially violating principles of fair trading. The question being posed is whether existing laws are sufficient to ensure a diverse and healthy digital economy where small businesses can still thrive.
The situation presents a critical juncture for the UK's small business sector. While AI offers efficiency, its current implementation on major platforms risks marginalising the independent retailers that contribute to local character and economic resilience. The coming year will likely see increased debate around ethical AI use in e-commerce and the measures needed to protect market diversity.
