Retailers examine options for on-AI retail

Large retailers are committing more to AI-led commerce, accepting some loss in customer proximity and data control in the process.

As reported Retail divingthe opening weeks of 2026 saw Etsy, Target and Walmart push product ranges to third-party AI platforms, forming new partnerships with Google’s Gemini and Microsoft’s Copilot, following last year’s collaboration with OpenAI’s ChatGPT. This allows consumers to purchase goods within the AI’s conversational interface.

Amazon and Walmart are investing in their own AI assistants, Rufus and Sparky respectively, to change how shoppers interact with their brands.

Agent AI is beginning to redefine direct-to-consumer engagement, and industry figures see this trend as a significant moment in online retail. “I think this has the potential to disrupt retail in the same way the Internet did before,” Kartik Hosanagar, a marketing professor at the Wharton School at the University of Pennsylvania, told the site’s reporters.

Partnering with AI like ChatGPT or Gemini engages consumers wherever they are and might choose to shop. Adobe’s 2025 Holiday Shopping report found that AI-driven traffic to US e-commerce sites grew 758% year-over-year between November 2025 and Cyber ​​Monday saw a 670% increase in AI-referred retail visits.

“What we expect is a deepening of consumer engagement,” Katherine Black, a partner at Kearney, which specializes in food, pharmaceutical and mass-market retail, said in an email. Retail diving. “More shoppers will rely on AI to make purchases, and across a wide range of tasks. As retailers’ capabilities within these tools improve, their adoption should accelerate further.”

Meeting customers on AI platforms comes with trade-offs, according to industry observers, with questions about data ownership and the risk of marginalizing retailers. 81% of retail executives believe AI will erode brand loyalty by 2027, according to Deloitte’s 2026 Global Retail Report, published earlier this month.

Retailer websites or apps provide a stream of behavioral data, and if discovery, evaluation, and purchasing happen externally, no information will reach the retailer. “This fundamentally changes where power lies,” Hosanagar said. “Control of the agent increasingly means control of the relationship with customers.”

Sundar Pichai, CEO of Google and Alphabet, unveiled new commerce tools for Gemini, explaining how it will support customers from discovery to final purchase. This raises difficult questions, says Nikki Baird, vice president of strategy and products at Aptos. “What it describes is that Google owns the data across discovery, decision, and transaction. And even if some information is shared back, the missing context from those stages leaves retailers with much less understanding of their customers.”

Pichai emphasized that retailer collaboration remains key for Google. “From nearly three decades of working with retailers, we know that success only comes when we work together,” he told the NRF audience. “Our goal is to use our full technology stack to help shape the next era of retail.”

However, features of agent systems, such as instant checkout, accommodate the shopping experience into a single platform. “If search, discovery and purchasing are done on OpenAI instead of Walmart.com, you are effectively giving up the brand experience,” Hosanagar said. “At that point, the retailer risks becoming little more than a fulfillment operation.”

Amazon has announced plans to sell directly through ChatGPT and double down on its AI initiatives. Earlier this month, the company launched a website dedicated to Alexa+, the artificial intelligence assistant that helps users research and plan purchases.

However, engaging in AI commerce with a third party may become unavoidable. When OpenAI launched the instant payment feature on ChatGPT last September, it suggested that enabling the function could impact how merchants rank in search results, as well as price and product quality. Uploading product catalogs to AI-powered chat platforms could be the first step in the transformation of online retail.

According to Deloitte, nearly half of retail executives expect the current multi-stage shopping process to shift to a single AI-driven interaction by 2027. Currently, the industry is still early in any transformation. “The real tipping point is when consumers rely on an independent agent to shop for them,” Hosanagar said. Retail diving.

“Retailers will interact less with humans directly and more with their representatives – AI agents. This agent processes information differently, requires data in new formats and responds to persuasion in different ways than a person.”

Today, consumers can access ChatGPT on their phones while in the store, with a consultation with an expert always readily available. “It’s not just about having the Internet in your pocket,” Baird said. Retail diving. “It’s like having a very experienced store partner who knows every retailer.”

This may prompt retailers to equip front-line staff with their own AI tools, providing instant insight into customer preferences or shopping history. Alternatively, a retailer’s AI agent can proactively notify customers when a favorite item is back in stock, helping partners turn interest into sales. “The goal is to empower store associates to be their best,” Baird said.

(Image source: “Shopping Shock!” by Elsie esq. Licensed under CC BY 2.0.)

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