Big retailers are committing more heavily to agentic AI-led commerce, accepting some loss of customer proximity and data control in the process as the technology promises to fundamentally transform how consumers discover and purchase products.
Major Retailers Embrace Third-Party AI Platforms
As reported by Retail Dive, the opening weeks of 2026 have seen Etsy, Target and Walmart push product ranges onto third-party AI platforms, forming new partnerships with Google's Gemini and Microsoft's Copilot, following last year's collaborations with OpenAI's ChatGPT. These integrations allow consumers to purchase goods directly inside the AI's conversation interface, eliminating the need to visit traditional e-commerce websites.
Meanwhile, Amazon and Walmart have been investing substantially in their own consumer-facing AI assistants, Rufus and Sparky respectively, seeking to change how shoppers interact with their brands while maintaining control over the customer relationship and valuable behavioural data.
Agentic AI is beginning to redraw direct-to-consumer engagement, and industry figures regard this trend as a pivotal moment in online retail's evolution. The technology represents a fundamental shift from passive search-based discovery to proactive, conversational commerce that can understand context, preferences, and intent.
"I think this has the potential to disrupt retail in the same way the internet once did." — Kartik Hosanagar, Marketing Professor, Wharton School of the University of Pennsylvania
Explosive Growth in AI-Driven Commerce Traffic
Partnering with AI platforms like ChatGPT or Gemini engages consumers wherever they happen to be and may choose to shop, representing a significant departure from the traditional model of driving traffic to branded websites and applications.
758% Year-over-year growth in AI-driven traffic to US e-commerce sites during November 2025, according to Adobe's Holiday Shopping report
The data reveals the accelerating adoption of AI-assisted shopping. Cyber Monday alone saw a 670% increase in AI-referred retail visits, demonstrating that consumers are rapidly embracing conversational interfaces for product discovery and purchasing decisions.
"What we expect is a deepening of consumer engagement. More shoppers will rely on AI for purchasing, and across a wider range of missions. As retailers' capabilities within these tools improve, adoption should accelerate further." — Katherine Black, Partner at Kearney, specialising in food, drug and mass-market retail
The Data Ownership Dilemma
Meeting customers on AI platforms comes with significant trade-offs, according to industry observers. Questions around data ownership and the risk that retailers become sidelined from the customer relationship are prompting serious strategic discussions across the industry.
81% Of retail executives believe generative AI will erode brand loyalty by 2027, according to Deloitte's 2026 Retail Industry Global Outlook
Retailers' websites and apps have traditionally provided a continuous stream of behavioural data that informs everything from inventory management to personalised marketing. If discovery, evaluation, and purchase all happen on external AI platforms, this valuable insight never reaches the retailer, fundamentally altering the competitive landscape.
"This fundamentally changes where power sits. Control over the agent increasingly means control over the customer relationship." — Kartik Hosanagar
Google's Commerce Ambitions Raise Industry Concerns
Google and Alphabet CEO Sundar Pichai has unveiled new commerce tools for Gemini, outlining how the AI assistant will support customers from initial discovery through to final purchase. This end-to-end approach has raised difficult questions among retail strategists about the future distribution of power in digital commerce.
"What he's describing is Google owning the data across discovery, decision and transaction. Even if some information is shared back, missing context from those stages leaves retailers with a much poorer understanding of their customers." — Nikki Baird, Vice President of Strategy and Product at Aptos
Pichai has sought to reassure retailers that collaboration remains central to Google's approach. Speaking to an NRF audience, he emphasised the company's long history of partnership with the retail sector while positioning AI as the next frontier of their collaboration.
"From nearly three decades of working with retailers, we know success only comes when we work together. Our aim is to use our full technology stack to help shape the next era of retail." — Sundar Pichai, CEO of Google and Alphabet
Yet agentic systems' features like instant checkout absorb the entire shopping experience into a single platform, potentially marginalising retailers' role in the customer journey.
"If research, discovery and purchase all happen on OpenAI rather than Walmart.com, you're effectively giving away the brand experience. At that point, the retailer risks becoming little more than a fulfilment operation." — Kartik Hosanagar
Amazon Charts Independent Course with Proprietary AI
Amazon has notably not announced plans to sell directly through ChatGPT, instead doubling down on its own AI initiatives to maintain control over the customer experience. Earlier this month, the company launched a dedicated site for Alexa+, its generative AI assistant designed to help users research and plan purchases within Amazon's ecosystem.
This strategic divergence highlights the different approaches major retailers are taking toward AI commerce. While some see third-party AI platforms as essential channels for reaching customers, others view them as potential threats to brand relationships and are investing heavily in proprietary solutions.
The Pressure to Participate
Despite concerns about data control and brand dilution, participation in third-party AI commerce may become unavoidable for most retailers. When OpenAI launched its Instant Checkout feature on ChatGPT last September, it suggested that enabling the function could influence how merchants are ranked in search results, alongside traditional factors like price and product quality.
This creates a powerful incentive structure that may compel retailers to participate regardless of their reservations. Uploading product catalogues to AI chat platforms may be merely the first step in a comprehensive transformation of online retail that fundamentally reshapes the industry's competitive dynamics.
The Future: Single-Interaction Shopping
According to Deloitte's research, roughly half of retail executives expect the current multi-stage shopping process to reduce to a single AI-driven interaction by 2027. This represents a dramatic compression of the traditional customer journey, with profound implications for marketing, merchandising, and customer relationship management.
For now, the industry remains at an early stage of any transition. The current implementations, while impressive, represent only the beginning of what AI-powered commerce might eventually become.
"The real inflection point is when consumers rely on an autonomous agent to shop on their behalf. Retailers will engage less with humans directly and more with their representatives — AI agents. That agent processes information differently, requires data in new formats and responds to persuasion in ways unlike a person." — Kartik Hosanagar
AI as the Ultimate Shopping Companion
Today, consumers can access ChatGPT on their phones while physically present in stores, effectively consulting an always-available expert that can compare prices, read reviews, and provide product recommendations in real-time. This capability is already changing in-store dynamics and consumer behaviour.
"It's not just the internet in your pocket. It's like having a highly knowledgeable store associate who knows every retailer." — Nikki Baird
This development may prompt retailers to equip frontline staff with their own AI tools, offering instant insight into customer preferences or shopping history. The goal would be to match or exceed the capabilities that customers bring with them through their personal AI assistants.
Alternatively, a retailer's AI agent could proactively notify customers when a favoured item is back in stock or when relevant promotions become available, helping associates convert interest into sales through timely, personalised outreach.
"The goal is to enable store associates to perform at their best." — Nikki Baird
Broader Implications for the AI Industry
The retail sector's embrace of agentic AI reflects broader trends reshaping industries worldwide. As AI systems become more capable of autonomous action, the question of who controls these agents—and the customer relationships they mediate—becomes increasingly critical across sectors from healthcare to financial services.
The retail industry's experience may serve as a template for other sectors grappling with similar questions. The tension between reaching customers through powerful third-party AI platforms and maintaining direct relationships and data control is likely to define strategic discussions across the economy in the coming years.
For technology companies like Google, Microsoft, and OpenAI, commerce represents a massive opportunity to monetise their AI investments while demonstrating practical value to consumers. For retailers, the challenge lies in navigating this transition while preserving the brand relationships and customer insights that have traditionally driven competitive advantage.
As agentic AI continues to evolve, the boundaries between platform, marketplace, and retailer may blur further, creating new business models and competitive dynamics that are difficult to predict from today's vantage point. What seems certain is that the retail industry of 2030 will look dramatically different from today, shaped fundamentally by the AI technologies now being deployed.
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