Last week I wrote about how AI shopping agents are set to become the new consumer interface, potentially shifting control of retail media from retailers to AI platforms.
I shared:
- The fundamental power shift from retailers to AI platforms
- The disruption of traditional retail media revenue models
- The transformation of how consumers discover and buy products
Kiri Masters
Today I want to share some real shopping use cases that people have shared after testing out OpenAI's Operator, some POVs from smart people in the space, and finally, what does this mean for retailers? How will they respond to in the short term and long term?
How people are using Operator to shop right now
AI strategist Lauren Morgenstein Schiavone shows a video on LinkedIn of her Operator agent shopping on Kroger’s website. The agent converted recipes directly into shopping carts and compared prices across retailers. In another test, when asked to find the best price for Pampers size 4 diapers, Operator compared Amazon and Target before selecting the better deal. She points out a couple of minor errors, but also that this is a starting point and that this technology will get better and better at an exponential rate.
Agency executive David Jones used Operator across diverse scenarios - ordering from local bakeries, researching World Cup tickets, booking Paris hotels, and ordering DoorDash. He noted the agent's effectiveness but highlighted a current limitation and a big takeaway for a later point: the need for human verification in checkout processes.
"It does sometimes need to bring you in "to confirm you're human. Could you please take over and complete this verification?" - I wonder how long before agents are so prevalent no-one cares."
Short term: retailers will throttle or reject agents
With these very early use cases in mind, lets turn to how agentic shopping might affect retailers in the short term.
In their annual predictions epsiode, the hosts of the venerable "Jason + Scot Show" podcast predicted that 'AI agents become a double edge sword for retailers.'
The premise is that as agents become the primary shopping interface, retailers risk becoming mere fulfillment centers, losing direct consumer engagement. More critically, retail media networks - a crucial profit center - could see ad dollars redirected to AI platforms that now control the discovery process.
As such, one of the predictions offered by Scot Wingo on the podcast epsiode was that 10 of the largest retailers will simply block these agents – a knee jerk response to an existential threat. It's an understandable reaction: retailers face an Innovator's Dilemma. They have been in the business of interacting with and serving customers for decades. Are they now in the business of interacting with AI agents? Retail media recently emerged as a savior for their profit margins, is that about to vanish into thin air?
Long term: retailers optimize the experience for AI agents and find new ways to differentiate
While I think that many retailers will block AI Agents in the short term, over the medium term some forward-thinking retailers will really embrace the Innovator's Dilemma and consider how working with the AI agents might be their most secure path forward.
Retailers will need to consider AI agents as a new constituent, while also finding new ways to be relevant to consumers.
It doesnt necessarily mean a race to the bottom, and it doesn't necessarily mean that the largest retailers are in the best possible position. Here are some ways retailers might pivot and thrive in this new paradigm:
- Site design: As Lauren Morgenstein Schiavone pointed out in her demo, agents can struggle when a retailer site is not optimized for AI. Retailers who build interfaces (perhaps even direct API access) that are AI-friendly may have a competitive advantage
- Loyalty Programs: Points, fuel discounts, and spending tier benefits could influence consumers to direct their AI agents to specific retailers
- Unique Assortment: Exclusive products and brand collaborations could drive AI agents to particular retailers
- Data Partnerships: Retailers could leverage their purchase and loyalty data in negotiations with AI platforms
- Physical Retail: Creating immersive experiences that AI can't replicate, like Whole Foods' food bars and discovery sections
The "It Won't Work In My Category" Fallacy
A great debate kicked off in the comments section of a great LinkedIn post from Kelly Goetsch on this topic. And I saw similar comments on my own post. Some argue certain categories, like fashion, are immune to AI disruption.
Jason Goldberg offered a compelling counterpoint: "Apparel was the first category disrupted by AI. Shein's AI monitors TikTok trends and moves products from concept to sale in two weeks, while traditional brands are still scheduling meetings." Forever 21's owner acknowledged this reality, calling his post-Shein acquisition "the worst mistake of his career."
Another push-back is around the experiential nature of shopping in stores, that people will always want to shop brick-and-mortar in some contexts. And I agree! There will always be a segment of shopping activity which is done for the experience. For a social event with your family or friends, to discover and be inspired by new looks, tastes, and ideas. People will still be going to farmer’s markets on a saturday morning to pick out some fresh produce. People will still hit the mall on the weekend.
AND.... we will also see some aspects of shopping in every category be augmented by AI agents. Another comment from Jason Goldberg:
I’ve been in the room when CEOs said apparel would never be disrupted by digital (and consumer electronics, and kitchen goods, and toys, and even video tapes if you can believe it) because “our category is special, it’s about the experience.” I’ve heard it said and then disproved so many times that my spidey sense goes off whenever I hear the phrase.
Key Questions for Retailers
- How do you optimize products and digital shelf presence for AI selection?
- What strategies will maintain brand loyalty in an agent-driven world?
- Which data sources will influence AI purchasing decisions?
- How can retailers remain relevant while embracing the AI transition?
The message is clear: understanding and adapting to AI isn't optional. Today's Leaders must grasp AI's capabilities and potential to succeed in this evolving retail landscape. Whether through resistance or embrace, AI shopping agents are reshaping retail's future.
Next in this series, the implications of AI shopping agents for brands and advertisers. Be sure to subscribe to this newsletter if you don't want to miss it!
