Retail Giants Explore AI-Powered Storefront Strategies

Major retailers are increasingly embracing agentic AI-driven commerce, even if it means sacrificing some direct customer interaction and data oversight.

According to Retail Dive, early 2026 has seen Etsy, Target, and Walmart expand their product offerings onto third-party AI platforms. This move includes new partnerships with Google’s Gemini and Microsoft’s Copilot, building on last year’s integrations with OpenAI’s ChatGPT. These collaborations allow shoppers to make purchases directly within an AI’s conversational interface.

Amazon and Walmart are also investing in their own consumer-facing AI assistants—Rufus and Sparky, respectively—to transform how customers engage with their brands.

Agentic AI is starting to reshape direct-to-consumer interactions, and many in the industry view this shift as a pivotal moment for online retail. “This could disrupt retail as profoundly as the internet did,” Kartik Hosanagar, a marketing professor at the University of Pennsylvania’s Wharton School, told the publication.

By integrating with AIs such as ChatGPT or Gemini, retailers can reach shoppers wherever they are—and wherever they choose to buy. Adobe’s 2025 Holiday Shopping Report revealed a 758% year-over-year surge in AI-driven traffic to U.S. e-commerce sites in November 2025, with AI-referred retail visits jumping 670% on Cyber Monday.

“We anticipate a significant deepening of consumer engagement,” said Katherine Black, a partner at Kearney focused on food, drug, and mass-market retail, in an email to Retail Dive. “More shoppers will turn to AI for purchasing decisions across a broader range of needs. As retailers enhance their capabilities within these tools, adoption is likely to accelerate.”

However, industry observers note that engaging customers on AI platforms involves trade-offs, particularly around data ownership and the risk of retailers being sidelined. Deloitte’s 2026 Retail Industry Global Outlook, released earlier this month, found that 81% of retail executives believe generative AI will weaken brand loyalty by 2027.

Retailers’ own websites and apps generate valuable behavioral data. But when product discovery, evaluation, and purchase occur on external platforms, those insights are lost. “This fundamentally shifts where the power lies,” Hosanagar explained. “Whoever controls the AI agent increasingly controls the customer relationship.”

Google and Alphabet CEO Sundar Pichai recently introduced new commerce tools for Gemini, detailing how the platform will guide users from discovery to checkout. According to Nikki Baird, vice president of strategy and product at Aptos, this raises challenging questions. “What he’s describing is Google owning data across discovery, decision, and transaction. Even if some information is shared back, the lack of contextual insight leaves retailers with a much weaker understanding of their customers.”

Pichai emphasized that collaboration with retailers remains a priority for Google. “Nearly three decades of working with retailers has taught us that success comes from partnership,” he told an audience at the NRF. “Our goal is to leverage our full technology stack to help define the next era of retail.”

Still, features like instant checkout in agentic systems consolidate the entire shopping journey onto a single platform. “If research, discovery, and purchase all happen on OpenAI instead of Walmart.com, you’re effectively handing over the brand experience. At that point, the retailer risks being reduced to a fulfillment service,” Hosanagar noted.

Amazon has not announced plans to sell directly through ChatGPT, choosing instead to focus on its own AI initiatives. Earlier this month, the company launched a dedicated site for Alexa+, its generative AI assistant that helps users research and plan purchases.

Yet participating in third-party AI commerce may soon become essential. When OpenAI rolled out its Instant Checkout feature on ChatGPT last September, it indicated that enabling the tool could affect how merchants are ranked in search results, alongside factors like price and product quality. Uploading product catalogs to AI chat platforms could mark the beginning of a major transformation in online retail.

Deloitte reports that about half of retail executives expect the current multi-step shopping process to be replaced by a single AI-driven interaction by 2027. For now, the industry is still in the early stages of this transition. “The real inflection point will come when consumers rely on autonomous agents to shop on their behalf,” Hosanagar told Retail Dive.

“Retailers will interact less with humans directly and more with their AI representatives. These agents process information differently, require data in new formats, and respond to persuasion in ways that differ from human behavior.”

Today, shoppers can access ChatGPT on their phones while in a physical store, effectively consulting an always-available expert. “It’s not just having the internet in your pocket,” Baird told Retail Dive. “It’s like having a highly knowledgeable store associate who knows every retailer.”

This could push retailers to equip frontline staff with AI tools that offer real-time insights into customer preferences and purchase history. Alternatively, a retailer’s own AI agent might proactively notify customers when a favorite item is back in stock, helping staff convert interest into sales. “The goal is to empower store associates to perform at their best,” Baird said.

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