AI Chatbots Revolutionize Online Shopping and Search Visibility

AI is changing shopping. Will consumers buy in?

Carolyn Bennett remembers flipping through a yellow telephone book in the 1980s to find carpet stores and workers who refinished wood to help renovate her home. Today, the 67-year-old uses a chatbot to help her shop. Bennett has turned to ChatGPT, which she refers to as "Chat," to find vendors for a kitchen renovation project, compare heat pumps and weigh in on whether she should buy a convection oven. The San Francisco resident could have browsed websites on Google, but she prefers using ChatGPT to save time. "Any product that has multiple features that you want to compare across different products, I think it's super helpful," she said. The rising popularity of artificial intelligence-powered chatbots that can generate text and images is already changing the way people brainstorm ideas, write and research. Tech companies and payment services are also betting that AI will transform how people shop. They're even experimenting with AI agents that can place orders on a customer's behalf with their permission. Google, Amazon and other major tech platforms envision a future where online shopping becomes even more personalized and proactive. But companies will also have to convince consumers to buy into the idea, ensuring them that they're protecting their privacy and providing accurate results. AI chatbots have spewed out incorrect or nonsensical information before. And shoppers might be reluctant to give control to AI agents, especially when it comes to handing them their credit card, some retail experts said. "There's a lot of concern about the reliability of these kinds of tools," said Rachel Wolff, a retail and e-commerce analyst at eMarketer. "So you might not want to trust these agents fully to make decisions on your behalf." For now, AI shopping experiences are growing. Last month, OpenAI said it's experimenting with new shopping features, including a way to see images and prices of several products along with links for people to buy the items. Perplexity, which introduced a new feature last year that allows subscribers to buy items through its chatbot, also teamed up with Visa to help improve its shopping experience in the future. "Visa knows a lot about its customers, and if customers opt in, there can be that anonymized data sharing, so that the recommendations you get in Perplexity are in line with your kind of purchase and transaction history so you can get better quality answers," said Dmitry Shevelenko, Perplexity's chief business officer. (The Los Angeles Times partners with Perplexity to generate summaries of ideas expressed in opinion pieces.) These efforts are still early, but AI companies are also trying to differentiate themselves from rivals such as Amazon and Google that also have chatbots and AI shopping features. Both Perplexity and OpenAI note the products shown within their chatbots are not ads. The chatbots cite websites that review and rate mattresses, coffee makers and other products. Google also is stepping up its AI shopping features as it competes with OpenAI. Last week, the search giant said in the coming months people will be able to use AI mode, a tool where people can ask questions and get answers like they would to a chatbot, to find and compare products. The tool is powered by Google's AI model Gemini. Vidhya Srinivasan, who leads the Ads and Commerce teams at Google, said Monday in a press briefing before Google's annual I/O developers conference that the company displays search results in AI mode based on what's most relevant to questions people are asking. Some of the results also highlighted reviews from websites, but Google has more than 50 billion product listings and that information gets refreshed. "We're doing even more personalization in this mode, where we get to personalize based on brands and styles," Srinivasan said. Google is exploring and experimenting with ads in their AI shopping experiences. Google unveiled other AI shopping tools, including a way to try out clothes virtually and buy products when the price falls. Visa executives say they envision a future in which AI agents will book plane tickets, hotel rooms and other services and products on behalf of the customer with their approval. Rajat Taneja, president of technology for Visa, said that people will be able to set limits around what an AI agent could purchase like when someone hands over their credit card to a friend, family member or assistant, to help them shop. The San Francisco-based payment company, partnering with such AI companies as OpenAI, Perplexity and Anthropic, unveiled a new initiative in late April to enable AI agents to shop and buy products for people but that work is still being tested. Product recommendations, he said, will only get more personalized in the future. "They're going to be different ways in which this will manifest itself, much like the analogy of the internet has evolved in so many different ways," Taneja said. "The most important thing is we are all unique, in our likes, in our dislikes, in what we gravitate towards and what we buy." Consumers are already using generative AI for shopping, research shows. Adobe Analytics, which surveyed 5,000 U.S. consumers, said that 39% reported using generative AI for online shopping and 53% planned to do so this year. Shoppers used generative AI for research, product recommendations, deals and other shopping tasks, according to the survey. Capgemini Research Institute, which surveyed 12,000 adult consumers across 12 countries, found that 24% of consumers used generative AI in shopping experiences. The use was higher among Gen Z and millennials compared to Gen X and boomers. But the survey also found that consumer satisfaction with generative AI also fell. Elliot Padfield, a 21-year-old growth marketing consultant in San Francisco, uses AI for other tasks but he says the shopping experience has fallen short. As a result, he doesn't always trust a chatbot's recommendations. When he tried out shopping on Perplexity for the first time, his order never arrived but he was able to get a refund. And while chatbots can provide a comparison of four types of wireless headphones, for example, he wants more information about how the recommendations fit his needs and priorities. "I still have to guide the AI through supporting me in the way that I need it to," he said. "I actually find it easier at that point to then just go to the retailer." From going to the mall to shopping on websites or through social media, retail experts see generative AI as just another option for consumers. Retailers will have to learn how to navigate chatbots that might not recommend their products. But AI could also level the playing field for small businesses, experts say, if the results aren't based on optimizing for a search engine or buying a ton of ads. Caroline Reppert, director of AI and Technology Policy at the National Retail Federation, said she thinks generative AI is here to stay. Ultimately retailers will meet consumers where they are, she said. "The trend is kind of still emerging and we'll see if it ends up being an enduring one," Reppert said.

AI Chatbots Are Transforming Search Visibility for Brands | PYMNTS.com

The good news is that smaller brands that are expert in what they do can leapfrog over well-trafficked retail sites in search listings. The days of writing SEO-friendly copy that would be enough to bring customers to a brand's website will soon be a thing of the past, as AI chatbots increasingly take over search queries. According to David Hunter, CEO of SEO analytics company Local Falcon, Google's new AI Overviews and AI Mode are transforming the rules of search. "It is fundamentally changing the search engine optimization (SEO) universe," Hunter said in an interview with PYMNTS. "It's not just a little algorithm update. ... The concept of being visible in a search engine is changing dramatically." Previously, businesses could optimize content for Google's bots that crawl websites by building inbound links and populating pages with keywords. But Local Falcon's research showed that Google's artificial intelligence (AI) now analyzes queries differently, using large language models to produce conversational results based on contextual understanding of user intent. The findings show a "significant shift" in how Google determines which businesses show up and in what order, according to the company. Its new study, which analyzed 60,000 search results across over 4,400 businesses in 20 countries, discovered that AI chatbots often bypass traditional SEO metrics such as link volume or page ranking, relying instead on relevance, prominence and authority. That means brands that surface in AI responses are those that offer "citable evidence" of expertise, such as real data, FAQs, testimonials and contextual content that AI can easily access, the study said. Read more: Google Unveils Sweeping AI Upgrades Across Search, Android and Cloud It's no longer about stuffing keywords and hoping for traffic, Hunter said. Brands have to write good content that has conversational relevance and provide proof that "you know what you're talking about." The good news is that it means small businesses with proven expertise can land at the front of an AI chatbot's search results. For example, stores shouldn't just say they are the leading retailer in a niche product but actually prove it by explaining why they're the best. It also helps for the brand to be mentioned in places like social media. For smaller businesses, it's an opportunity to compete with larger players -- if they provide genuine value and clear proof of expertise. "It gives smaller stores a shot at being found if they play it right and they're really good at what they do," Hunter said. Search plays an important part for retailers, with nearly half of consumers globally shopping digitally on their smartphones, according to a PYMNTS Intelligence report, "The 2025 Global Digital Shopping Index: The Rise of the Mobile Window Shopper and What It Means for Payments." Six out of 10 consumers browse for goods on their smartphones several times a week -- with a third browsing merchant websites daily or almost daily -- and half used smartphones to make retail purchases. A key focus of Local Falcon's research is the impact on localized search, which is the bread and butter of local mom-and-pop stores. One surprising finding from Local Falcon's white paper is that explicitly including a location in a search query can sometimes decrease the chances of being included in an AI Overview. "There were fewer uses of AI Overviews if the location was mentioned," Hunter said. "That just goes against everything that I thought to be true." Hunter thinks that Google transitioning from traditional search to AI-powered search is the cause of this surprise finding. Ultimately, location will continue to play an important part in search even for an AI chatbot. Location-based marketing and messaging is a powerful tool that drives higher engagement, foot traffic and revenue, according to Radar CEO Nick Patrick. Location is important not just for retailers but also for financial services -- to do things such as find bank branches, real-time fraud detection and geo-triggered cash back promotions through retail partners, Patrick said in a recent interview with PYMNTS. But instead of location, the AI appears to favor authoritative results from sources including social media, Reddit, and other community forums, which were previously not prioritized by traditional algorithms. Google's AI looks at sources such as TikTok, Reddit, Facebook and Yelp to build a response, said Hunter. So if someone on Reddit says a certain car dealer is the best place to find a Hyundai, it carries real weight. In traditional search, Reddit isn't generally considered a high-authority source because it is a collection of people's opinions. But Reddit is authentic because anonymity lets people be candid, Hunter said. Read also: When Chatbots Replace Search Bars, Who Wins at Checkout? However, the rise of AI Overviews also poses a challenge to businesses that rely on web traffic. With AI summarizing content directly in its response, fewer users are clicking through to the website. "You know what marketers are most worried about?" Hunter said. "I'm not getting clicks anymore because you see the answer right there. I don't need to go to the website now." Instead, he said companies must prioritize visibility, tracking how often and where they are mentioned online, even if it doesn't result in a click. Despite the chaos that AI Mode might bring to marketers, Hunter remains optimistic. "The traffic [Google] is bringing is going to be much higher quality," he said. "The value of the traffic is going to improve." For example, Hunter said that he had been looking for automatic shades for a half-circle-shaped window and struck out using Google Search. But ChatGPT found one manufacturer that made exactly what he needed. Ultimately, Hunter believes marketers must embrace the new rules. "It's going to be very interesting to see what happens over the next couple of months as they introduce this AI Mode and make AI Overviews like an omnipresent thing," he said.