AI Shopping Agents: Revolutionizing Online Retail with Promises and Pitfalls

AI Shopping Bots Race to Fill Online Carts | PYMNTS.com

Silicon Valley is unleashing artificial intelligence agents that can surf online stores, swipe digital credit cards and buy goods without a human lifting a finger -- forcing eCommerce players to grapple with a future where the shoppers aren't people. Tech heavyweights and startups are racing to crack the code of automated buying, a development that could reshape how retail platforms handle everything from price competition to checkout flows. For example, Perplexity recently launched an AI agent shopping tool last month that lets U.S. subscribers buy through its platform. It offers one-click checkout for select merchants and visual product search capabilities. The company also opened a merchant program providing retailers with product indexing and checkout integration. "For commodity products, AI shopping agents will intensify price competition, potentially driving a 'race to the bottom,'" Nigel Daley, chief operating officer and co-founder of AI search company Vantage Discovery, told PYMNTS. "With the ability to identify the lowest price in seconds, these agents will make opaque pricing strategies obsolete. To stay competitive, retailers must adopt transparent pricing, implement dynamic pricing to adjust based on market conditions, or introduce value-driven offerings, such as personalized discounts/bundles, to stand out without solely competing on price." Interest is growing in AI shopping agents. Amazon rolled out its AI-powered shopping assistant, Rufus, to all U.S. customers, making personalized shopping easier. Google unveiled Gemini 2.0, an advanced AI model designed to act like a virtual personal assistant capable of handling tasks and interacting naturally with users. Meanwhile, HotelPlanner introduced AI travel agents capable of handling end-to-end hotel bookings in multiple languages. The AI system processes approximately 10,000 customer calls per day. AI shopping agents can be everything from simple chatbots that give personalized suggestions based on browsing data to all-out platforms, where these tools aggregate data from across the web to help users find the best prices on the products they want, Buysmart.AI founder Lifei Chen told PYMNTS. "Often, they'll have extra value-added features, like pricing history and current prices across eCommerce sites with discounts factored into the price," he said. "Rather than having to price compare, AI can do all the leg work for you." Early versions of AI agents are already changing shopping, offering tailored recommendations and streamlining tasks. Amazon's AI assistant, Rufus, provides personalized product suggestions and answers customer questions. Microsoft's Copilot Vision integrates with the Edge browser, suggesting products and reading handwritten notes like recipes. Encore, an AI search tool, helps users find vintage and secondhand items across resale websites. "AI shopping agents have the potential to find products or deals that you might not otherwise have found on your own, across more retailers/brands than a person would normally be able to find on their own," ReverseLogix founder and CEO Gaurav Saran told PYMNTS. "In theory, these tools could save consumers hours while also helping you easily locate products or brands you didn't even know existed. This could level the playing field in some product categories or, at the very least, allow smaller merchants to be found in the same search results as Amazon." While AI promises to handle the heavy lifting of comparison shopping, there's one weight these digital assistants aren't ready to shoulder: your wallet. Security remains the elephant in the virtual shopping aisle, according to Saran, who pointed to payment automation as the critical challenge ahead. "If you only innovate the product search but do not optimize the purchase process, you are leaving money on the table or money that can be spent elsewhere with another merchant we can fulfill on the entire journey," he said. Creating complex dynamic pricing algorithms will be essential to make AI shopping assistants as quick and reliable as real people, Michelle Nguyen, product owner and marketing manager at UpPromote, an affiliate marketing company, told PYMNTS. "With these algorithms, the agents could change prices right away based on things like competition in the market, customer demand and the amount of stock on hand," she said. "In this way, the agents would be able to choose purchases that get the best deals, making sure that customers get the best prices."

When AI goes shopping: AI agents promise to lighten your purchasing load if they can earn your trust

Online shopping often involves endless options and fleeting discounts. A single search for running shoes can yield hundreds of results across multiple platforms, each promising the "best deal." The holiday season brings excitement, but it also brings a blend of decision fatigue and logistical nightmares. What if there were a tool capable of hunting for the best prices, navigating endless sales and making sure your purchases arrive on time? The next evolution in artificial intelligence is AI agents that are capable of autonomous reasoning and multistep problem-solving. AI shopping agents not only suggest what you might like, but they can also act on your behalf. Major retailers and AI companies are developing AI shopping assistants, and the AI company Perplexity released Buy with Pro on Nov. 18, 2024. Picture this: You prompt AI to find a winter coat under $200 that's highly rated and will arrive by Sunday. In seconds, it scans websites, compares prices, checks reviews, confirms availability and places the order, all while you go about your day. Unlike traditional recommendation engines, AI agents learn your preferences and handle tasks autonomously. The agents are built with machine learning and natural language processing. They learn from their interactions with the people using them and become smarter and more efficient over time from their collective interactions. Looking ahead, AI agents are likely to not only master personal shopping needs but also negotiate directly with corporate AI systems. They will not only learn your preferences but will likely be able to book tailored experiences, handle payments across platforms and coordinate schedules. As a researcher who studies human-AI collaboration, I see how AI agents could make the future of shopping virtually effortless and more personalized than ever. Perplexity's Buy with Pro is a more powerful AI shopping agent. By providing your shipping and billing information, you can place orders directly on the Perplexity app with free shipping on every order. The shopping assistant is part of the company's Perplexity Pro service, which has free and paid tiers. For those looking to build custom AI shopping agents, AutoGPT and AgentGPT are open-source tools for configuring and deploying AI agents. Consumers today are focused on value, looking for deals and comparing prices across platforms. Having an assistant perform these tasks could be a tremendous time saver. But can AI truly learn your preferences? A recent study using the GPT-4o model achieved 85% accuracy in imitating the thoughts and behaviors of over 1,000 people after they interacted with the AI for just two hours. This breakthrough finding suggests that digital personas can understand and act on people's preferences in ways that will transform the shopping experience. How AI shopping reshapes business AI agents are moving beyond recommendations to autonomously executing complex tasks such as automating refunds, managing inventory and approving pricing decisions. This evolution has already begun to reshape how businesses operate and how consumers interact with them. Retailers using AI agents are seeing measurable benefits. Since October 2024, data from the Salesforce shopping index reveals that digital retailers using generative AI achieved a 7% increase in average order revenue and attributed 17% of global orders to AI-driven personalized recommendations, targeted promotions and improved customer service. Meanwhile, the nature of search and advertising is undergoing a major shift. Amazon is capturing billions of dollars in ad revenue as shoppers bypass Google to search directly on its platform. Simultaneously, AI-powered search tools such as Perplexity and OpenAI's web-enabled chat deliver instant, context-aware responses, challenging traditional search engines and forcing advertisers to rethink their strategies. The outcome of the battle between Big Tech and open-source initiatives to shape the AI ecosystem is also likely to affect how the shopping experience changes. The risks: Privacy, manipulation and dependency While AI agents offer significant benefits, they also raise critical privacy concerns. AI systems require extensive access to personal data, shopping history and financial information. This level of access increases the risk of misuse and unauthorized sharing. Manipulation is another issue. AI can be highly persuasive and may be optimized to serve corporate interests over consumer welfare. Such technology can prioritize upselling or nudging shoppers toward higher-margin products under the guise of personalization. There's also the risk of dependency. Automating many aspects of shopping could diminish the satisfaction of making choices. Research in human-AI interaction indicates that while AI tools can reduce cognitive load, increased reliance on AI could impair people's ability to critically evaluate their options. What's next? AI-based shopping is still in its infancy, so how much trust should you place in it? In our book "Converging Minds," AI researcher Aleksandra Przegalinska and I argue for a balanced and critical approach to AI adoption, recognizing both its potential and its pitfalls. As cognitive scientist Gary Marcus points out, AI's moral limitations stem from technical constraints: Despite efforts to prevent errors, these systems remain imperfect. This cautious perspective is reflected in the responses from my MBA class. When I asked students whether they were ready to outsource their holiday shopping to AI, the answer was an overwhelming no. Ethan Mollick, a professor at the Wharton School at the University of Pennsylvania, has argued that the adoption of AI in everyday life will be gradual, as societal change typically lags behind technological advancement. Before people are willing to hand over their credit cards and let AI take the reins, businesses will have to ensure that AI systems align with human values and priorities. The promise of AI is vast, but to fulfill that promise I believe that AI will need to be an extension of human intention -- not a replacement for it.

When AI goes shopping: AI agents promise to lighten your purchasing load - if they can earn your trust

Quinnipiac University provides funding as a member of The Conversation US. Online shopping often involves endless options and fleeting discounts. A single search for running shoes can yield hundreds of results across multiple platforms, each promising the "best deal." The holiday season brings excitement, but it also brings a blend of decision fatigue and logistical nightmares. What if there were a tool capable of hunting for the best prices, navigating endless sales and making sure your purchases arrive on time? The next evolution in artificial intelligence is AI agents that are capable of autonomous reasoning and multistep problem-solving. AI shopping agents not only suggest what you might like, but they can also act on your behalf. Major retailers and AI companies are developing AI shopping assistants, and the AI company Perplexity released Buy with Pro on Nov. 18, 2024. Picture this: You prompt AI to find a winter coat under $200 that's highly rated and will arrive by Sunday. In seconds, it scans websites, compares prices, checks reviews, confirms availability and places the order, all while you go about your day. Unlike traditional recommendation engines, AI agents learn your preferences and handle tasks autonomously. The agents are built with machine learning and natural language processing. They learn from their interactions with the people using them and become smarter and more efficient over time from their collective interactions. Looking ahead, AI agents are likely to not only master personal shopping needs but also negotiate directly with corporate AI systems. They will not only learn your preferences but will likely be able to book tailored experiences, handle payments across platforms and coordinate schedules. As a researcher who studies human-AI collaboration, I see how AI agents could make the future of shopping virtually effortless and more personalized than ever. How AI agents help shoppers Marketplaces such as Amazon and Walmart have been using AI to automate shopping. Google Lens offers a visual search tool for finding products. Perplexity's Buy with Pro is a more powerful AI shopping agent. By providing your shipping and billing information, you can place orders directly on the Perplexity app with free shipping on every order. The shopping assistant is part of the company's Perplexity Pro service, which has free and paid tiers. For those looking to build custom AI shopping agents, AutoGPT and AgentGPT are open-source tools for configuring and deploying AI agents. Consumers today are focused on value, looking for deals and comparing prices across platforms. Having an assistant perform these tasks could be a tremendous time saver. But can AI truly learn your preferences? A recent study using the GPT-4o model achieved 85% accuracy in imitating the thoughts and behaviors of over 1,000 people after they interacted with the AI for just two hours. This breakthrough finding suggests that digital personas can understand and act on people's preferences in ways that will transform the shopping experience. How AI shopping reshapes business AI agents are moving beyond recommendations to autonomously executing complex tasks such as automating refunds, managing inventory and approving pricing decisions. This evolution has already begun to reshape how businesses operate and how consumers interact with them. Retailers using AI agents are seeing measurable benefits. Since October 2024, data from the Salesforce shopping index reveals that digital retailers using generative AI achieved a 7% increase in average order revenue and attributed 17% of global orders to AI-driven personalized recommendations, targeted promotions and improved customer service. Meanwhile, the nature of search and advertising is undergoing a major shift. Amazon is capturing billions of dollars in ad revenue as shoppers bypass Google to search directly on its platform. Simultaneously, AI-powered search tools such as Perplexity and OpenAI's web-enabled chat deliver instant, context-aware responses, challenging traditional search engines and forcing advertisers to rethink their strategies. The outcome of the battle between Big Tech and open-source initiatives to shape the AI ecosystem is also likely to affect how the shopping experience changes. The risks: Privacy, manipulation and dependency While AI agents offer significant benefits, they also raise critical privacy concerns. AI systems require extensive access to personal data, shopping history and financial information. This level of access increases the risk of misuse and unauthorized sharing. Manipulation is another issue. AI can be highly persuasive and may be optimized to serve corporate interests over consumer welfare. Such technology can prioritize upselling or nudging shoppers toward higher-margin products under the guise of personalization. There's also the risk of dependency. Automating many aspects of shopping could diminish the satisfaction of making choices. Research in human-AI interaction indicates that while AI tools can reduce cognitive load, increased reliance on AI could impair people's ability to critically evaluate their options. What's next? AI-based shopping is still in its infancy, so how much trust should you place in it? In our book "Converging Minds," AI researcher Aleksandra Przegalinska and I argue for a balanced and critical approach to AI adoption, recognizing both its potential and its pitfalls. As cognitive scientist Gary Marcus points out, AI's moral limitations stem from technical constraints: Despite efforts to prevent errors, these systems remain imperfect. This cautious perspective is reflected in the responses from my MBA class. When I asked students whether they were ready to outsource their holiday shopping to AI, the answer was an overwhelming no. Ethan Mollick, a professor at the Wharton School at the University of Pennsylvania, has argued that the adoption of AI in everyday life will be gradual, as societal change typically lags behind technological advancement. Before people are willing to hand over their credit cards and let AI take the reins, businesses will have to ensure that AI systems align with human values and priorities. The promise of AI is vast, but to fulfill that promise I believe that AI will need to be an extension of human intention - not a replacement for it.