OpenAI's ChatGPT Revolutionizes E-commerce with Instant Checkout Feature

OpenAI deal puts Etsy at the 'leading edge of agentic commerce,' BTIG says

Etsy's landmark partnership with OpenAI is a major catalyst for shares moving forward, according to BTIG. Analyst Marvin Fong wrote in a note to clients that Etsy's partnership with OpenAI's ChatGPT puts the e-commerce site "at the leading edge of agentic commerce." OpenAI on Monday announced a new feature called Instant Checkout that will allow users to make single-item purchases directly from U.S. Etsy sellers through its AI chatbot ChatGPT. The tech giant said more than one million Shopify merchants, including Skims and Glossier, are coming soon. On the back of the partnership announcement, Fong lifted his price target on Etsy by $9 to $81 to suggest shares have about 9% upside from the most recent close of $74.34 per share. The stock closed up nearly 16% on Monday, but shares were recently down about 10% in Tuesday's session, hovering under $67 apiece. "Investors are clearly paying for more than just the immediate impact of this transaction," Fong wrote in the note. "Furthermore, we see ChatGPT's scale, the [total addressable market] unlock, future agentic innovation and the fact we viewed ETSY as undervalued to begin with as justifying today's price action. We believe this deal could be enough to push ETSY to [gross merchandise value] growth next year from current expectations of a small decline and should result in further rerating of the stock." Etsy's partnership with OpenAI notably pays a fee to ChatGPT that is similar to what Etsy pays other channel partners such as affiliates or influencers, and the deal is not expected to affect overall margins, Fong noted. ETSY 1Y mountain Etsy stock performance over the past year. Fong expects ChatGPT queries could lead to between 75 million and 100 million U.S. online orders. His estimate draws on a recent paper from the National Bureau of Economic Research written with the help of OpenAI's Economic Research team that indicated 2.1% of all ChatGPT searches were looking for information on purchasable products, which Fong said he took "as a proxy for shopping intent." The analyst added that it is almost a certainty that ChatGPT's usage will increase from current levels, providing even more runway for the benefits Etsy can see from this deal. Etsy can still work with other AI partners, per the announcement. "We view Etsy as having a dominant position within the handmade/special vertical with low risk of displacement by competitors given their prior unsuccessful efforts. ... We believe the shares are undervalued at current levels," Fong said. Etsy shares are up about 26% year to date.

Etsy shares soar 16% after OpenAI partnership on ChatGPT payment

OpenAI is allowing ChatGPT users in the US to buy from Etsy sellers through its platform. One million Shopify merchants, including Glossier and SKIMS, will also be available through the chatbot in the near future. Etsy shares soared almost 16% on Wall Street on Monday after the firm announced it had partnered with tech giant OpenAI to allow users to buy products through ChatGPT. Thanks to a framework called Instant Checkout, designed with the help of fintech Stripe, users of the chatbot service in the US will be able to make direct single-item purchases from US Etsy sellers. OpenAI added that one million Shopify merchants, including Glossier and SKIMS, will be available through its chatbot in the near future. The company is also considering adding multi-item carts and expanding merchants and regions. Shopify shares were up over 6% at close on Monday in New York. "This marks the next step in agentic commerce, where ChatGPT doesn't just help you find what to buy, it also helps you buy it," said OpenAI in a statement. In a separate announcement, Etsy said that it was "excited to leverage AI to make it easier than ever for shoppers to discover and connect with sellers who offer items they love". Merchants will pay a small fee on completed purchases, but Instant Checkout will be free for users, meaning prices will match those on the original site. OpenAI added that the new service won't affect ChatGPT's product results, meaning that Instant Checkout items won't be automatically preferred when the bot is giving recommendations. "When ranking multiple merchants that sell the same product, ChatGPT considers factors like availability, price, quality, whether a merchant is the primary seller, and whether Instant Checkout is enabled, to optimise the user experience," said the firm. The new service could become a key revenue source for OpenAI, which is currently undergoing a restructuring process, bringing it closer to becoming a for-profit firm. Earlier this month, Microsoft and OpenAI announced that they had signed a non-binding deal to extend their partnership. The agreement offers OpenAI the possibility to shift its focus after it was founded for charitable purposes in 2015.

Shopify & ChatGPT Join Forces for Faster, Smarter AI Shopping Solutions

What if your next online shopping experience didn't require endless scrolling, multiple tabs, or even visiting a website? Imagine asking a chatbot for the perfect pair of running shoes, receiving tailored recommendations, and completing your purchase, all within the same conversation. This isn't a glimpse into a far-off future; it's the reality Shopify is creating with its new integration of ChatGPT-powered agentic commerce. By blending conversational AI with e-commerce, Shopify is not just refining how we shop, it's fundamentally redefining it. In a world where convenience reigns supreme, this bold move positions Shopify as a leader in the next wave of online retail innovation. This deep dive Arie Scherson explores how Shopify's collaboration with OpenAI and its adoption of the Agentic Commerce Protocol are reshaping the digital shopping experience. From personalized product recommendations to seamless, chatbot-driven transactions, this update promises to empower merchants and delight customers in ways never seen before. But what does this mean for the future of e-commerce, and how will it impact the way businesses connect with their audiences? Let's unpack the potential of this fantastic technology and what it signals for the ever-evolving world of online retail. "Shopping is changing fast. People are discovering products in AI conversations, not just through search or ads," says Vanessa Lee, VP of Product at Shopify. "This will let our merchants show up naturally in those moments and give shoppers a way to buy without breaking their flow. It's a really exciting shift for commerce." Agentic commerce represents a new paradigm in online shopping, where customers can search for products, receive personalized recommendations, and complete purchases, all within a single chatbot conversation. This streamlined approach simplifies the customer journey, offering instant checkout for single-item purchases. Shopify has also announced plans to expand this functionality to include multi-item carts, further enhancing the convenience of the shopping process. By reducing friction in the buying experience, agentic commerce has the potential to increase customer satisfaction and drive higher conversion rates. The integration of ChatGPT into Shopify's platform is built on the Agentic Commerce Protocol, developed in collaboration with OpenAI. This protocol serves as the backbone of the new feature, allowing seamless interactions between customers and merchants. Additionally, Shopify has partnered with Stripe, a leading payment platform, to ensure secure and efficient transactions. Stripe's robust infrastructure provides merchants and customers with a reliable system for digital payments, reinforcing trust in the platform. These partnerships highlight Shopify's commitment to using innovative technology to enhance the e-commerce experience for both merchants and customers. Stay informed about the latest in ChatGPT Integration by exploring our other resources and articles. The global e-commerce market is projected to reach $6.4 trillion by the end of 2025, and AI-driven innovations are expected to play a pivotal role in this growth. By integrating ChatGPT, Shopify enables merchants to engage customers more effectively through tailored recommendations and conversational interactions. This personalized approach not only enhances the shopping experience but also has the potential to boost conversion rates and improve customer retention. As AI continues to evolve, its applications in e-commerce are likely to expand, offering new opportunities for businesses to connect with their audiences. For merchants, this update provides a range of benefits that set Shopify apart from competitors. Unlike platforms such as Amazon, which often control customer interactions, Shopify's ChatGPT integration gives merchants greater autonomy. This includes the ability to manage retention strategies, such as email campaigns and personalized follow-ups, allowing businesses to build stronger, long-term relationships with their customers. Additionally, the conversational nature of this feature enables merchants to provide a more engaging and interactive shopping experience, fostering customer loyalty. The introduction of the Agentic Commerce Protocol has implications that extend beyond Shopify. This technology could be adapted for use in other software and digital products, paving the way for innovation across various industries. For example, businesses in sectors such as travel, hospitality, and entertainment could use conversational commerce to enhance customer interactions and streamline transactions. As AI technology continues to advance, the potential applications of agentic commerce are vast, offering new possibilities for businesses to engage with their audiences in meaningful ways. Shopify has consistently demonstrated its ability to adapt to changing consumer behaviors and technological advancements. From allowing merchants to sell in virtual environments like Roblox to integrating ChatGPT, Shopify remains at the forefront of e-commerce innovation. This latest update reflects the company's dedication to empowering merchants with tools that allow them to meet customers wherever they choose to shop. By embracing emerging technologies, Shopify continues to set the standard for what is possible in the digital retail space. The integration of ChatGPT into Shopify's platform also creates new opportunities for entrepreneurs. By providing advanced tools and resources, Shopify makes it easier for aspiring business owners to enter the e-commerce market. Whether you're launching a small online store or scaling an existing business, this update offers innovative ways to connect with customers and grow your brand. The conversational commerce model allows entrepreneurs to engage with their audience in a more personalized and interactive manner, helping to differentiate their offerings in a competitive marketplace. Shopify's partnership with OpenAI and the integration of ChatGPT mark a significant milestone in the evolution of e-commerce. By harnessing the power of AI, Shopify is creating a more intuitive and efficient shopping experience that benefits both merchants and customers. This conversational approach to commerce has the potential to become a standard in the retail industry, reshaping how businesses interact with their customers. As the digital marketplace continues to grow, innovations like this will play a crucial role in shaping the future of online shopping, empowering merchants to thrive in an increasingly competitive landscape.

Shopify, Etsy Shares Are Surging Monday: What's Going On? - Etsy (NASDAQ:ETSY)

Shopify Inc. (NASDAQ: SHOP) and Etsy, Inc. (NASDAQ: ETSY) shares are trading higher on Monday after OpenAI announced its "Buy it in ChatGPT" feature with instant checkout. What To Know: OpenAI announced it's rolling out Instant Checkout, powered by the Agentic Commerce Protocol, enabling U.S. ChatGPT users to purchase directly from U.S. Etsy sellers without leaving the chat. Over a million Shopify merchants -- including Glossier, SKIMS, Spanx and Vuori -- are slated to be added "soon." When a user asks for a product like "best running shoes under $100," ChatGPT will display relevant items and, if Instant Checkout is supported, let users confirm payment and shipping and complete the purchase in the chat. The merchant handles fulfillment while ChatGPT acts as an AI agent, securely passing info to the merchant's backend. "We've been working with @OpenAI for quite some time so people can search and buy products in chat, and it's something we've had a hard time keeping quiet," Shopify CEO Tobi Lutke said in a post on X. OpenAI announced that it will open-source the technology that powers Instant Checkout. Shares of PayPal Holdings, Inc. (NASDAQ: PYPL) moved off their highs for the day on the news as investors weighed potential competitive risks from OpenAI's entry into payments and checkout. See Also: Bitcoin Reclaims $114,000, But Why Does The Fear & Greed Index Show 'Fear'? Price Action: At the time of writing, Etsy shares were up 14.38% at $73.49 and Shopify shares were up 5.64% at $148.36, according to data from Benzinga Pro. Image via Shutterstock ETSYEtsy Inc$73.1414.0%OverviewPYPLPayPal Holdings Inc$69.683.54%SHOPShopify Inc$148.485.87%Market News and Data brought to you by Benzinga APIs

Etsy and Shopify Cozy Up With OpenAI's ChatGPT: What You Need to Know | The Motley Fool

A new ChatGPT checkout could push more shopping into AI conversations -- and both commerce platforms want in. E-commerce just took a step further into artificial intelligence (AI). On Monday, OpenAI announced that U.S. users can now buy from U.S. Etsy (ETSY -10.70%) sellers directly inside ChatGPT, with support for more than one million Shopify (SHOP -0.22%) merchants "coming soon." The experience -- called Instant Checkout -- keeps shoppers in the conversation from discovery to payment and was co-developed with Stripe. For investors, any AI headline these days is flashy -- and likely to cause moves in share prices. Indeed, Etsy stock soared almost 16% on Monday in the wake of this news. And Shopify shares jumped more than 6%. The real question, however, is whether this changes traffic patterns and conversion enough to matter for Etsy and Shopify over the long haul. Etsy operates a two-sided marketplace known for handmade, vintage, and unique goods. Shopify provides commerce infrastructure for businesses of all sizes across online and offline channels. Both already benefit when product discovery happens off their platforms (social, search, influencers). Generative AI chats becoming a transactional channel is the next logical extension. OpenAI says product search results with Instant Checkout in ChatGPT are organic, ranked purely on relevance (not any sort of sponsored placement), and can now be purchased simply by users tapping "Buy" within their chat threads. Orders are still fulfilled by the merchant; ChatGPT simply passes information securely via the new Agentic Commerce Protocol. That matters because it keeps merchant branding and relationships intact while potentially capturing impulse purchases that start as conversations about gift ideas or prompts like, "Show me ideas under $100." Importantly, ChatGPT is no small partner. OpenAI says it has over 700 million people who already "turn to ChatGPT each week for help with everyday tasks, including finding products they love." Instant Checkout is live first for U.S. Etsy sellers. This builds on the company's recent efforts to integrate "emergent AI technologies," as CEO Josh Silverman said in the company's second-quarter update. This, combined with efforts to make its shopping experience more browsable and personalized, is "creating a significant runway for growth, as well as an opportunity to generate sustainable value for our stakeholders by capitalizing on what makes Etsy special," he added. The catalyst comes at a good time for Etsy, because it has been struggling. Etsy's gross merchandise sales (GMS) in Q2 fell 4.8% year over year to $2.8 billion. Notably, however, revenue for the quarter did grow 3.8% to $672.7 million as the company leaned on ads and payments, lifting its take rate to 24%. If ChatGPT-driven discovery can reactivate lapsed buyers or lift conversion on gift-centric searches, investors should see it first in GMS stabilization and active-buyer trends. While Etsy goes first, Shopify's upcoming inclusion may be an even bigger unlock. Shopify's merchant scale (its second-quarter GMS was $87.8 billion, dwarfing Etsy's) gives this feature real distribution. But investors will have to watch to see whether Instant Checkout is incremental to existing channels and doesn't simply shift orders from merchants' own sites. Odds are, however, that a meaningful portion of these orders will be incremental. Shopify's VP of Product Vanessa Lee said in a press release about the upcoming integration that it will let merchants "show up naturally" inside AI conversations with no links or redirects, giving shoppers "a way to buy without breaking their flow." Unlike Etsy, the integration comes at a time of strength for Shopify. Its second-quarter revenue rose 31% year over year to $2.68 billion, and GMV rose by the same amount. Management framed results as the payoff from "bold bets we made years ago." As exciting as the announcement is for Etsy and Shopify, investors should keep their expectations in check. First, Instant Checkout only supports single-item purchases today, with multi-item carts to follow. Second, OpenAI says rankings are unsponsored; that's good for trust and the user experience but means sales volumes will depend on user behavior, not paid placement. Finally, remember that OpenAI states merchants will pay a "small fee" on completed transactions, so it will be interesting to see how the economics unfold over time. After a sharp pop on the news for both stocks, investors shouldn't be treating this as an automatic buy signal. But if evidence builds over time that chat-commerce funnels new, incremental demand at healthy conversions, and that merchant adoption stays high despite fees, then this could be a big deal. Investors should keep an eye on the integration over time to see how it impacts both e-commerce businesses.

ChatGPT 'Buy It' Feature: Check How This Works With Instant Checkout

Open-source ACP and expanding merchant support make ChatGPT a scalable, efficient, and trusted AI shopping assistant. More than 700 million people use ChatGPT each week to assist with everyday tasks. To simplify online shopping, an Instant Checkout feature has been introduced, powered by the Agentic Commerce Protocol in collaboration with Stripe. In the United States, users of ChatGPT's Free, Plus, and Pro editions can now make purchases directly from Etsy sellers within the chat interface. Integration with a million Shopify retailers, including notable brands such as Glossier and Spanx, is planned for the near future. Initially, the feature supports single-item purchases, but upcoming updates will enable multi-item carts and expand availability to more merchants and regions. As the Agentic Commerce Protocol is open source, companies and developers can adopt it to create AI-driven commerce experiences, aiming to deliver a seamless shopping journey. This protocol enhances sellers' reach while improving convenience for buyers. Starting today, merchants can apply to participate and complete the necessary registration process.