Retailers Tap AI Shopping Traffic but Battle to Control Customer Data and Direct Sales

Retailers tap AI shopping traffic but fight to keep customer data

NEW YORK, Aug 7 (Reuters) - As shoppers increasingly turn to ChatGPT and Google's Gemini for product recommendations, retailers are racing to appear in chatbot results while resisting efforts to cede customer data that underpin online sales. Growing online traffic from AI platforms has pushed retailers including Walmart, Ulta Beauty and Wayfair to update their websites so their products rank highly in chatbot searches. Yet many want purchases to remain on their own websites, where they can collect data on browsing habits, basket sizes and past purchases that help drive future sales and customer loyalty. Shoppers are expected to spend $8 billion this year after AI agents such as Anthropic's Claude and Gemini direct them to retail sites, according to Juniper Research. Adobe Analytics said 41% of U.S. consumers used generative AI for online shopping in June and visitors referred by AI services generated 41% higher revenue ⁠per visit than shoppers arriving through traditional channels. Unlike search engines that rank pages based on keywords and links, chatbots respond to detailed questions, prompting retailers to rethink how they describe products online and how customers find brands. "We always want to be wherever our guest is," Ulta Beauty's (ULTA.O), opens new tab head of digital and e-commerce, Josh Friedman, said. "Whether it's Google search, affiliate marketing (or) Facebook, there's always a tax for engaging customers on other people's platforms. I don't think this is any different." Ulta is seeing "double the conversion and intent" from shoppers finding its products through Gemini and ChatGPT. The company is working with Google to incorporate shopping carts and its Ulta Beauty Rewards loyalty program into AI-powered shopping within Gemini. But Friedman said the retailer would prefer customers complete transactions on Ulta's website. RETAILERS DEFEND THEIR TURF Executives argue that retailers retain an edge because they know far more about customer preferences than general-purpose AI tools do. "When a shopper completes a purchase on a brand's own site ... the retailer maintains a direct relationship with that customer," said Vince Koh, ⁠global head of digital commerce at Amazon Web Services (AMZN.O), opens new tab. AWS is encouraging retail clients, including Tapestry's (TPR.N), opens new tab Kate Spade, to use AI platforms to market products while ensuring their own websites remain "the best place to buy." When shoppers use AWS-powered search tools on Kate Spade's website to look for $380 suede bucket bags, the company can use information on products viewed, budgets and style preferences to personalize recommendations and build loyalty, Koh said. Retailers know more about their products and customers than "general-purpose" AI tools, Koh said, giving them an edge in recommendations and customer loyalty. Wedding-planning platform The Knot ⁠said it is taking a similar approach. The company is optimizing its website so its vendors appear in ChatGPT results, but it is trying to convince couples to book their wedding venues and invitations directly through the company's website. "LLMs are another place to start, another place to search, another place to plan, but we have three decades of data to help" people coordinate ⁠weddings, CEO Raina Moskowitz said, referring to AI large language models. RETAILERS KEEP THE UPPER HAND, FOR NOW While ChatGPT and Gemini are emerging as important ways to market products, consumers still appear more comfortable completing purchases on retailers' own websites. In March, OpenAI ended Instant Checkout, a tool that let shoppers buy clothes and other items through ChatGPT. The ⁠company is now focused on product discovery and helping merchants and marketplaces such as Etsy to use their own checkouts. Etsy has seen a similar pattern. Users who find products through ChatGPT typically return to Etsy's website to complete purchases, Chief Product and Technology Officer Rafe Colburn said. "It's the start of a deeper relationship, and not just one that's always intermediated by ChatGPT," Colburn said. Reporting by Arriana McLymore in New York City; Editing by Sayantani Ghosh and Rod Nickel Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence Arriana McLymore Thomson Reuters Arriana McLymore is a New York-based reporter covering e-commerce, online marketplaces, alternative revenue streams for retailers and in-store innovation. She previously reported on telecoms and the business of law.

AI Just Made Retail's Long Tail Pay Off | PYMNTS.com

Shopify's most recent quarter suggests artificial intelligence search is breaking that loop. Shopify President Harley Finkelstein said on the company's Aug. 5 earnings call that 75% of AI-attributed purchases on the platform came from outside Shopify's top 100 product categories, according to a transcript of the call. That same AI-referred traffic, and the orders behind it, each tripled year over year, PYMNTS reported. Finkelstein pointed to specific examples surfaced through AI search that quarter, including a car seat sized for three-across sedan installation and reef-safe sunscreen that doesn't leave a white residue, according to the transcript. A keyword search buries both under higher-volume competitors. An AI system matching against a specific description can find them directly. Retail Media's Whole Model Assumed a Human Was Scrolling If AI systems keep taking over discovery, the advertising model retailers have spent two decades building starts to strain. Retail media networks have historically depended on human attention, with sponsored listings, search placement and visual promotions designed to persuade a person scrolling through a page. Chris Selland, founder of Differential Factor and a lecturer at Northeastern University's D'Amore-McKim School of Business, sees that competition moving somewhere else entirely. "AEO is the new battleground for digital shelf space," Selland told PYMNTS, using the term for AI engine optimization. He described a future where product selection happens through an API call rather than a person browsing a page. That shift changes what a retailer can even measure. Retail media today runs on impressions, clicks and conversions tied to a person's engagement. An AI agent reduces how much time a shopper spends browsing, so those numbers stop being a useful proxy for what actually influenced the purchase. Structured product data, fulfillment information, trust signals and availability become the inputs that determine whether an AI agent includes a retailer or product in its recommendation process at all, PYMNTS reported. Consumers Are Ready to Let AI Make the Call Consumer demand is moving in step with that discovery shift. Nearly half of consumers, 48%, said they are at least somewhat interested in using AI agents to buy groceries or plan meals, according to PYMNTS Intelligence's "The Intelligent Spend Shift" report. Consumers also expressed similar interest in letting AI agents manage subscriptions (48%) and handle gift purchases (44%), the report found, as commerce moves beyond simple recommendation engines. Those systems are increasingly capable of initiating a transaction on a consumer's behalf, not just suggesting what to buy. For retailers carrying a large catalog, the consequence is concrete. A long tail of products never justified a homepage banner or a paid search budget, because there was no efficient way to connect that inventory to the right buyer. That changes once an AI system can find and describe a niche product directly to a shopper who asked for exactly that. Promotions built around visual merchandising and urgency will not disappear, but the more agents mediate discovery, the more those promotions have to shape the preferences and rules an agent weighs rather than catch a shopper's eye in the moment. For all PYMNTS AI coverage, subscribe to the daily AI Newsletter.

AI Is Bringing Retailers Their Best Customers but Not Closing the Sale | PYMNTS.com

Etsy CEO Kruti Patel Goyal told analysts during a second-quarter earnings call Thursday (Aug. 6) that traffic from AI agent platforms remained under 1% of Etsy's total, although it converts at a higher rate and larger average order size. DoorDash CEO Tony Xu said on the company's second-quarter earnings call Wednesday (Aug. 5) that agentic order volume from AI partners remains low across the board. Meanwhile, Ulta Beauty Senior Vice President of Digital and eCommerce Josh Friedman told Reuters that the company is incorporating shopping carts and its loyalty program into Google's Gemini because customers are finding its products there, but the initiative is still in its early days. Independent market data backs up what executives described. AI-referred traffic to retail sites in the United States grew 393% year over year in the first quarter of 2026, according to Adobe, whose insights are based on direct transactions online, covering more than 1 trillion visits to U.S. retail sites. Revenue per visit from AI referrals ran 37% higher than non-AI traffic as of March. Shoppers arriving from AI assistants also spent 48% more time on the page and browsed 13% more pages per visit than traffic from other channels. Shopify's own numbers pointed in the same direction. AI-referred traffic to Shopify stores tripled year over year in the second quarter, and orders through those AI channels tripled right along with it. New buyer orders from AI channels are arriving at nearly twice the rate of other channels, President Harley Finkelstein said on an earnings call Wednesday. Etsy Uses AI to Fix Its Discovery Problem Patel Goyal broke Etsy's AI strategy into three buckets. AI is making Etsy more personal, more discoverable, and learning how the next generation of shopping will work through native conversational tools. Search and personalization show Etsy's clearest AI wins. The company has built richer buyer profiles covering more than 65 million shoppers, feeding real-time personalization into search results, home feed content and marketing outreach, Patel Goyal said. The system creates a compounding effect, as the more a buyer engages, the more relevant each subsequent visit becomes. Meanwhile, DoorDash's Xu attributed the company's gap to most AI platforms prioritizing enterprise customers and coding tools over physical fulfillment. Every AI shopping assistant eventually must hand off to a person to check what's actually in stock, route an order to the right merchant and load a bag correctly. That handoff remains unsolved industry-wide. DoorDash's own AI tools are producing results without agentic partners. An ordering agent called DoorDash Ask can build a grocery cart in less than two minutes, and the company has automated catalog-building for new merchants joining the platform. Consumer survey data explains why the gap exists. The PYMNTS Intelligence report "The Agentic Commerce Deep Dive: Payment Infrastructure and the Path to Trust for Merchants" found that 48% of online shoppers used AI to research their most recent purchase. Separately, PYMNTS Intelligence found in the report "From Assistive to Agentic AI: Consumers Wade Into Autonomous Commerce" that 70% of consumers are interested in using AI agents for travel planning, and 71% for health and wellness. But only 49% would let an AI agent actually complete a purchase, and trust in AI platforms to handle that transaction drops to just 3% among consumers who don't already use AI regularly. Consumers will let AI find the product. Fewer will let it click the buy button. That is the same boundary Etsy and DoorDash described from the merchant side. For all PYMNTS AI coverage, subscribe to the daily AI Newsletter.

Retailers Steer AI Traffic Back to Own Checkouts | PYMNTS.com

While they want to tap into the growing amount of online traffic going through AI platforms, retailers want to retain the purchases and data that can support future sales and customer loyalty, according to the report. Ulta Beauty is incorporating shopping carts and its loyalty program into Google's Gemini because customers are finding its products there, but the company would prefer that customers complete transactions on its own website, Josh Friedman, head of digital and eCommerce at Ulta Beauty, said in the report. "Whether it's Google search, affiliate marketing [or] Facebook, there's always a tax for engaging customers on other people's platforms," Friedman said. "I don't think this is any different." Amazon Web Services (AWS) encourages its retail clients to market products on AI platforms while ensuring shoppers buy on their own websites, according to the report. "When a shopper completes a purchase on a brand's own site [...] the retailer maintains a direct relationship with that customer," Vince Koh, global head of digital commerce at AWS, said in the report. The Knot is optimizing its website so its wedding services vendors appear in ChatGPT results, but it encourages customers to transact on its own website because "we have three decades of data to help" them coordinate weddings, The Knot CEO Raina Moskowitz said in the report. Etsy has found that users who find products through ChatGPT tend to complete the purchases on Etsy's website, Rafe Colburn, chief product and technology officer at Etsy, said in the report. "It's the start of a deeper relationship, and not just one that's always intermediated by ChatGPT," Colburn said. The PYMNTS Intelligence report "The 50 Million Consumer Migration: The Data Behind Retail's Shift Toward AI Discovery" found that 49.6 million adults in the United States, about 19% of the population, begin their retail product search with AI. Among these consumers, 39 million mainly start their retail search with AI, while the other 10.6 million use AI alongside traditional channels, according to the report. "A shopper may begin with Gemini or Claude, then return to Amazon, traditional search or a merchant site to complete the sale," the report said. "That distinction will become increasingly important as AI-led discovery moves closer to checkout." For all PYMNTS AI coverage, subscribe to the daily AI Newsletter.