Key facts
- Retailers are adapting websites to appear in AI chatbot search results.
- Many retailers want customers to complete purchases on their own sites to collect data.
- AI-driven shopping is expected to reach $8 billion in spending this year.
- 41% of U.S. consumers used generative AI for online shopping in June.
- AI-referred shoppers generate 41% higher revenue per visit compared to traditional channels.
- OpenAI has discontinued its Instant Checkout feature, shifting focus to product discovery.
Retailers are actively working to ensure their products appear prominently in search results generated by AI chatbots like ChatGPT and Google's Gemini, as shoppers increasingly turn to these platforms for recommendations. However, a key challenge for these businesses is to capture this growing online traffic without relinquishing valuable customer data that is crucial for driving future sales and fostering customer loyalty.
Companies such as Walmart, Ulta Beauty, and Wayfair are updating their websites to optimize for AI-driven searches. This strategic shift is driven by the significant revenue potential, with projections indicating that AI agents will direct $8 billion in spending this year. Adobe Analytics reported that 41% of U.S. consumers utilized generative AI for online shopping in June, and these AI-referred visitors generated 41% more revenue per visit than those arriving through traditional search engines.
Unlike traditional search engines that rely on keywords and links, chatbots respond to detailed queries, compelling retailers to re-evaluate how they describe their products and how customers discover brands. Ulta Beauty's head of digital and e-commerce, Josh Friedman, noted the importance of being present wherever customers are, comparing the engagement tax on AI platforms to that of other third-party platforms.
Ulta Beauty has observed a doubling in conversion rates and purchase intent from shoppers who discover its products via Gemini and ChatGPT. The company is collaborating with Google to integrate its shopping cart and loyalty program into Gemini's AI-powered shopping experience. Despite these efforts, Ulta Beauty prefers customers to finalize transactions directly on its own website.
Executives emphasize that retailers maintain an advantage due to their deeper understanding of customer preferences compared to general-purpose AI tools. Vince Koh, global head of digital commerce at Amazon Web Services, stated that when a purchase is completed on a brand's site, the retailer preserves a direct customer relationship. AWS is advising its retail clients, including Kate Spade, to leverage AI for marketing while ensuring their own websites remain the primary point of sale. This allows brands like Kate Spade to use browsing data for personalized recommendations and loyalty building.
The Knot, a wedding-planning platform, is adopting a similar strategy, optimizing its site for ChatGPT results while encouraging couples to book services directly. CEO Raina Moskowitz highlighted the platform's three decades of data as a key asset in wedding coordination.
While AI tools are becoming vital marketing channels, consumers still appear more comfortable completing purchases on retailers' own websites. OpenAI has discontinued its Instant Checkout feature, which allowed in-chat purchases, and is now focusing on product discovery and enabling merchants to use their own checkout processes. Etsy has observed a similar trend, with users typically returning to its platform to finalize purchases made after discovering items through ChatGPT, indicating a preference for direct customer relationships over intermediated transactions.