Retailers tap AI shopping traffic but fight to keep customer data

As more shoppers consult AI-powered shopping assistants like ChatGPT and Google's Gemini for product recommendations, retailers are competing to appear in those chatbot results while trying to maintain control over customer data. Companies such as Walmart, Ulta Beauty and Wayfair have updated their websites to ensure their products rank highly in chatbot searches.

However, many retailers prefer customers to complete purchases on their own websites, where they can gather valuable data on browsing behaviors, shopping carts and past purchases to drive future sales and customer loyalty.

Juniper Research forecasts that shoppers will spend $8 billion this year following guidance from AI agents such as Anthropic's Claude and Google's Gemini. According to Adobe Analytics, 41% of US consumers used generative AI for online shopping in June, with visitors arriving via AI services generating 41% higher revenue per visit than those arriving through traditional channels.

Unlike search engines, which rank pages based on keywords and links, chatbots respond to detailed queries, forcing retailers to adapt how they describe products online and how customers discover brands. Ulta Beauty's head of digital and e-commerce, Josh Friedman, emphasized the importance of being present wherever customers are, whether through Google search, affiliate marketing or social media platforms.

Ulta Beauty has noticed double the conversion and intent from customers finding its products through Gemini and ChatGPT, and the company is collaborating with Google to integrate shopping carts and its loyalty program into AI-powered shopping within Gemini.

Retailers argue that their advantage lies in their deep understanding of customer preferences, which general-purpose AI tools lack. When shoppers make a purchase on a brand's own website, the retailer maintains a direct relationship with that customer. Vince Koh, Amazon Web Services' global head of digital commerce, explained that when shoppers use AWS-powered search tools on brands like Kate Spade's website, the retailer can leverage information on viewed products, budgets and style preferences to personalize recommendations and foster loyalty.

Despite the growing influence of AI shopping assistants, retailers remain confident in their ability to retain customers. In March, OpenAI discontinued Instant Checkout, a tool allowing shoppers to complete clothing and other purchases through ChatGPT. Now, OpenAI is focusing on product discovery and enabling merchants and marketplaces like Etsy to utilize their own checkout processes.

Etsy's Chief Product and Technology Officer, Rafe Colburn, noted that users finding products through ChatGPT typically return to Etsy's website to finalize purchases, signifying the beginning of a deeper relationship with the platform rather than one continuously mediated by AI.