The rise in online traffic from AI tools has prompted retailers like Walmart, Ulta Beauty, and Wayfair to enhance their websites to ensure their products excel in chatbot queries. However, many prefer that purchases take place on their own platforms, enabling them to gather data on browsing behaviors, cart sizes, and previous purchases, which are essential for future sales and customer retention.
According to Juniper Research, shoppers are predicted to spend $8 billion this year after being directed to retail sites by AI agents like Anthropic’s Claude and Gemini. Adobe Analytics reports that 41% of U.S. consumers utilized generative AI for online shopping in June, with visitors referred by AI services generating 41% higher revenue per visit compared to those coming through traditional channels.
Unlike traditional search engines that rank pages by keywords and backlinks, chatbots answer specific questions, prompting retailers to reconsider how they present their products online and how consumers discover brands.
“We always want to be wherever our guest is,” stated Josh Friedman, Ulta Beauty’s head of digital and e-commerce. “Whether it’s Google search, affiliate marketing, or Facebook, there’s always a cost for interacting with customers on third-party platforms. I don’t see this as any different.”
Ulta is witnessing “double the conversion and intent” from those discovering its products through Gemini and ChatGPT. The company is collaborating with Google to integrate shopping carts and its Ulta Beauty Rewards loyalty program into AI-assisted shopping within Gemini.
Nevertheless, Friedman expressed that the retailer favors completing transactions directly on Ulta’s website.
RETAILERS DEFEND THEIR TURF
Executives maintain that retailers possess an advantage since they have a far deeper understanding of customer preferences than general-purpose AI tools.
AWS is guiding retail clients, including Tapestry’s Kate Spade, to leverage AI platforms for marketing while ensuring their sites remain “the best place to buy.”
When shoppers utilize AWS-driven search tools on Kate Spade’s website to search for $380 suede bucket bags, the company can leverage data on viewed products, budgets, and style preferences to offer personalized recommendations and foster loyalty, Koh explained.
Retailers have deeper insights into their products and customers than “general-purpose” AI tools, Koh asserted, giving them a competitive edge in recommendations and loyalty-building.
Wedding-planning platform The Knot is adopting a similar strategy. The company is enhancing its website to ensure its vendors appear in ChatGPT results while working to persuade couples to book their wedding venues and invitations directly through the company’s platform.
“LLMs are another entry point to start planning, but we have three decades of data to assist” couples in organizing weddings, said CEO Raina Moskowitz, referring to AI large language models.
RETAILERS KEEP THE UPPER HAND, FOR NOW
Though ChatGPT and Gemini are becoming essential channels for product promotion, consumers still seem more at ease completing transactions on retailers’ own websites.
In March, OpenAI discontinued Instant Checkout, a feature that enabled shoppers to purchase clothing and other items via ChatGPT. The focus has shifted to product discovery and supporting merchants and marketplaces like Etsy in using their own checkout systems.
Etsy has observed a similar trend. Users who discover products through ChatGPT typically return to Etsy’s website to finalize their purchases, according to Chief Product and Technology Officer Rafe Colburn.
“It’s the beginning of a deeper relationship, and not one that’s constantly mediated by ChatGPT,” Colburn remarked.
