Artificial intelligence has changed retail. From AI agents on every website ready to help with your order, to algorithms automatically ordering inventory; the way we shop has been revolutionized. This year shoppers are expected to spend 1.8 trillion USD on AI recommended products, making up over a fifth of all sales.
From Check Out to Chat Bots
What does it actually mean to shop with AI? From on-site agents that recommend products and boost conversion, to AI-powered search, chatbots that compare prices and reviews, and even in-app checkout, AI is reshaping the entire shopping journey.
It’s not just the tech obsessed using AI like this, four in ten people are already using AI tools for shopping. Now brands are starting to catch on and optimize their content to be picked up by artificial intelligence, search engine optimization is being overtaken by generative engine optimization, and this makes sense as AI is showing higher conversion rates than traditional retail channels.
As AI continues to establish itself as essential retail sector, large companies have started to capitalize on that; Etsy, Shopify, Walmart, Target, and Salesforce have announced collaboration with OpenAI, the company that runs ChatGPT, allowing consumers to buy their products without ever leaving the application. This marks a major change in e-commerce space. Instant Checkout as OpenAI calls it, is powered by Irish based tech company, Stripe, with plans to integrate PayPal through 2026. So far, this feature is only available in the United States.
The Price is Right
AI doesn’t stop at the checkout. It’s reshaping how prices are set. Algorithmic pricing, also called pain point pricing, is when AI uses your available consumer data to offer a price that it thinks is the most you will pay. A recent study from Consumer Reports, Groundwork Collaborative and More Perfect Union, revealed this pricing is already being implemented without us knowing. Instacart has been testing what consumers will pay, putting consumers in categories and offering them different prices.
Delta Airlines also recently was under scrutiny for the same issue, when they announced to shareholders they were starting to use algorithmic pricing for domestic tickets. They would be able to use your location, type of device used, general shopping patterns, and any key cookies left in your cache, before it offers you a price, ensuring maximum profits. However, backlash and government intervention lead to the Delta president saying they would not be implementing this.
As this technology develops, so are the laws protecting consumers. Last month New York state passed the first law against it, now when you checkout, any company that uses dynamic pricing must show the notification, “This price was set by an algorithm using your personal data.” While this is the first piece of AI pricing legislation in the US, it is far from the last with several other US states having pending legislation. It’s unclear so far how the EU plans to address the issue.
Inventory Optimization
The final major pilar of AI in retail is supply chain management. AI is now being used to optimize all aspects of the retail tunnel. From demand forecasting to customer segmentation AI is predicting your shopping habits before they happen. This data can save companies millions: making sure stock is appropriately distributed, automated employee scheduling based on predicted store traffic, and optimize shipment readiness.
This is making things more efficient from the warehouse to shopping isles, minimizing transport waste and stock expiring, providing tailored inventory management to avoid stock shortages or stacks of products sitting unpurchased on the shelves. So far AI implementation is already showing promise with companies that have implemented machine learning outperforming those who have not.
However, these improvements come at a risk. Companies must account for possibility of inaccurate data, with systems this large and a variety of data sources; users must be alert to the spread of misinformation. It is recommended that AI systems be overseen by humans, as any fault or shut down in the program will require human experts to take over. With so much data condensed into one space, companies must remain vigilant against hacking and cyberattacks and prioritize safeguarding customer data.
Looking to the Future
AI is impacting nearly every industry, and retail is no different; from seamless in app checkout to making sure there is never a stock shortage, AI is streamlining and disrupting the shopping industry at every turn.
Interested in more? Check out our article: From Search to Chat.
To get insights like this directly from top executives in Artificial Intelligence and Retail, get your pass to VivaTech 2026
