Key Takeaways:
- Retailers are building their own AI-powered shopping tools to stay close to customers as buying decisions shift toward automation
- The goal is to keep control over how products are shown, sold, and bundled, rather than relying on third-party platforms
- Retailers such as Lowe’s, Kroger, and Papa Johns are experimenting with AI agents to help shoppers search for items, get support, or place orders
- Google is offering retailers a way to deploy agents inside their own apps and websites, rather than sending customers elsewhere
- Retailers are cautious about selling directly through tools built by companies like OpenAI or Microsoft, due to concerns about customer loyalty and advertising revenue
Introduction to the Problem
The rise of AI-powered shopping tools has created a new challenge for retailers: how to maintain control over the shopping experience as customers increasingly turn to chatbots and automated assistants to make purchasing decisions. As Yael Cosset, Kroger’s chief digital officer and executive vice president, notes, "Things are moving at a pace that if you’re not already deep into [AI agents], you’re probably creating a competitive barrier or disadvantage." To address this issue, many retailers are building their own AI-powered shopping tools, rather than relying solely on third-party platforms.
The Importance of Control
For retailers, the key to success in the age of AI-powered shopping is control. By building their own AI agents, retailers can ensure that they have a say in how their products are shown, sold, and bundled. As Lauren Wiener, a global leader of marketing and customer growth at Boston Consulting Group, explains, "There’s a market shift across the spectrum of retailers who are investing in their own capabilities rather than just relying on third-parties." This approach allows retailers to maintain customer loyalty, reduce the risk of losing add-on sales, and protect their advertising revenue.
The Challenge of Building and Maintaining AI Systems
Building and maintaining AI-powered shopping tools is not a simple task. The underlying models change quickly, and tools that work today may need to be reworked weeks later. As Seemantini Godbole, Lowe’s chief digital and information officer, notes, "The tech we build can become outdated in two weeks." To address this challenge, many retailers are working with multiple vendors, rather than relying on a single provider. For example, Lowe’s works with Google, as well as other companies, to support its AI agent strategy.
Testing and Experimentation
Many retailers are taking a cautious approach to AI-powered shopping, testing and experimenting with different tools and vendors. Papa Johns, for example, is testing Google’s food ordering agent to handle tasks such as estimating how many pizzas a group might need based on a photo uploaded by a customer. As Kevin Vasconi, Papa Johns’ chief digital and technology officer, explains, "I don’t want to be an AI expert in terms of building the agents. I want to be an AI expert in terms of, ‘How do I use the agents?’" This approach allows retailers to understand how AI can be used to improve the shopping experience, without committing to a specific solution.
The Role of Google
Google is playing a key role in the development of AI-powered shopping tools, offering retailers a way to deploy agents inside their own apps and websites. As Ed Anderson, a tech analyst at Gartner, notes, "The real challenge here is application of the technologies. These announcements take a step forward so that retailers don’t have to start from ground zero." Google’s tools are designed to lower the barrier for retailers that do not want to start from scratch, allowing them to test and experiment with AI-powered shopping without committing to a specific solution.
Conclusion
The rise of AI-powered shopping is creating new challenges and opportunities for retailers. As customers increasingly turn to chatbots and automated assistants to make purchasing decisions, retailers must find ways to maintain control over the shopping experience. By building their own AI-powered shopping tools, working with multiple vendors, and testing and experimenting with different solutions, retailers can stay ahead of the curve and ensure that they remain relevant in a rapidly changing market. As Cosset notes, "[AI agents] are not just top of mind, it’s a priority for us. It’s going at a remarkable pace."
Retailers like Kroger and Lowe’s test AI agents without handing control to Google