If AI Agents Are Doing the Shopping, How Do Brands Adapt? 🤖🛒

Hi there,

Happy Easter & Passover to those who celebrate! 🐣✡️🌷

We're in the middle of a massive shift in how consumers discover and interact with brands.

For the last decade, the playbook was simple: optimize your website, rank high on Google, and convert traffic. But the interface for shopping is changing quickly.

Consumers are bypassing traditional search entirely and asking AI chatbots for recommendations instead.

AI isn't just a new marketing channel - it is becoming the new storefront. And if you look closely at what is happening in the industry right now, you can see a clear progression: AI is eating the marketing funnel, retailers are moving their storefronts into the chat window, and eventually, the AI itself will become the buyer.

Here is how this shift is playing out in three stages:

1️⃣ The disruption of the marketing funnel

For decades, marketers relied on a predictable journey: build awareness at the top of the funnel and capture demand at the bottom.

Conversational AI is blowing up this model because it sits right in the middle of the funnel.

When consumers ask a chatbot for recommendations, they are expressing targeted interest, but they get a complete, curated answer without ever seeing a brand's carefully crafted web presence.

In fact, research shows that online searches drop roughly 20% after people adopt AI chatbots like ChatGPT [1].

This means brands can't just rely on Search Engine Optimization (SEO) anymore; they have to optimize for Generative Engine Optimization (GEO) to ensure they show up when AI curates these answers [1].

2️⃣ Retailers are moving the storefront into the AI

Because discovery is now happening inside LLMs, the smartest brands aren't fighting to pull users back to their websites. Instead, they are bringing the dot-com experience directly into the chat interface. It's a massive shift from destination shopping to embedded shopping.

Walmart just debuted an in-platform commerce agent, Sparky, inside ChatGPT. It supports the full shopping journey - from discovery in ChatGPT to a Walmart environment with account linking, loyalty, and payment [2].

Sephora launched an app in ChatGPT that recommends answers based on a user's Beauty Insider profile. Soon, shoppers will be able to use loyalty promotions and check out directly within the app [3].

The commentary here is clear: the brands that win won't force customers to navigate a website. They will embed their trusted, personalized experiences wherever the customer already is.

3️⃣ The rise of "Agentic AI" - when the bot becomes the buyer

If stage one is AI answering questions, and stage two is humans shopping inside AI, stage three is the AI shopping for us.

The search revolution is disruptive enough, but this next transformation matters even more: AI agents are starting to make purchasing decisions autonomously [1].

Imagine telling your AI assistant: "I need a new laptop for work. My budget is $2,000. Order one for me." The AI researches, evaluates, and buys - no product page visited, no review read.

By building seamless in-chat checkout experiences today, brands like Walmart and Sephora are actually laying the infrastructure for tomorrow. They are preparing for a world where the question for brands is no longer just who is your customer, but what is your customer?

What this means for brands

When you connect these three shifts, a stark reality emerges: if algorithms are going to control discovery, curate the storefront, and eventually make the purchasing decisions, brands face a real risk of being entirely in the dark.

You cannot be 100% dependent on what a chatbot decides to recommend.

The brands that will thrive in this new era are the ones that prioritize owning their first-party data and building direct, 1:1 relationships with their consumers. Whether that's through loyalty programs, community building, or creating a digital connection straight from your physical packaging (something we think about constantly at Brij), the goal is the same: give customers a reason to connect directly with you, bypassing the algorithms entirely.

We are building toward a world where the friction of buying is completely removed. But the brands that own the direct relationship will always have the advantage, no matter who - or what - is doing the shopping.

Reply and let me know: how is your brand thinking about AI-led discovery and the future of search?

Best,

Kait

References:

[1] Harvard Business Review - AI Is Upending Marketing on Two Fronts

[2] Retail Dive - Walmart brings Sparky to ChatGPT as OpenAI rethinks Instant Checkout

[3] Retail Dive - Sephora launches app in ChatGPT