Attention Shoppers: AI Partnerships Have Entered the Store – NetChoice
If you thought retail competition was hot already, a new model of partnership has just fanned the flames. In recent weeks, OpenAI’s ChatGPT announced partnerships with Etsy, Shopify and Walmart (the nation’s largest retailer), which will enable customers to shop directly in these stores from ChatGPT. These collaborations are examples of just how dynamic the retail market truly is today, and they highlight the incredible innovation and fierce competition driving the retail sector forward.
Here’s how it works: when users open ChatGPT and ask for something, such as a gift for a friend or help restocking household items, the chatbot will surface product options from services like Etsy, Shopify, and soon, Walmart. Through a new feature called “Instant Checkout,” users can buy directly within the chat instead of clicking through to a retailer’s website. Behind the scenes, sellers can opt in to share their product catalogs with OpenAI, connecting their stores to this conversational shopping experience.
Importantly, OpenAI says checkout availability doesn’t influence product ranking; it ranks them based on relevance, price and quality. If a product has checkout availability, you can buy it right in ChatGPT. If it doesn’t, ChatGPT could still show it in recommendations, but you’d have to click a link to finish the purchase on Etsy, Shopify, Walmart, etc. This means consumers should be seeing the best and most relevant products first in their search queries.
The past few years have seen major innovations and pro-consumer disruption in the retail industry, including the proliferation of online marketplaces to the rise of commerce on social media services. This latest technological adoption appears already to be a win for consumers and demonstrates how competitive the retail industry remains.
Arguments that retail is consolidated frequently overlook the true size and scope of the ecosystem and the relentless pressure businesses face to innovate, adapt and serve consumers better. The moment a retailer rests, many competitors are ready to swoop in with a better product, a more convenient service or a more engaging experience.
This news also has important implications for the Federal Trade Commission’s (FTC) antitrust case against Amazon, in which the agency alleges that Amazon monopolizes online retail. The emergence of AI-powered shopping through generative AI companies like ChatGPT as a new channel shows that major retailers have many alternatives to Amazon’s marketplace. This directly contradicts claims that Amazon’s dominance prevents rivals from attracting sellers and shoppers.
With over a million Shopify merchants gaining access to this new commerce channel and other large retailers like Lowe’s entering the space, the market appears much more contestable than the FTC’s “Online Superstore Market” theory in its case suggests. As numerous technological advancements continue to surface, this adoption shows that innovation is rapidly unlocking new avenues for retail. This constant dynamism weakens the argument that Amazon’s current practices constitute insurmountable barriers to competition.
The beauty of this competitive landscape is that it ultimately benefits us consumers the most. When companies invest in cutting-edge technology like AI, they are doing so to provide us with the best and most innovative services available at the time. This means more personalized recommendations, more efficient shopping experiences and better deals, as AI can optimize supply chains and pricing. Similarly, other retailers, large and small, must step up their game. We’ll likely see a ripple effect across the industry, with competitors exploring their own AI integrations and innovative solutions to keep pace.
Going forward, expect many more announcements like this across retail to improve the experience for customers, staff, operations and more. This is a vibrant illustration of an industry that is intensely competitive, constantly innovating and deeply responsive to consumers.
Image via Unsplash.
