The emergence of Amazon three decades ago marked the beginning of a seismic change in retailing. Now the industry has reached another technology-driven turning point, one that is likely to disrupt the business model as decisively as e-commerce did. OpenAI — whose ChatGPT first brought the revolution in artificial intelligence to widespread public attention — upped the ante for retailers and CPG companies late last month with the launch of Instant Checkout, a tool that enables users to purchase products without leaving the platform.
Based on the Agentic Commerce Protocol developed by OpenAI and Stripe, Instant Checkout allows ChatGPT users in the U.S. to buy single items from sellers on Etsy, and soon will give them access to more than a million merchants on the Shopify platform. The open-source technology is envisioned by its creators as an important step toward a marketplace in which AI agents play a significant part in buying decisions for consumers. As noted elsewhere in this issue, Dan O’Connor, an executive fellow at the Harvard Business School, predicts that between 30% and 40% of grocery products will be purchased by personalized digital agents by the end of the decade.
The implications of that shift are profound. Instant Checkout gives consumers turning to ChatGPT for product search to then place an order by hitting a single button; retailers, which pay a fee for the service, take it from there. Instant Checkout promises to generate incremental sales for participating merchants, but at what cost? The new model inserts a middleman between retailer and customer, and could — coupled with the move by suppliers toward pursuing direct-to-consumer sales — disintermediate existing relationships. Similar services are expected to be introduced by Apple, Google, Meta and other tech companies.
Well aware of AI’s disruptive power, the nation’s top retailers are racing to harness the technology to defend their turf. Digital shopping assistants — Amazon’s Rufus, Kroger’s ChefBot and Walmart’s Sparky, among others — are just the beginning of a journey that is all but certain to result in a range of AI agents that customers can employ to enhance the shopping experience. A recent study by the Acosta Group found that 70% of consumers have received help from an AI-powered tool while shopping, as they seek not only to identify items they want to buy but to save time and money. Fifty-seven percent of consumers are, however, still unaware that they can make purchases with the technology. As that number rises — the result of ongoing efforts of OpenAI and others — the digital realm will become the decisive battleground in the retail and CPG sectors. Any business that ignores that reality and fails to prepare for it does so at its peril.
