As consumers increasingly turn to ChatGPT and Google Gemini for shopping advice, a fierce battle for traffic and customer data is reshaping the retail industry. Retailers including Walmart Inc (NYSE: WMT), Ulta Beauty Inc (NASDAQ: ULTA), and Wayfair Inc (NYSE: W) are optimizing their websites to secure top positions in AI chatbot search results. According to Juniper Research, retail spending guided by AI agents like Anthropic's Claude and Gemini is expected to reach $8 billion this year. Meanwhile, Adobe Analytics data shows that 41% of U.S. consumers already used generative AI for online shopping in June, with AI-referred visitors generating 41% higher revenue per order than those from traditional channels.

AI shopping assistants are reshaping e-commerce traffic structures at an unprecedented pace. A Bain & Company smart commerce report released in May 2026 found that ChatGPT's shopping recommendations in the U.S., UK, Germany, and France more than doubled year-over-year, with some retailers reporting that AI now contributes 25% of referral traffic. Bain's survey also revealed that 30% to 45% of U.S. consumers have used AI tools for shopping, and 64% have either used or are willing to try AI to complete purchases. Adobe's data is even more striking: in the first quarter of 2026, AI-driven online shopping traffic surged 393% year-over-year, and the trend continued after the holiday season. The conversion rate for AI-referred traffic is now 42% higher than non-AI traffic, a dramatic reversal from March 2025 when it was 38% lower. Shopify's data confirms this trend: in Q1 2026, AI-referred orders on its platform grew nearly 13 times year-over-year, with conversion rates nearly 50% higher and average order values 14% higher. Josh Friedman, Digital and E-commerce Head at Ulta Beauty, noted that consumers discovering its products through Gemini and ChatGPT show double the conversion rates and purchase intent. The company is collaborating with Google to integrate shopping carts and its Ulta Beauty Rewards loyalty program into Gemini's AI shopping platform.

Tech giants and e-commerce platforms are pursuing distinct strategies for AI shopping traffic. On one side, OpenAI and Google are championing an open approach, using natural language and smart recommendations to connect products and shopping scenarios across platforms and channels. Currently, about 20% of ChatGPT's referral traffic goes to Etsy Inc (NASDAQ: ETSY), 15% to Target Corporation (NYSE: TGT), and 10% to eBay Inc (NASDAQ: EBAY). On the other side, traditional platforms like Amazon.com Inc (NASDAQ: AMZN) and eBay are adopting more closed strategies. Amazon is using technical measures to block ChatGPT and Gemini from scraping its product data while accelerating development of its own AI shopping assistant, Rufus. By early 2026, over 300 million customers had used Rufus, with purchase conversion rates about 60% higher for those using the assistant, and sales generated by Rufus growing nearly $12 billion over the past year. Sensor Tower data shows heavy Amazon users now employ Rufus in about 60% of shopping sessions, and shoppers using the assistant are 2.74 times more likely to make a purchase. Vince Koh, Global Head of Digital Commerce at Amazon Web Services (AWS), stated, "When a shopper completes a purchase on a brand's own website... the retailer maintains a direct relationship with that customer." AWS is encouraging retail clients to use AI platforms to promote products while ensuring their own websites remain the "best place to buy."

Retailers are building defenses on two fronts against the traffic-draining effects of AI platforms. First, they are developing their own AI shopping assistants. Walmart launched Sparky, a generative AI-powered shopping assistant integrated into its app. Users of Sparky have an average basket size about 35% higher, and weekly active users doubled in the most recent quarter. Walmart is also pursuing an "embedding" strategy by placing Sparky within ChatGPT and Google Gemini to serve consumers directly in AI chats. Second, they are deepening their data moats. Retailers generally believe they have a unique competitive advantage over general AI tools because they understand their own products and customers better. Raina Moskowitz, CEO of wedding planning platform The Knot, noted, "LLMs are another starting point, another search point, another planning point, but we have 30 years of data to help couples coordinate their weddings." AWS's Koh pointed out that when a shopper searches for a specific item on a site like Kate Spade, retailers can use browsing history, budget, and style preferences to personalize recommendations and build loyalty.

The most significant event occurred in March 2026. OpenAI officially terminated ChatGPT's "Instant Checkout" feature, ending the ability for users to place orders and pay directly within AI conversations. Instead, it now directs users to third-party e-commerce platforms to complete transactions. One key reason for this decision was poor conversion rate data. Walmart executives disclosed that the actual conversion rate for Instant Checkout embedded in ChatGPT was only one-third of that achieved when users were redirected to the company's website, a 66% drop. An OpenAI spokesperson described the change as a strategic shift, stating, "Instant Checkout is moving to apps, where purchases can be more seamless." Etsy's experience validates this logic. As an early integration partner for ChatGPT's Instant Checkout, Etsy found that ChatGPT excels at product discovery. Rafe Colburn, Chief Product and Technology Officer at Etsy, noted that users who found products through ChatGPT typically returned to the Etsy website to complete purchases, adding, "This marks the beginning of a deeper relationship, not just one always mediated by ChatGPT." In May, Etsy launched a native app within ChatGPT, further solidifying its role as a "discovery layer" rather than a "checkout destination."

In the current wave of AI shopping assistants, retailers still hold a key advantage: consumers remain more willing to complete purchases on retailer websites. Although AI platform traffic is growing rapidly, the final stage of the conversion funnel—checkout—remains firmly in retailers' hands. Consequently, loyalty programs are becoming the strongest moat in this data battle. For example, Ulta Beauty has over 47 million loyalty members, and 95% of its sales are completed through its loyalty program. The company is working with Google to integrate shopping carts and Ulta Beauty Rewards into Gemini's AI shopping experience. Ulta has also launched its own AI shopping assistant, "Ulta AI," built on Gemini Enterprise. The deep logic of this strategy is that even if shoppers discover products through AI platforms, loyalty points and personalized experiences will drive them back to retailer-owned channels to complete transactions. As one industry observer noted, "Loyalty data has become the new currency in the AI era—whoever can master the most first-party shopping data can train the most accurate recommendation algorithms." As Ulta Beauty's Friedman put it, "Whether it's Google search, affiliate marketing, or Facebook, engaging with customers on someone else's platform always comes at a cost. I don't see this as any different." Retailers are willing to pay a "tax" on AI platforms for traffic, but they refuse to cede control of the customer relationship. However, this battle is far from over. Bain & Company predicts that by 2030, AI could influence 25% of U.S. e-commerce business. A NielsenIQ report indicates that in AI agent e-commerce, AI agents are becoming actual decision-makers, evaluating on behalf of consumers—and often comparing multiple retailers simultaneously. When AI agents evolve from "recommenders" to "decision-makers," retailers' brand premiums and customer loyalty will face unprecedented challenges.