NEW YORK (Reuters) – Traditionally, large retail chains invest millions to attract public attention during the holiday season. Now, they are looking to stand out through something different: artificial intelligence.
Most of the $253 billion in U.S. online sales this holiday season will come through website visits or ordinary online searches, which favor companies that invest heavily in search engine advertising.
But chatbots like OpenAI’s ChatGPT or Google’s Gemini have entered the scene, with consumer-facing tools that can provide product descriptions, compare prices or enable purchases directly in large language models, as North American consumers increasingly turn to AI for advice on the best holiday gifts.
FREE TOOL
XP simulator
Find out in 1 minute how much your money can yield
“We’re seeing brands that used to publish three or four new blog posts or articles a month now trying to publish 100 or 200,” said Brian Stempeck, CEO of generative search engine optimization platform Evertune.ai, which works with clients to make their sites discoverable by large language models.
The company charges “about $3,000” a month to its clients, which include apparel and footwear companies, for its services, Stempeck said.
Traditionally, retailers based their Google and Meta ads based on phrases users searched for or links they had previously clicked.
Continues after advertising
Without the ability to advertise on the biggest generative AI tools, companies are experimenting with new methods, like posting more frequently on brand blogs or writing about their products on Reddit.
Large retailers are creating websites that cannot be seen by shoppers, intended to be read exclusively by AI scrapers, automated data extraction tools that scour the internet for information.
Scrapers then send information to platforms like ChatGPT and Gemini, which offer suggestions for gifts, apparel and other products for the holiday season.
Early data suggests that the increased use of AI is having an effect. In the first 23 days of November, AI-driven traffic increased 830% year-over-year, according to Adobe Analytics, and consumers who accessed a retail website through an AI service were 30% more likely to purchase than those who used traditional internet searches.
Low traffic, higher intent
Traffic to retail websites from generative AI platforms still represents a small fraction of total activity. In October, ChatGPT referrals to Amazon, Walmart and eBay represented less than 1% of each site’s total traffic, according to data firm Sensor Tower. eBay stated that although traffic from AI sources represents a small percentage of total traffic, buyers who find its links through AI with agents come to the online marketplace with high purchase intent. Walmart did not respond to a request for comment.
But retailers clearly see an opportunity. Bedding company Brooklinen is paying influencers to talk about its bath towels and comforters on platforms like Facebook, YouTube and TikTok, said Rachel Levy, Brooklinen’s chief operating officer. AI scrapers extract information from the text of product reviews and the audio transcripts of these posts.
Continues after advertising
Brooklinen also submitted its $199 comforter to prizes from publications like the New York Times’ Wirecutter to increase its chances of appearing in AI agent responses.
Currently, traffic coming from AI sources with agents is “very small,” she said, because Gen Z, the biggest user of tools like ChatGPT, has less purchasing power than older generations.
Miami-based hair products company R+Co is buying ads on Amazon’s Alexa voice assistant based on questions customers ask its agent Rufus, said Dan Langer, president of R+Co.
Continues after advertising
Google recently launched features that help consumers use AI to track prices and purchase products, a task that is only possible if retailers’ products are easily found by the tech giant’s scrapers. Its AI mode and Gemini chatbot consider several factors, such as store location or retailer quality, when targeting users with links, said Lilian Rincon, vice president of product at Google Shopping.
Google is currently testing AI Mode ads in the US, but not in the Gemini app, the company said. Existing campaigns for Shopping and Performance Max ad products can run in AI Mode during the testing period, the company said.
Amazon Chief Executive Andy Jassy said on the company’s October earnings call that customers who use Rufus are 60% more likely to purchase products. Among major retailers, Walmart and Target recently announced plans for apps that will allow customers to purchase directly with chatbots.
