AI's Impact on Retail and Consumer Behavior

Summary

Bloomberg Businessweek: “AI's Impact on Retail and Consumer Behavior”

Date: December 30, 2025
Hosts: Carol Massar, Tim Stenovec
Guest: Kimberly Shenk, CEO of Novi

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Episode Overview

This episode delves into the transformative role of artificial intelligence in the retail sector, focusing on how consumers’ shopping behaviors are rapidly changing and how brands are adapting to leverage AI-powered platforms. The conversation spotlights the soaring influence of AI agents like ChatGPT and Gemini on retail site traffic, and explores the strategies companies use to stand out in an increasingly data-driven landscape.

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Key Discussion Points & Insights

1. AI-Driven Traffic Surge in Retail ([02:18]–[02:50])

• 520% Increase in AI-Driven Retail Traffic: Kimberly Shenk shares that AI-driven retail site visits during this holiday season surged by 520% compared to last year, signaling a dramatic shift in how consumers discover and buy products.
• Role of Novi: Novi helps brands become more discoverable and trusted by AI recommendation models (e.g., ChatGPT, Gemini, Claude) by optimizing their product data.

2. How AI Connects Brands & Consumers ([02:50]–[03:29])

• Beyond Simple Recommendations: Instead of traditional “if you liked this, try this” algorithms, consumers are now turning to conversational agents to outsource complex shopping tasks—ranging from research and discount hunting to personalized gift curation.
• Shenk explains:

  “Consumers now flock to ChatGPT or Gemini and ask questions to actually do their shopping. … They’re outsourcing a lot of their research … to the agent.” —Kimberly Shenk [03:29]

3. Novi’s Competitive Edge ([03:51]–[04:55])

• Competitors: Novi faces competition from both new tech upstarts and traditional data companies like Syndigo, Salsify, and NielsenIQ.
• Key Differentiator—Verified Trust:
  • Novi feeds verified and personalized trust signals—certifications, reviews, badges, and third-party testing—directly to AI models.
  • Products with these trust signals are chosen 259% more often than by random chance.

  “We found that products that have verified trust signals are selected 259% more often than random chance.” —Kimberly Shenk [04:36]

4. Productivity & Conversion of AI Traffic ([04:55]–[05:54])

• Direct-to-Brand Conversion Trend: While traffic from AI agents to retail sites is skyrocketing, key questions about conversion rates remain—AI platforms are not yet sharing this data.
• Novi’s Finding: ChatGPT shopping research answers sent consumers directly to the brand website 86% of the time; only 14% of this traffic went to big-box retailers.

  “ChatGPT shopping research answers sent consumers directly to the brand’s website 86% of the time…” —Kimberly Shenk [05:37]

• Implication: Brands are getting more direct-to-consumer engagement, potentially boosting sales and conversion.

5. The Changing Role of Category Management ([05:54]–[06:51])

• Shift in Consumer Trust: Where shoppers once relied on retailers like Target to curate product categories, they now trust AI agents to do the work.

  “Consumers are using AI as their category manager. … The consumer has shifted their trust to AI to do the research and curation for them.” —Kimberly Shenk [06:12]

• Holiday Shopping Insight: The trend played out powerfully over the holiday season, with strong use of chatbots for shopping. The industry is waiting to see if this translates into long-term conversion and whether purchases will predominantly happen on brand sites or retailer platforms in 2026.

6. Fundraising and Investor Mindset ([06:51]–[07:30])

• AI is Essential for Funding: Investors are hyper-focused on companies deploying AI, especially those developing AI-driven commerce “agents.”

  “If you are not involved in AI … that’s what is hot for investors and that’s what is raising money …” —Kimberly Shenk [07:04]

• “Agent at Commerce” is the buzzword attracting venture capital.

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Notable Quotes with Timestamps

• On AI-driven shopping:

  “Consumers now flock to ChatGPT or Gemini and ask questions to actually do their shopping … outsourcing a lot of their research … to the agent.” —Kimberly Shenk [03:29]

• On verified trust signals:

  “Products that have verified trust signals are selected 259% more often than random chance.” —Kimberly Shenk [04:36]

• On direct-to-brand site traffic:

  “ChatGPT shopping research answers sent consumers directly to the brand’s website 86% of the time …” —Kimberly Shenk [05:37]

• On shifting trust from retailers to AI:

  “Consumers are using AI as their category manager… The consumer has shifted their trust to AI to do the research and curation for them.” —Kimberly Shenk [06:12]

• On investor trends:

  “If you are not involved in AI … that’s what is hot for investors and that’s what is raising money …” —Kimberly Shenk [07:04]

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Key Timestamps for Reference

• [02:18] – Introduction to show, AI’s retail impact, guest introduction
• [02:50] – Novi’s technology, basics of AI-driven discovery
• [03:29] – Deep dive into consumer behaviors and AI
• [03:55] – Novi’s competitors and differentiators
• [04:36] – Effectiveness of trust signals in AI recommendations
• [05:37] – Data on direct-to-brand traffic via ChatGPT
• [06:12] – Changing consumer trust from retailers to AI agents
• [07:04] – Today's investor focus: AI and commerce agents

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Engaging Takeaways

• AI is fundamentally changing the journey from product discovery to purchase. Consumers now rely on interactive agents as their trusted curators.
• Verified “trust signals” fed to AI recommenders significantly boost brand visibility and selection rates.
• Direct-to-consumer digital shopping is on the rise, with AI traffic increasingly skipping intermediary retailers.
• Investment capital is chasing companies leading the AI commerce revolution—especially those building actionable shopping agents.

This episode offers a forward-looking window into how AI is not just a retail play, but a transformative force for consumer behavior and business strategy heading into 2026.

Transcript

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[Podcast Host]

News. You're listening to Bloomberg Business Week with Carol Massar and Tim Stenovec on Bloomberg.

[Interviewer]

Radio. We do want to talk a little bit more about artificial intelligence and how it could influence the retail sector in the coming year. Our next guest says AI driven traffic to retail sites this holiday season surged by 520% over last year. So what does it mean? Let's ask Kimberly Shenk. She is CEO of Novi. It's a firm that uses AI to help connect brands with retail customers. Kim, great to have you here with Vonnie and myself. Tell us a little bit more about your your company and what exactly the role of AI to connect customers. What actually happens? Is it chat bots? Is it something.

[Kimberly Shenk]

More? Thanks so much for having me. Yeah, so Novi's technology we're actually helping retailers and brands increase their sales by ensuring their products are found and trusted and then ultimately recommended by AI models. So think ChatGPT, Gemini and Cloud. And so we do this, we work with, you know, leading retailers including Macy's, Sephora, Target, Ulta, Thomas, thousands of CPG brands and they rely on us to optimize their product data for AI driven discovery by.

[Interviewer]

Consumers. So when you say that it's basically a consumer who like does something and their data is processed and recorded and they're saying, oh, you bought that pair of pants, maybe you would like this pair of pants. Is that, is it as simple as something like that or is it more.

[Kimberly Shenk]

Sophisticated? It's a little bit different in terms of consumers now flocking to ChatGPT or Gemini and asking questions to actually do their shopping. So they're outsourcing a lot of their research, doing discount hunting, you know, personalized gift curation to the agent who's then going and finding products and recommending it to them based on just questions and.

[Interviewer]

Prompts. So who are your competitors and how do you stand out from.

[Kimberly Shenk]

Them? It's interesting. So there's a couple of different up and coming competitors in the tech space who are helping brands and retailers stand out in AI shopping. But we also have a lot of the older, more traditional data companies because we are a data company and we feed data with, through our partnerships with our retailer partners. So think about Syndico or Salsify or even Nielsen iq, some of those.

[Interviewer]

Older data partnership players and how then do you get the edge over.

[Kimberly Shenk]

Them? Yes. So a lot of what we're doing in these partnerships, and we'll be able to announce some of them really soon, is feeding trustworthy personalized information to the models themselves, which is what we have seen at Novi to increase your potential as a brand to show up in AI shopping. So we found that products that have verified trust signals are selected 259% more often than random chance. So think like certifications, reviews, badges, third party testing and we're feeding this directly to the retailers and the models so that they help the brands show up in AI recommendations to.

[Interviewer]

Consumers. So one of the things I always think about, Kim, is like how much of what is spent on a I to kind of attract consumers, retailers or folks to retailers. So in other words, that AI driven traffic to retail sites, how much of it is productive that results in actually a consumer buying.

[Kimberly Shenk]

Something? Yeah, that's actually a very interesting question. So we're seeing the traffic start to increase. There's actually we saw from Adobe analytics, like we just said, 520% over last year from AI. But what we're not sure about yet is conversion. And this is just because chatgpt Gemini, none of them are publishing the conversion results. But we at Novi, what we did see is that ChatGPT shopping research answers sent consumers directly to the brand's website 86% of the time, which means that the remainder of traffic, you know, only about 14% was sent to the large retailers like Walmart or Target. And so what brands are starting to see is more and more direct consumer traffic to their website, which is driving conversion and sales for.

[Interviewer]

Them. Interesting. Okay, so would you say based on the data that you see, because you see so much data that the consumer is doing well, that retail is doing well, like how much? You can obviously break it down, probably a lot. So give us a little bit of insight as we get ready to.

[Kimberly Shenk]

Wrap up this holiday shopping season. Well, so what we're actually seeing is consumers are using AI as their category manager. So think of it as we all used to trust the big box retailers for their ability to manage each shopping category, do the curation for us. And that's why you walked into a Target. Right? They scoured the earth for the best, most compelling products and we trusted them to do that. But now, and what we saw play out this holiday season, the consumer has shifted their trust to AI to do the research and curation for them. So, so we're seeing strong numbers and users using chatbots and shopping, but it's just not quite played out yet. And we'll see that in 2026 is where that conversion is going to happen, if it's going to happen direct on. The brand websites are still in.

[Interviewer]

Retail. Kimberly, just a word on yourselves. How difficult is it to raise money? What, what are the key words that investors are looking for these days and you know, the key.

[Kimberly Shenk]

Ideas? Yes, AI is definitely the hot topic. If you are not involved in AI doing something future with your company, that' progressing AI. So for example, we're in agent at Commerce. That is what is hot for investors these days and that's what is raising money and getting the majority of the capital in Silicon.

[Interviewer]

Valley. Well, the very best of luck. It sounds like a fantastic endeavor and I know you have a lot of experience so I think if anybody can continue to do it, you certainly can. That is Kimberly Shank, CEO of.

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