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Retail Media Breakfast Club
Agentic Commerce Isn’t the Threat You Think — Why Retailers Are Playing the Long Game
00:09:21
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A few months ago, the mood around agentic commerce in retail media circles was somber. There was a survey conducted by Emarketer and Bain late in 2025 which captured it. When retail media network leaders were asked about Future disruptive forces, zero click and Genai search disrupting discovery ranked as their first concern, with 36% of respondents saying that that was their top concern. Agentic AI changing ad buyer decision making came in second at 28%. And I've spent the past few months building the case that this threat to retail media is real. And I stand by that. But something has shifted in my private conversations with retail media leaders recently and what I heard while at Shop Talk a couple of weeks ago, the panic has cooled off. Retailers are asking sharper questions like what does this actually mean for my category, my customer, my suppliers, less existential dread, more practical sequencing. And that seems like progress. But there is also a problem here which is that most retailers aren't ready to respond to this shift even if they wanted to. The plumbing that would need to work before you can plug into any of this agentic demand is not yet ready. Let's jump in on a recent live stream that I hosted with Costco's Mark Williamson, who is the assistant vice president of retail media there. He framed agentic commerce as an order of operations thing, not a question of if, but a sequencing problem. Let's listen.
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But like this is, this clearly is a thing that we have to pay attention to and, but it, but like I think the instinct is to just jump in it. Like we gotta, this is a shooting star, we gotta go grab it. We're gonna miss the wave. Walmart's doing X, Amazon's doing Y. Like, like we gotta get in on this. The beauty is like Costco doesn't give into peer pressure. So there's an incredible patience to, to like now we'll let everybody else learn and do what they're gonna do. Let's just be really good at what we do. And so that there's a, there's kind of, that is I think inside of our approach to this. But, but like from an order of operations perspective, integrating with an AI assisted search or an LLM or whatever it is like that, that doesn't just happen. Like, like there are requirements to make that happen, whether they're legal or policy or the quality of your product feed and your data and all that kind of stuff. Like there's a lot to solve for. So we view this as more of like how are we ready for when that, when the company is ready to make that decision. So what I would expect from my team, from our product team, from our partners on it is are the decisions we're making today in our owned and operated ecosystem going to make it possible for us to integrate with an LLM when the company decides that's something we're going to do?
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Now this is a very different question from hey, should we build our ChatGPT retailer app? Costco is keeping its options open for their recent deal with Symbiosis. To run measurable Google shopping ads is one step in a broader upstream search strategy. As Mark said, Google today, ChatGPT tomorrow, perhaps. The modular tech stack that they've been building and publicly sharing is designed so that they don't paint themselves into a corner. And what makes this modularity possible is is Metar, Costco's data and identity layer. It's the plumbing that routes member level data to whatever new partner or activation tool Costco plugs into next. As a disclosure, Meta Router sponsored that live stream where that conversation took place At Shop Talk, a number of retailers opined on where they're at with agentic commerce and AI enabled commerce. A couple of pithy quotes, one from Home Depot's EVP of customer experience Jordan Broge, who described AI shopping features on third party platforms like ChatGPT as someone else's side quest, adding that the company doesn't want to pivot resources to try and be the first at something very nascent at the expense of scaled activities. But it's important to note that these aren't retailers that are dismissing the shift. They're just being honest that there are more pressing things to address right now. Meanwhile, Target CIO Pratt Vermana offered a glimpse into what this work actually looks like when you commit to it. In an interview with the Aisle, Pratt said that Target has rewritten 60% of its app code to be, in his words, AI ready, rebuilding their search engine and recommendation engines from scratch. That's the unsexy, expensive stuff that makes AI assisted commerce possible down the line. Of particular interest to me, in that same interview, Pratt said that Target's ChatGPT app integration now passes conversational queries from ChatGPT back to Target, giving them customer signals that they never had before. Where Target used to only know what people bought on Target, they can now combine that insight with LLM derived data on what people are buying and researching elsewhere. This was a real gold nugget in that interview. I really want to hear more about this, but I so far haven't been able to uncover many more specifics. But this is the kind of payoff that retailers only get after they've done that unglamorous sequencing work. Retailers know that a marketplace model can dramatically boost product assortment, shopper engagement and total revenue. But to get the most out of your marketplace, you you need an ad tech solution that can really engage sellers. Miracle Ads is powering the future of retail media for leading retailers to activate both 3P sellers and 1P brands. Learn more at Miracle.com that's M I R A K L dot com Anne Halleck, VP of America's at Miracle Ads, who I also spoke with at Shop Talk, described what she's seeing as as a little bit of capitulation amongst retail media leaders who've been anxious about agentic commerce. It's fertile ground for suggested for suggested products. I mean the truth is that a lot of retail media leaders who have been very concerned about how agentic will impact retail media, we're actually seeing a little bit of capitulation which is to say, hey, we have to get it right on site no matter what. If the agent is on site, let's get that right as well. The shift that she describes is that rather than panicking about external AI threats, they're focusing on getting the on site experience right first. Building contextual shopping assistance, improving product recommendations and creating the kind of intelligent on site experiences that would need to exist whether or not external AI agents ever send traffic their way. But this isn't a switch one can just flip on when the time comes. Mark Williamson has been at Costco for two and a half years. It's only very recently that the fun, exciting tech stack announcements have started rolling in. The data and identity layer that needed to get sorted came well ahead of all of this. Stitching together what members experience as one store, but what Costco internally manages 10 different businesses with disconnected systems. You think about the warehouse, online, eye care, travel. These are all there is not one unified view of the customer. Up until recently, if your tech stack still can't connect ad exposure to in store sales, getting it right on site itself is is a multi year project and the clock on external disruption doesn't pause while you catch up. None of this means that retailers should ignore agentic commerce. In fact, it's the opposite. Mark Williamson himself said that if AI assisted shopping becomes material, we have no choice. We're obligated to be there, take retail media out of it as taking care of our members. We have to have a point of view on that. Every quarter that a retailer spends without member level identity or closed loop measurement, that gap is going to get wider, and it's already pretty wide. Worrying about agentic commerce isn't a strategy, neither is ignoring it. The unsexy middle ground of fixing your data, sorting your identity layer, building for flexibility is where the actual work is.