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Retail Media Breakfast Club
Dark Search & AI Shopping: The Hidden Threat (and Opportunity) for Retail Media
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It's a perilous exercise to take your own buying habits and extrapolate from them. A lot of our actions as consumers are unconscious, uninformed, and the very act of observing them changes our own behavior. That is called the Hawthorne Effect. But one of the fascinating parts of working in this industry is that we're all consumers and we each get this little slice of behavioral research from an N of 1. And while it's dangerous to over index on that, observing your own buying behavior is an excellent place to start asking questions. I've been doing that this past year. Regular listeners have heard the story of my Shark Glossy purchase before. This hairstyling tool was something I purchased with the help of ChatGPT. It helped me find a product that I'd never even heard of before. I visited a retailer.com and checked out right away. And while the retailer made that sale, they never had a shot at actually influencing my decision. I landed on the PDP and I checked out and that was it. I wrote about this emerging dark search behavior some weeks ago. The idea that it AI influenced discovery is growing, but is largely invisible to retailers analytics, and there were some head nods from some smart people, but not much hard data yet to confirm that it was widespread consumer behavior. So I was very pleased to find two pieces of research in the past couple of weeks that addressed this question directly, both from different angles and both drawing very different conclusions. Let's jump in. Criteo says that AI is expanding the pie so the first source is Critio's 2026 Commerce and AI Trend Report, which came out a couple of weeks ago. And one of the findings in this area was very upbeat from the report. They said that aggregated insights across A sample of Critio's US clients showed that AI referred visits had conversion rates 1 1/2 times higher than other referral channels, reinforcing the high intent nature of these visitors. At the same time, over 70% of LLM referred users now land directly on product pages, and that was up from 50% in mid 2020 shift. That is consistent with these higher conversion rates. And Critio's conclusion here is that AI expands the E Commerce pie. It's worth noting where Criteo sits in this picture. In March, they became the first ad tech company to integrate with OpenAI's advertising pilot in ChatGPT, connecting their 17,000 advertisers to that platform. So when Critio tells you that AI driven shopping is additive and good for everyone, they have a direct commercial interest in that being true. So while the findings of the higher conversion rates and the higher number of users landing directly on product detail pages comes directly from their research, I think the conclusion might need a little bit more investigation. Source number two Refi Bias says We're Flying Blind Last week Scott Wingo's team at Refi Buy and as a disclosure, Refi Buy is a company that I'm an advisor to. They published a detailed analysis of what they're calling Dark Agentic Commerce Traffic, or DACT D A C T. And they confirmed something I had suspected ever since writing that first piece about Dark search that when shoppers click through from AI apps like ChatGPT and Gemini, the referral headers get stripped. Google Analytics categorizes that traffic as direct when it comes from Gemini or Google AI mode when it comes from ChatGPT, it's not based on Retail Gentic's analysis of three independent data sets, they found that roughly 70% of AI influence traffic carries no referrer at all. And so what Google Analytics identifies as AI referral traffic may understate the real number by a huge percentage. Their analysis found that invisible traffic converts at an eye popping 10.21%, much higher than the 2.46% for average E commerce traffic. So so it's underscoring this Critio analysis that shoppers are hitting product pages, adding to cart and checking out very quickly, quite possibly the highest quality traffic source that most retailers have. I'm planning to do a deeper dive on this topic soon, but for now, the headline finding reinforces something I've been writing about for quite some time, that this referral data that we're all looking at. This might be dramatically understating AI's role in commerce. Did you know that leading retail media networks drive 85% of their ads through mid and long tail advertisers? Miracle Ads provides full funnel ad formats tailored to both 1P and 3P advertisers, leveraging unique AI capabilities that provide unprecedented levels of relevance and engagement. Retailers who want to capture ad spend from the long tail of 3PMarketplace sellers use Miracle ads in their tech stack. Learn more@miracle.com that's M I R A K L.com now let's rationalize these two readings. These data points aren't contradictory. They're measuring different slices of the same shift. Critio tracks what it can see through its merchant network. They're seeing that AI referrals are growing, that they're converting well, and that they're bringing new shoppers. All true as far as it goes. Refi buyers point is what Critio can see as a fraction of what is actually happening. App based AI traffic, which is growing faster than browser based traffic is almost entirely invisible to to analytics. The shopper who researches on ChatGPT and then Googles the brand name. Well, GA4 is going to credit that to branded organic search. A consumer who talks through a purchase with Gemini and then types the URL in directly is going to show up as direct traffic. I recently wrote a long feature article for Arthur D. Little's Prism publication. I'll add a link up to this in the show Notes which explores this shadow shopping economy in depth. The through line across all three pieces of work is the same, but a growing share of purchase decisions are being made inside AI conversations that retailers can't see and can't measure and can't facilitate an ad exposure at that critical decision making moment. So wrapping up here Criteos Expanding the pie framing is comforting if you're a retailer More shoppers, Higher Conversion what's not to like? What it misses is the retail media implication. Every one of those high converting pre decided shoppers arrive without generating the browse data, the search queries and the category page visits that retail media businesses monetize. They didn't see those sponsored product ads. They didn't produce the intent signals that make off site retail media audiences so valuable. The retailers still made the sale, but the media business lost the impression. The signal and the data. Criteo's report actually reinforces this concern. Even if that wasn't their intention. Their own Data says that 70% of of LLM referred users now land directly on product pages, up from 50% just six months ago. Those shoppers aren't browsing. They've already decided. And this is why to me, all signs point to this being a structural threat to retail media economics. Maybe not this year, maybe not in the next few months, but as this consumer behavior shifts, there are going to be implications for retailers media businesses. Thanks for listening and I'll catch you tomorrow.