Podcast Summary: Thoughts on the Market

Episode: "A Novel Way to Shop Online"

Date: February 17, 2026
Host: Brian Nowak (US Internet Research, Morgan Stanley)
Guest: Nathan Feather (US Small and Mid Cap Internet Analyst, Morgan Stanley)

Overview

This episode explores how AI-powered shopping assistants—termed "agentic commerce"—are positioned to revolutionize the e-commerce landscape. Hosts Brian Nowak and Nathan Feather discuss the growth potential, key challenges, and market implications of digital agents that can handle purchases and research for consumers. They outline the impact on consumer behavior, industry profitability, and competitive dynamics, especially in sectors like grocery and household essentials.

Key Discussion Points & Insights

1. Defining Agentic Commerce & Market Potential

Timestamp: 00:09 – 01:59

• Agentic commerce refers to AI-powered agents capable of researching, recommending, and purchasing products for consumers.
• Brian Nowak sets expectations for growth:

  "We believe that agentic commerce could grow to be 10 to 20% of overall US E-commerce by 2030 and potentially add 100 to 300 basis points of overall growth." (00:41)

• Key categories like grocery and household essentials seen as major areas for agentic innovation due to their complexity and consumer pain points.

2. Consumer Adoption & Behavioral Gaps

Timestamp: 01:59 – 02:47

• Nathan Feather highlights a significant gap:

  "40 to 50% of consumers in the US already use different AI tools for product research. But only a mid single digit percentage...are actually really starting their shopping journey or buying things today." (01:32)

• Indicates strong demand but current tools and consumer habits are not fully developed:

  "At the moment, the tools aren't fully developed and the consumer behavior isn't yet there." (02:01)

• Adoption will accelerate as AI agents mature and become more intuitive.

3. Evolution of the Shopping Funnel and Advertising

Timestamp: 02:47 – 04:26

• Shift in discovery: AI agents will increasingly act as intermediaries at the start of the online shopping process.
• Brian Nowak emphasizes the value to large platforms:

  "These platforms...are going to be more important than ever for companies...to launch new products, introduce products to new customers..." (03:06)

• Social and video platforms may see advertising value surge, but it will become harder for new brands to reach customers directly.

4. Grocery as a “Category Unlock”

Timestamp: 04:26 – 05:32

• Online grocery shopping is especially fertile ground for agentic commerce due to complexity:

  "It's a very high friction category online. You have to go through and select each individual ingredient...ensure substitutions are correct." (04:28)

• AI shopping assistants can streamline the experience:

  "You can say something as simple as 'I want to make steak tacos for dinner'...it'll know your preferences, already like a certain brand of tortillas and it'll add those to the cart." (04:54)

• Market expects innovation "even over the next one to two years."

5. Profitability and Retail Media Risks

Timestamp: 05:32 – 07:26

• Profit pool concern: Most e-commerce profitability is currently driven by advertising and retail media attached to transactions.
• Nathan on risk to current models:

  "For most e-commerce companies a majority or sometimes even all of their e-commerce profitability comes from the advertising side." (06:28)

• Brian warns of search platforms reacting to maintain revenue:

  "I'd expect the search platforms to react by essentially making it more challenging to get free and direct and unpaid traffic." (07:50)

• There may be a shift from CPC (cost per click) models to commission-based models.

6. The "Five EYES" Retailer Framework

Timestamp: 08:41 – 09:50

• Framework explained: Inventory, Infrastructure, Innovation, Incrementality, Income statement.
• Nathan summarizes:

  "It's going to be very important that you're winning by differentiation, having unique competitively priced inventory with infrastructure that can fulfill that quickly...and staying on the leading edge of innovation." (09:09)

• Retailers must also expand market share (incrementality) while managing margin risk (income statement).

7. The Future of Agentic Commerce

Timestamp: 10:06 – 10:52

• Brian predicts agentic commerce will become the new normal:

  "We make it to the point where we don't even talk about agentic commerce...we just say this cool thing I did through my browser or...my groceries got delivered and it'll become part of recurring life." (10:08)

• Annual technological gains will solidify agentic commerce as a standard shopping method.

Notable Quotes & Memorable Moments

• Brian Nowak (on market potential):

  "Agentic commerce could grow to be 10 to 20% of overall US E-commerce by 2030." (00:41)

• Nathan Feather (on consumer demand):

  "Clearly there is demand from consumers...but the tools aren't fully developed and the consumer behavior isn't yet there." (02:01)

• Brian Nowak (on competitive dynamics):

  "It's going to be harder to reach new potential customers in an agentic world." (03:25)

• Nathan Feather (on grocery shopping):

  "'I want to make steak tacos for dinner' and it can add all of the ingredients you want to order...it just dramatically reduces the friction." (04:54)

• Brian Nowak (on normalizing agentic commerce):

  "We make it to the point where we don't even talk about agentic commerce ... it'll become part of recurring life, it'll become normal." (10:08)

Key Timestamps

• 00:09: Introduction to agentic commerce
• 01:32: Gap between AI product research and purchases
• 03:06: Agentic commerce’s impact on advertising and discovery
• 04:28: Why grocery is a major opportunity
• 06:28: Advertising/retail media profitability risks
• 08:41: "Five EYES" framework for retailers
• 10:08: Agentic commerce as a new routine

This episode provides a comprehensive look at the imminent transformation of online shopping driven by AI-powered digital agents, highlighting both the opportunities and challenges ahead for consumers, retailers, and digital platforms alike.