Tag Archives: Online Retail

The AI Agent Paradox

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How E-commerce Must Proactively Manage Experiences Created Without Their Consent

LAST UPDATED: November 7, 2025 at 4:31 PM

The AI Agent Paradox

GUEST POST from Art Inteligencia

A fundamental shift is underway in the world of e-commerce, moving control of the customer journey out of the hands of the brand and into the hands of the AI Agent. The recent lawsuit by Amazon against Perplexity regarding unauthorized access to user accounts by its agentic browser is not an isolated legal skirmish; it is a red flag moment for every company that sells online. The core challenge is this: AI agents are building and controlling the shopping experience — the selection, the price comparison, the checkout path — often without the e-commerce site’s knowledge or consent.

This is the AI Agent Paradox: The most powerful tool for customer convenience (the agent) simultaneously poses the greatest threat to brand control, data integrity, and monetization models. The era of passively optimizing a webpage is over. The future belongs to brands that actively manage their relationship with the autonomous, agentic layer that sits between them and their human customers.

The Three Existential Threats of the Autonomous Agent

Unmanaged AI agents, operating as digital squatters on your site, create immediate systemic problems for e-commerce sites:

  1. Data Integrity and Scraping Overload: Agents typically use resource-intensive web scraping techniques that overload servers and pollute internal analytics. The shopping experience they create is invisible to the brand’s A/B testing and personalization engines.
  2. Brand Bypass and Commoditization: Agents prioritize utility over loyalty. If a customer asks for “best price on noise-cancelling headphones,” the agent may bypass your brand story, unique value propositions, and even your preferred checkout flow, reducing your products to mere SKU and price points. This is the Brand Bypass threat.
  3. Security and Liability: Unauthorized access, especially to user accounts (as demonstrated by the Amazon-Perplexity case), creates massive security vulnerabilities and legal liability for the e-commerce platform, which is ultimately responsible for protecting user data.

The How-To: Moving from Resistance to Proactive Partnership

Instead of relying solely on defensive legal action (which is slow and expensive), e-commerce brands must embrace a proactive, human-centered API strategy. The goal is to provide a superior, authorized experience for the AI agents, turning them from adversaries into accelerated sales channels — and honoring the trust the human customer places in their proxy.

Step 1: Build the Agent-Optimized API Layer

Treat the AI agent as a legitimate, high-volume customer with unique needs (structured data, speed). Design a specific, clean Agent API separate from your public-facing web UI. This API should allow agents to retrieve product information, pricing, inventory status, and execute checkout with minimal friction and maximum data hygiene. This immediately prevents the resource-intensive web scraping that plagues servers.

Step 2: Define and Enforce the Rules of Engagement

Your Terms of Service (TOS) must clearly articulate the acceptable use of your data by autonomous agents. Furthermore, the Agent API must enforce these rules programmatically. You can reward compliant agents (faster access, richer data) and throttle or block non-compliant agents (those attempting unauthorized access or violating rate limits). This is where you insert your brand’s non-negotiables, such as attribution requirements or user privacy protocols, thereby regaining control.

Step 3: Offer Value-Added Agent Services and Data

This is the shift from defense to offense. Give agents a reason to partner with you and prefer your site. Offer exclusive agent-only endpoints that provide aggregated, structured data your competitors don’t, such as sustainable sourcing information, local inventory availability, or complex configurator data. This creates a competitive advantage where the agent actually prefers to send traffic to your optimized channel because it provides a superior outcome for the human user.

Case Study 1: The Furniture Retailer and the AI Interior Designer

Challenge: Complex, Multivariable E-commerce Decisions

A high-end furniture and décor retailer struggled with low conversion rates because buying furniture requires complex decisions (size, material, delivery time). Customers were leaving the site to use third-party AI interior design tools.

Proactive Partnership:

The retailer created a “Design Agent API.” This API didn’t just provide price and SKU; it offered rich, structured data on 3D model compatibility, real-time customization options, and material sustainability scores. They partnered with a leading AI interior design platform, providing the agent direct, authorized access to this structured data. The AI agent, in turn, could generate highly accurate virtual room mock-ups using the retailer’s products. This integration streamlined the complex path to purchase, turning the agent from a competitor into the retailer’s most effective pre-visualization sales tool.

Case Study 2: The Specialty Grocer and the AI Recipe Planner

Challenge: Fragmented Customer Journey from Inspiration to Purchase

An online specialty grocer, focused on rare and organic ingredients, saw their customers using third-party AI recipe planners and shopping list creators, which often failed to locate the grocer’s unique SKUs or sent traffic to competitors.

Proactive Partnership:

The grocer developed a “Recipe Fulfillment Endpoint.” They partnered with two popular AI recipe apps. When a user generated a recipe, the AI agent, using the grocer’s endpoint, could instantly check ingredient availability, price, and even offer substitute suggestions from the grocer’s unique inventory. The agent generated a “One-Click, Fully-Customized Cart” for the grocer. The grocer ensured the agent received a small attribution fee (a form of commission), turning the agent into a reliable, high-converting affiliate sales channel. This formalized partnership eliminated the friction between inspiration and purchase, driving massive, high-margin sales.

The Human-Centered Imperative

Ultimately, this is a human-centered change challenge. The human customer trusts their AI agent to act on their behalf. By providing a clean, transparent, and optimized path for the agent, the e-commerce brand is honoring that trust. The focus shifts from control over the interface to control over the data and the rules of interaction. This strategy not only improves server performance and data integrity but also secures the brand’s place in the customer’s preferred, agent-mediated future.

“The AI agent is your customer’s proxy. If you treat the proxy poorly, you treat the customer poorly. The future of e-commerce is not about fighting the agents; it’s about collaborating with them to deliver superior value.” — Braden Kelley

The time to move beyond the reactive defense and into proactive partnership is now. The e-commerce leaders of tomorrow will be the ones who design the best infrastructure for the machines that shop for humans. Your essential first step: Form a dedicated internal team to prototype your Agent API, defining the minimum viable, structured data you can share to incentivize collaboration over scraping.

Image credit: Google Gemini

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Reinventing the Retail Store

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Online orders are increasingly fulfilled through stores, making retailers much more efficient and competitive

Reinventing the Retail Store

GUEST POST from Howard Tiersky

I’ve worked with a lot of online retailers over the years, and a frequent question I’ve received is, “When you have physical stores and you also have an online presence, where should you be shipping goods from?”

In the early days, a lot of retailers were trying to ship from their stores because that’s where the merchandise was.

Further, these retailers didn’t necessarily have the infrastructure or process in their warehouses to ship directly to the consumer. Their warehouses were just for shipping goods to the store.

But when e-commerce started to take off in a major way and orders jumped, those retailers that we’d think of as traditional large brick and mortar stores started to do the vast majority of their e-commerce shipping from centralized distribution centers, so much so that some actually had quite different inventory from their stores.

As a result, there was a period where chains were shipping from centralized distribution centers for the most part.

In some cases, these chains didn’t even expose you to what was available in the store when ordering online.

BUY ONLINE, PICK UP IN THE STORE

After that, retailers started trying to show us alternatives.

“Buy online, pick up in the store” became increasingly prevalent, with retailers creating more integrated systems that allow us to see the online merchandise that may not be available in the store, as well as the store merchandise that might not be available online.

Some of the merchandise was available in both places, and you could at least see the full universe through these systems.

You would know if an item was carried in the retailers’ stores, then you could find out if your local store had it, buy it online, and arrange to pick it up there.

Once retailers got to that point, it became more and more logical to have the store ship at least some merchandise out, as they did in the early days.

And today, we’re seeing even more shipping from stores because e-commerce orders that are “order online, pick up in the store” have risen substantially with Covid.

With more and more orders being fulfilled this way, it’s imperative that stores are able to handle e-commerce effectively.

NEWFOUND ADVANTAGE

In fact, Best Buy reported recently that 60% of their e-commerce orders are either buy online, pick up in store or buy online, pick up curbside.

More than half of their online orders are not only being fulfilled through the store, but they’re actually being physically picked up at the store.

As physical retailers continue their effort to compete with Amazon, they realize that one of the assets that they have that Amazon does not have at that scale is a physical store location.

It makes sense to use this shift as an opportunity to either make it convenient to pick up items that are ordered online or even start to use stores as distribution hubs to permit faster delivery for items that are ordered to the home.

In their recent announcement, Best Buy also reported that of their thousand stores, they have designated 250 of them as distribution hubs.

This means that they will be using those stores not only as physical showrooms but also as fulfillment centers for e-commerce orders.

So if you order something on the Best Buy website, it’s increasingly likely to come from the back room of your local Best Buy.

DISRUPTIVE CHANGE

This shift is interesting because it’s not just Best Buy—we’re seeing it across the industry.

And when you have a lot of retailers repurposing their physical locations as e-commerce hubs, there are bound to be greater implications.

For one, this change is going to affect store design, as stores will need larger storage areas and shipping facilities.

As a result, the ratio of the back of the store to the front of the store will probably shift.

It may also make a shift in terms of how stores think about real estate.

A location that may not have been viable due to a lack of foot traffic may all of a sudden make sense if it’s in a convenient spot for pickup or in a central location that allows online orders to be distributed to a large geographic area.

In focusing more and more on fulfilling orders through their store locations, Best Buy may see additional, industry-specific benefits.

In the electronic space, we know that there are a lot of SKUs, and it’s hard to keep some items on stock, particularly the ones that are popular.

The opportunity to leverage not only the inventory at a warehouse or distribution center but all the inventory sitting in their stores expands Best Buy’s ability to provide a great customer experience.

Today’s top retailers are making sure that if they’ve got that new iPhone, or camera lens, or obscure cable, or whatever it is that you’re looking for anywhere in their ecosystem, they are going to find a way to get it to you one way or the other.

This article originally appeared on the Howard Tiersky blog
Image Credit: Unsplash

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Who is the Innovator? Amazon or Kroger?

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Kroger ClickList

Now, first of all, Kroger is a Cincinnati-based company not a Seattle-based company, so it is only natural that I should hear more about the things Amazon is experimenting with than those of Kroger, owners of a portfolio of grocery brands, including: Ralphs, Fred Meyer, QFC, Kroger, fry’s, Food4Less, King Soopers, Harris Teeter, and more.

Amazon has been making a lot of noise with some of their experiments lately, including a convenience store concept where eventually you will be able to pick up what you want to buy and then automatically be charged for your acquisitions on the way out the door. It is called Amazon go and is currently being tested in an employees-only store. Here is what it looks like:

And then of course Amazon has been experimenting with the last mile experience in grocery retailing for a while now with Amazon Fresh grocery delivery business in a few U.S. states along with London, Berlin, and Tokyo. Now they are also experimenting with a grocery pickup service. You can pickup your groceries in as little as 15 minutes after ordering. It’s available exclusively for Prime members in a testing phase beginning in Seattle.

Now, the past couple of weeks I’ve been noticing at one of my local Fred Meyer’s and one of the neighborhood QFC’s some workers doing some construction projects and I wasn’t sure exactly what they were up to, but today it became clear that they’ve been busy prepping for to enable Kroger ClickList at those locations, which is basically the same thing as AmazonFresh Pickup, EXCEPT that Kroger started doing this TWO YEARS AGO and scaled it to 500 locations in less than 17 months. If you’re curious, here is what Kroger CLickList looks like:

And yes, Walmart, not to be outdone, also has a grocery pickup service as well (which they started a little over a year ago).

For what it’s worth, if these companies were to combine this service with improved ready-to-eat meal offerings like we used to regularly utilize from Waitrose and Tesco so that people can pickup their groceries and a dinner they can eat right when they get home and this will really catch on. Now for those of you who haven’t experienced ready meals in the UK, then check out the following links to get a tastier idea:

— Waitrose Ready Meals
— Tesco Ready Meals

Waitrose Lasagne

So, Amazon is getting a lot of buzz around their Amazon Go and AmazonFresh Pickup experiments, but they are just that at this point. Meanwhile, Kroger and Walmart have already scaled some of these experiments, so who is the innovator here?

Just another reminder that anyone can innovate, that it is customer insight not technology that drives innovation, and that every company is a technology company whether they like it or not.

Keep innovating!

Innovation Audit from Braden Kelley

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