Issue #66: OpenAI Launches Integrated Checkout

I was traveling this weekend, so it will be a slightly abridged version of Retail Is Not Dead this week. However, the new OpenAI release of agentic commerce and subsequent partnerships was too exciting not to discuss, so I wanted to share my thoughts. What are your thoughts? Will you buy products via ChatGPT or other AI platforms? Let’s dive in!

OpenAI Launches Integrated Checkout

OpenAI, the maker of ChatGPT, has spent billions of dollars to get the top engineering talent to attempt to build the world’s best AI tools. The speed at which it deploys new features and advances existing ones is remarkable. So in early January, when OpenAI announced Operator, which allowed users to prompt the chatbot to do tasks within the browser for people (except not really with payments), I was waiting for the day when commerce within the ChatGPT browser would be possible. Ten months later, it is! I am surprised it took so long, but I think the delay was more due to the difficulty of changing customer behavior rather than a technical roadblock. For those unaware, last week, here is what the head of ChatGPT announced:

With this announcement, ChatGPT users were able to purchase from Etsy and Shopify stores, and shortly after Uber products too, all from right within ChatGPT. Many more websites are on the way too. So if you searched, show me a clay bowl, with some details, it would highlight options and enable purchase all within the platform. This commerce is all powered by a Acheckout, API, and Agentic Commerce Protocol co-developed by Stripe and OpenAI. That is some very exciting and novel purchasing opportunities for brands and retailers to consider, but like anything in retail has some interesting other aspects too.

A couple of thoughts in a ramble list form:

1. OpenAI already has the premium users’ credit card information, making the purchases super frictionless

2. Partnership Mindset - Instead of building everything in-house, OpenAI turned to trusted brands that have a broad reach. Etsy, Shopify, and Uber have millions of merchants that, with three integrations, OpenAI now has access to. Eventually, I am sure that the options surfaced will mostly be advertising-based, but at the start, it gives consumers a true reason to use the ChatGPT interface to purchase because these platforms have so many options

3. However, creating a new purchase behavior is challenging. Are people ready to purchase via chatbot? Not only, is it about whether they trust agentic commerce, but also…

4. Browsing!!!! In particular, Gen Z/Millenials and younger have shown an affinity for browsing, molded by the feed-based social media platforms. By switching to an AI agent or chatbot, it takes the fun out of browsing and shopping, so how will this contrast with the ease of agentic commerce?

5. Incremental vs cannibalization - For these platforms that decided to partner with OpenAI, I am making the assumption that these platforms either feel like they have to get on board before the world changes, or they feel like the purchase will be incremental, as it comes up in the chatbot. I think both are true for now, but who knows how long it will last?

For brands and retailers, an agentic commerce AI strategy is something that needs to be highly considered and has a plan for. Now that ChatGPT has commerce available and Stripe has the APIs public, all the platforms will rush to go live and compete as soon as possible. However, I am skeptical that this behavior is one that consumers will fully ever get behind, let alone for a while. I believe there are offshoots (browser extensions to check out for you, AI agents to surface a couple of options, etc.), but at the end of the day, I am slightly skeptical that this software will be the game-changer yet. I also believe this will impact individual brands more than specific retail brick and mortar stores, but regardless, I strongly believe everyone in the retail ecosystem needs to figure out some agentic commerce strategy, no matter how complicated or simple it is. I will be paying close attention to the partnerships that continue to unfold here, as well as the consumer response to them!

What do you think about this launch? Would you use an AI chatbot to check out? Please do not hesitate to reply!

Additional Links:

1. CPG valuations are down while all other industries are seeing valuations rise - maybe the right time to invest in CPG (read more here)

2. Gopuff announces partnership with The Trade Desk and Koddi to purchase Gopuff sponsored search retail media via The Trade Desk - the first retail media to be made available in The Trade Desk (read more here)

3. REI is closing its flagship location in the Soho neighborhood of Manhattan (read more here)

4. Square launches vendor procurement software within its platform after acquiring Zitto, a procurement startup for restaurants (read more here)

5. Confido, a trade management software, acquires Muffin to add additional data analytics features within its platform (read more here)

6. Levi’s floats doubling store count after strong earnings (read more here)

7. Consumers are planning on cutting non-gifting holiday spending (food, drinks, etc.) by at least 10% due to higher prices and inflation (read more here)

8. Many other platforms are announcing they will be featured on OpenAI’s ChatGPT (read more here)

9. Publix expands to northern Virginia, making this location is northernmost one (read more here)

10. Coca-Cola is launching its mini-can single serves in convenience stores (read more here)

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