Retail is being reinvented as brands, retailers, and customers rethink both on-site and off-site experiences. With AI-native shopping and agentic systems scaling fast, new patterns are emerging.

At this year’s NRF—the retail industry’s big tent show—a featured session brought together Algolia, Microsoft, and the UK’s Frasers Group to explore how AI is reshaping retail. Algolia’s Bernadette Nixon hosted Jennifer Myers, Head of Strategic Partnerships for Microsoft Shopping and Copilot, and David Clark, the chief customer officer for Frasers Group. 

Search is changing

“In the 1950’s, shopkeepers got to know their customers through conversation,” notes David Clark. “Somebody would come through the door, and you’d talk. The concept of building agentic and conversational experiences with AI gives us the opportunity to build those kinds of relationships and that understanding at scale.”

But for many, that route to value isn’t clear yet. 

How can retailers use agentic AI to understand customers’ buying intent better and adapt to multi-modal shopping as disintermediation challenges traditional websites?

Microsoft’s Jennifer Myers reinforces the point from the user’s perspective. “My clients ask: ‘How can we get to know our customers in a much deeper way and think strategically about on-site experience as retailers or merchandisers? How do I get my products to show up in Copilot? How do I get ranked? Why wasn’t I ranked?’” 

Agentic AI—with its ability to automate tasks, improve customer journeys, and enable conversational interactions that drive conversions—is a critical component in this new paradigm, and one that Jennifer talks to retailers about daily.

Enter agentic ecommerce 

Previous strategies for driving ecommerce growth are no longer enough. Winning in an agentic world requires a fundamentally different strategy. Players in ecommerce retail are still figuring out the basics: how to find the right technologies and partners, how to measure success, and how consumers will ultimately adopt these new experiences.

“I think the current transition presents huge opportunities for businesses that are agile enough to react to changing consumer behavior,” notes David Clark. “And yes, the shift in the classic model of driving traffic to your on-site experience and converting is starting to shift and change. Nevertheless, Agentic opens up new and exciting possibilities!”

Context and nuance are essential. Ecommerce players want to know how to translate user online experiences into agentic experiences. At the same time, shifts in the consumer ecosystem and changes in consumer behavior generate risk and uncertainty, challenging business processes and undoing earlier approaches. 

Being agile and ready to pivot is critical. 

Differentiating and translating the online experience 

“For Algolia, the challenge is about building the technology foundations in partnership with commerce tools and providers such as Microsoft or Google,” says Bernadette Nixon. “It’s all about meeting that customer expectation around conversational agents.”

Clark and his retail team at Frasers Group view the challenge through two lenses. First, they use technology to develop a deep, detailed and augmented product data strategy. Then, they harness the possibilities offered by model context protocol (MCP) technology to enhance system capabilities and architecture, building a scaled content strategy that speaks to the brand and a range of audience segments.

“Bringing those two elements together is exciting,” notes Clark. “How do we create an experience where consumers start their discoverability journey off site? For us, the conversational intent must pass into our on-site experiences. That’s where the paradigm shift happens. Retailers must be ready for that critical step, shifting off-site conversations to conversions on their website.”

According to Microsoft’s Jennifer Myers, the consumer approach to search has become more complex and nuanced than ever before. “Users have higher expectations when it comes to conversing with the technology. When it comes to product discoverability, consumers are off-site in Copilot or ChatGPT and having rich conversations. But they have to click, refine their search and then go back to find the product site. It feels like a step back, one that doesn’t delight consumers in the way we would like.” 

Priorities and personalization  

Unifying the tech stack and generating organic visibility are extremely important. All three experts emphasize the critical value of meeting customer expectations around conversational interactions. At the same time, homogenization of the user experience is a concern when the discoverability journey relies solely on LLMs or AI agents without the addition of semantically rich information.

The experts have been working collaboratively to develop innovative solutions. “We are very excited to be collaborating with Algolia,” says Jennifer Myers. “Things are changing constantly. It’s all about solving for the short term while also planning more strategically for the long term. Ultimately, the focus is on data. That is my answer to how brands should get ready to show up.”

David Clark emphasizes the importance of building memory. “It’s like that shopkeeper I talked about earlier. It isn’t just user history based on clicks and impressions; it’s conversations over time that build a picture of who that customer is and how we can influence the purchase journey. I believe memory will deliver on the promise of personalization.”

A common problem is that even after customers enrich their catalogs, those catalogs are rarely filled with semantically rich information critical to enabling effective personalization and strong usability. 

Additionally, as technology stacks evolve, organizations often end up with a fragmented “Frankenstein” architecture that includes search and browse, conversational experiences, and agentic capabilities operating behind the scenes. When not managed carefully, this fragmentation can lead to a broken customer journey, something seen repeatedly in practice. 

Transforming the shopping journey

In the US alone 61% of online shoppers now use AI at some point in their buying journey. Fast forward to 2030 and more than $3.5 trillion of goods and services will be bought online with the assistance of Agentic powered AI.

Ultimately, success depends on unifying the technology stack and establishing a strong, cohesive foundation. As Algolia’s Bernadette Nixon points out, “it’s all about unifying the tech stack and reinventing the retail experience for shoppers who are or will soon be AI native.”

To see Algolia AI Search or Agent Studio in action, request a demo here.