When I talk to small retailers about AI, the question I hear most is: “Is this actually going to change how people shop, or is it just hype?”
Two recent moves from Walmart and Gap give us a very real, very practical answer: it’s changing—but not in the way most people expected.
Let’s start with Walmart. According to a recent article in Inc., the company partnered with OpenAI to bring shopping directly into ChatGPT, which sounds like a breakthrough moment. But the early results weren’t great. Conversion rates in ChatGPT were reportedly three times lower than on Walmart’s own website, largely because customers found the experience lacking .
That’s a big signal. It tells me that just dropping your products into an AI interface doesn’t magically improve sales. In fact, it can make things worse if the experience isn’t tightly controlled.
Walmart’s response is what really matters. Instead of pulling back, they’re doubling down—but with a twist. They’re embedding their own AI assistant, “Sparky,” into the experience so they can maintain control over personalization, product data, and the overall journey . In other words, they’ve realized something small retailers should pay attention to: AI is a channel, not a replacement for your storefront.
Gap is taking a different, but equally interesting approach, says CNBC. They’re leaning into what I’d call agentic commerce—letting customers discover and buy products directly inside AI platforms like Google Gemini. Through something they call a “universal commerce protocol,” Gap ensures its products show up when users ask natural-language questions like “What should I wear in Key West?”
What’s clever here is that Gap is controlling the data behind the experience. When a user clicks a product, Gap powers the listing and handles fulfillment, even though the transaction happens inside Gemini. That’s a subtle but important distinction: they’re meeting customers where they are without giving up ownership of the relationship.
They’re also tackling a very practical problem with AI: returns. Gap is rolling out AI-powered sizing tools that recommend fit based on user input. If you’ve ever run a small retail operation, you know returns eat margins alive. This is one of the first AI use cases I’ve seen that directly improves both customer experience and profitability.
So what do I tell small retailers when I look at these two strategies side by side?
- First, don’t assume AI will instantly boost conversions. Walmart’s early results are a reality check. If the experience feels generic, slow, or incomplete, customers won’t trust it enough to buy.
- Second, control your data. Gap’s approach works because their product data is structured, accessible, and optimized for AI discovery. If your catalog isn’t clean, searchable, and machine-readable, you simply won’t show up in these new interfaces.
- Third, think beyond your website. One of the biggest shifts here is that shopping is no longer confined to your storefront. It can start in a chatbot, a search query, or a recommendation engine. As Walmart put it, “shopping can start anywhere” . That’s a fundamental change.
Now, here’s the part most small retailers get wrong: they assume they need to build something like Walmart’s “Sparky” to participate. You don’t.
A practical way to experiment with AI today is more accessible than most retailers expect—but it still requires some thoughtful setup behind the scenes. In general, it starts with getting your product data into a format that AI systems can actually understand and use, and then connecting that data to tools that can interpret customer intent and surface relevant products. Many modern commerce platforms already offer entry points into this, while more customized approaches can extend those capabilities further.
What I’ve seen in practice is that even simple prototypes—where an AI can respond to natural-language shopping queries using your catalog—can quickly reveal both opportunities and gaps. But getting that experience to feel seamless, accurate, and on-brand is where things become more nuanced. This is often the point where it makes sense to bring in someone who understands both the technical side and the customer experience, to help translate your storefront into something AI can work with effectively.
The key is not to build a perfect assistant—it’s to make your data usable by AI systems and test how customers respond.
But you still need to own the experience. Both Walmart and Gap are clearly trying to avoid becoming invisible middlemen behind someone else’s AI. That’s the tightrope: be present in AI platforms without becoming dependent on them.
Finally, don’t ignore trust. Gap is already seeing concerns around privacy, payments, and how AI uses personal data. This is especially important for smaller brands that don’t have the built-in credibility of a Walmart or Google partnership. If customers don’t trust the experience, they won’t convert, no matter how smart the AI is.
My takeaway? AI shopping is real, but it’s still early. The winners won’t be the companies that adopt AI the fastest. They’ll be the ones that integrate it thoughtfully into their data, their workflows, and their customer experience.
If you’re a small retailer, you don’t need to build your own “Sparky.” But you do need to start preparing your business for a world where your next customer might discover—and buy from you—without ever visiting your website.