The rise of agentic commerce could shift retailers’ focus to products

ICYMI, everyone’s talking about agentic commerce.

And a big reason is because agentic commerce has the potential to completely change how consumers shop, from the products they buy to the retailers they buy from.

As more people turn to LLMs to shop, a focus on product assortment and innovation could be key for some retailers and brands to continue to land in shoppers’ carts, especially in a crowded retail segment like beauty.

“Competition is real, especially in this category,” Ulta Beauty CEO Kecia Steelman said on stage at NRF this year during her keynote session. And for Ulta, a strategy for edging out that competition in the age of AI is working with brands to create exclusive products or launching brands that are only sold at the retailer.

“We are really getting into Only at Ulta, which I think is going to be really important as you’ve been hearing a lot about agentic AI,” Steelman said. “The more that you can have that’s exclusive in your assortment, the more engaged the customer, the agent, or the guest is going to be coming into your specific brand.”

Could strategies like these be increasingly important in the age of agentic commerce?

Loyal pain: Loyalty has already been a pain point for retailers and brands as many cash-strapped shoppers have shifted their buying habits to make the most of their money. Agentic AI could present more challenges for retailers on that front.

“​​You could look at OpenAI and Google that now have created these global marketplaces—does the customer care where they get product X from?” Brett Leary, AI lead for Accenture, said.

Google’s Universal Commerce Protocol includes the ability for consumers to input loyalty information when shopping via LLMs, which is a good thing for retailers, Leary noted. But how loyal these shoppers remain to certain retailers and brands, versus searching only based on price or whether a product is in stock, could be something to keep an eye on.

Getting exclusive: Brand-building has been a particular focus of the Ulta Beauty Unleashed strategy, which includes “building and growing brands, and increasing the level of brands that are exclusive in our assortment,” CFO Paula Oyibo said in Ulta’s Q4 2024 earnings call.

Last year, Ulta debuted an “Only at Ulta” promotion to highlight its exclusive brand partnerships, including offering five times the points for loyalty consumers to buy its exclusive products. Recent Only at Ulta brands include Beyoncé’s Cécred—which is the company’s “No. 1 prestige hair care launch” in its history, per Chief Merchandising and Digital Officer Lauren Brindley, along with Shakira’s Isima haircare line. The retailer also has exclusivity with specific products, like a Blood Orange Spritz version of Ole Henriksen’s popular Pout Preserve lip treatment, and Tarte’s famous Shape Tape concealer.

The exclusivity strategy isn’t a new one, Julie Bornstein—who formerly led e-commerce at retailers like Sephora, Urban Outfitters, and Nordstrom, and is currently CEO and founder of AI-power fashion search platform Daydream—pointed out. Sephora has long been practicing the strategy, she noted. (Its website has an “Only at Sephora” tag, highlighting partnerships with brands like Rhode, Saie, Tower 28, Tatcha, Haus Labs, and One/Size). Selena Gomez’s Rare Beauty, too, was a Sephora exclusive, though it’s set to launch at Ulta next month. And in fashion, retailers like Revolve have been curating exclusive offerings.

“In a world where you can buy the product many places, having exclusive product or exclusive brands has always been really important,” Bornstein said. It’s been a mutually beneficial relationship: Brands get more investment and attention from the retailer, and the retailer gets consumers coming in just for that brand or product, she said.

“That strategy is certainly one of the things that will help multi-branded retailers in any category remain unique,” she said.

Circling back: At NRF, Shopify President Harley Finkelstein spoke to Gymshark CEO and Founder Ben Francis and Good American Co-founder Emma Grede about the importance of unique product offerings, like Good American’s size 15 jeans or Gymshark’s signature lifting products.

When we spoke to Finkelstein after the session, he predicted agentic commerce would give rise to “merit-based shopping,” a sort of leveled playing field for brands of all sizes. When we asked Finkelstein about Ulta’s exclusivity strategy and importance of differentiated products in the age of agentic commerce, he noted brands “won’t be able to lean on your balance sheet anymore.”

“I think a lot of companies lean on their balance sheet, meaning their product is mediocre, but they just overspend,” he said. “I think those days are over. I think you actually have to compete on value and merit of your product now.”