The source of an order for a cotton long T-shirt was listed as ChatGPT on his Shopify dashboard, the Canadian e-commerce platform he uses to build and run his online store.
Hoel shrugged it off at the time. It wasn’t until a few weeks ago when he checked again that he realized the ChatGPT reference wasn’t an anomaly. Over the past six months, Shopify has attributed more than 50 orders to its generative artificial intelligence platform, which reportedly brought customers to Hoel’s website. ChatGPT has since become its sixth largest source of referral traffic, with a conversion rate five times higher than the average of all traffic sources.
“It was really surprising to me because I didn’t put any effort into it at all. I’m in a very, very niche market,” says Hoel, 62, who founded his brand Have It Tall in the US around 2018 after spotting a gap in the fashion market for taller consumers.
Many retail analysts say 2025 is Canada’s first truly AI-powered holiday season. A KPMG survey of 1,200 Canadians in November found that 78 percent of shoppers plan to use artificial intelligence tools to guide their holiday shopping this season.
Canadian e-commerce software provider Shopify reported in November that traffic from AI tools to its merchants’ online stores has increased sevenfold since January, while purchases related to AI-driven search have increased elevenfold.
Although Hoel had no idea why his products were recommended by the ChatGPT, he wonders what possibilities this brand new sales channel could unlock for his brand.
“This is the smallest the market will ever be. It’s only going to go up from here. This is just the beginning,” he said.
Shopify struck a deal with ChatGPT in the fall for the AI company’s debut shopping feature, Instant Checkout, which allows users to purchase products directly from Shopify without leaving the ChatGPT site (the feature is now exclusive to US users, with plans to expand to other regions over time). Walmart and Etsy have also joined the rollout.
Some industry experts told the Star they applaud Shopify’s move to keep its merchants competitive and relevant as retailers enter a new era where consumers are quickly turning to AI for shopping.
“This will be the future,” says Fatih Nayebi, an associate professor of information systems at McGill University and founder of an AI startup for retailers. “It’s already happening.”
But experts also noted that despite the enthusiasm for AI, Canadians remain cautious about letting it influence their shopping decisions due to concerns about privacy and the way AI recommendations are generated.
Have vendors influenced AI search?
In September, Shopify painted a picture of the future of shopping when it unveiled its partnership with ChatGPT, which accounts for about 82 percent of the AI chatbot market. In this new market, shopping happens not just through searches or ads, but within AI conversations, with sellers appearing ‘naturally’ in recommendations and purchases made without leaving the chat.
“Our goal is always to keep merchants at the forefront by default,” said Vanessa Lee, VP of Product at Shopify. “As we expand, sellers will discover new ways to sell automatically while still putting their brand and customer relationships first.”
The announcement raises an important question for consumers: Will retailers be able to influence which products the AI recommends?
OpenAI, the developer of ChatGPT, said in a statement that it does not support sponsored ranking or paid influence.
The AI company collects a nominal transaction fee from merchants selling on ChatGPT, while Shopify itself does not charge any fees to its merchants.
However, with OpenAI, valued at $500 billion (USD), still unprofitable and incurring staggering costs, Nayebi says the company will have to explore ways to generate revenue, such as increasing subscription fees or offering paid advertising for brands.
Nayebi is optimistic about the advantages chatbots offer over traditional online shopping, pointing to their ability to provide personalized recommendations and quickly gather information from a wide range of sites.
OpenAI said its AI shopping research is based on a wide range of publicly available retailers and reviews, weighing factors such as specifications, price, availability and quality signals to make clear comparisons.
“The first and most important thing is that the users can specify their own preferences, and ChatGPT is going to understand their history, their preferences and their context, and it will remember that,” Nayebi said. “Any recommendation will be based on your preferences.”
What it takes for companies to be seen in an AI era
It’s been two months since Rick Klouwenberg, who runs an e-commerce jewelry store on Shopify from the Netherlands, first realized that customers were discovering his business through AI.
A customer emailed him after finding his store by asking ChatGPT to search for cheap Moissanite jewelry. She wanted more information about the size and quality of a ring and later placed an order for $80 (USD).
“It was very surprising and kind of amazing, to be honest,” said Klouwenberg, who later used the same prompt to ask ChatGPT and found his products were recommended in the chat.
Klouwenberg said he believes his product names are simple but well-described, and therefore likely match what people are looking for on ChatGPT.
Carl Boutet, chief strategist at Montreal-based retail consultancy Studio RX, told the Star that much is still unknown about how AI chatbots rank products, and that retailers are currently trying to figure out how to optimize their presence on AI-powered platforms.
“It’s a black box,” Boutet said. “By design, these algorithms are very complex and difficult to understand how they arrive at the recommendations they make.”
Chatbots are known to search for authentic reviews on platforms like Reddit, prompting some companies to strategically embed information on the topic-based social media platform in an effort to influence the AI, Boutet said.
When asked by the Star how merchants can increase their visibility within ChatGPT, OpenAI said the chatbot uses a web crawler called OAI-SearchBot to access information, and that companies should ensure their websites don’t block it.
Shopify launched “Agentic Storefronts” on December 10, allowing merchants to set themselves up to be discovered “instantly and accurately” in AI conversations, catalog products with correct descriptions, and prepare answers to questions customers might ask AI.
Nayebi said AI chatbots favor websites that load quickly and provide clear product information, including return policies and store details.
Retailers who prioritize this, he added, are likely to outpace their competitors in the era of AI-driven e-commerce.
Can we trust AI to do our shopping?
Although Klouwenberg’s jewelry store has already been recommended by ChatGPT, the 20-year-old entrepreneur said he remains skeptical that the AI chatbot could actually boost sales for his business.
“I don’t think people will actually trust (the AI recommendations) because ChatGPT can still give you false information. People would be a little hesitant to buy through ChatGPT,” he said.
Bruce Winder, a retail analyst, told the Star that Canadian consumers are using AI much more this year to search, discover and compare products, but not necessarily to make purchases, as concerns remain about the criteria AI uses to select products and the sharing of credit card information.
“The biggest challenge they face is the accuracy issue and trust, because citizens don’t necessarily trust AI that much,” he said.
While many customers are familiar with the chatbot side of AI for searching for products and comparing prices, Nayebi said some companies, including ChatGPT, have rolled out “agentic AI” mode that autonomously chooses products, adds them to the cart and pays using the user’s login credentials – in some cases requiring only a final confirmation at checkout.
According to KPMG’s research, agentic AI has sparked interest among Canadians, but 78 percent are concerned about the privacy of their personal data, 72 percent find shopping based on agentic AI impersonal and 86 percent want to approve every step before an AI agent takes action.
Nayebi, who wrote the book Foundations of Agentic AI for Retail, said he believes Canadians will become more comfortable with the new technology. But he worries that Canada could miss out on a significant economic boost if retailers and consumers don’t ramp up their adoption of artificial AI.
Boutet said agentic AI could make shopping more seamless by eliminating steps that add little value, but it could also push people to buy items they didn’t intend to simply because it’s so easy.
“I don’t think we’re anywhere close to being done before people can fully complete their purchases and have an agent plan their trip to Paris and buy their kids’ hockey equipment,” Boutet said.
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