Microsoft Advances Retail Automation With Agentic AI
Microsoft is advancing its retail strategy with agentic AI solutions that deliver intelligent automation across the industry. These new tools help retailers improve efficiency and serve shoppers more effectively, offering a foundation for growth in a competitive market.
Integrating checkout and commerce into conversational interfaces
AI is significantly changing how consumers shop for gifts. According to the report, AI-driven ecommerce traffic for the 2025 holiday season surged by 693% compared to 2024. This increase highlights the importance of connecting brand engagement with a frictionless checkout process to capture value at the exact moment of intent.
Copilot Checkout enables merchants to reach shoppers as they complete purchases discovered directly within Copilot without being redirected to external sites. The feature turns conversations into conversions instantly. No redirect, no friction, and merchants stay the merchant of record. Copilot Checkout is now available in the U.S. on Copilot.com. Trusted partners enabling this experience include PayPal, Shopify and Stripe. Shoppers will be able to purchase from leading retail brands such as Urban Outfitters, Anthropologie and Ashley Furniture, and discover unique and handmade items from Etsy sellers with many more joining soon.
“At Etsy, our job is to make it simple for people to discover the special things our sellers create. By bringing Etsy’s unique inventory to Copilot Checkout, we’re meeting buyers at the moment intent becomes action,” said Rafe Colburn, Chief Product and Technology Officer at Etsy. “With one integration, we open the door for our sellers to show up across new surfaces without extra work. It’s a straightforward way to connect their creativity to high-intent buyers — and to keep commerce human as shopping evolves.”
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Shopify merchants will automatically be enrolled in Copilot Checkout following an opt-out window. “Copilot Checkout can move a customer from intent to transaction in seconds, all without leaving the conversation. It’s the merchant’s checkout powered by Shopify, seamlessly fitting into the customer’s experience,” said Mani Fazeli, VP of Product at Shopify. “This is the modern power of Agentic Storefronts: personalization and relevance, trust and accuracy, speed and convenience.”
Driving loyalty through conversational shopping agents
Microsoft is introducing two solutions that bring agentic commerce to life across the digital experiences retailers own: Brand Agents, now available for merchants on the Shopify platform, and the personalized shopping agent template in Copilot Studio. Both enable personalized, conversational shopping experiences, helping retailers guide customers, boost engagement and drive conversions.
Brand Agents is a turnkey solution for brands to bring their authentic voice into every digital interaction on their website. Trained on a brand’s product catalog, it answers detailed product questions, engages shoppers in natural, brand-aligned conversations, and is ready for Shopify customers to deploy with minimal setup.
The personalized shopping agent template provides a fully customizable framework for retailers wanting to tailor experiences more deeply. In addition to real-time, context-aware product discovery and recommendations across web, mobile and in-store experiences, it includes advanced capabilities such as outfit building and more, giving retailers flexibility to craft unique engaging shopping journeys.
“Microsoft’s personalized shopping agent template gives us a flexible foundation to explore AI-powered guidance in a way that fits our brands, improves the customer experience and helps customers get inspired,” said Jenny Jidborn, IT Manager at Kappahl Group. “It supports our ambition to improve conversion while also reducing returns through better decision support at the product level — ultimately helping customers feel more confident and satisfied with their choices.”
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Smarter discovery through catalog enrichment
Microsoft is also launching in public preview the catalog enrichment agent template in Copilot Studio, an intelligent assistant that extracts product attributes from images, enriches them with social insights, and automates catalog tasks such as product onboarding, categorization and error resolution. Serving as a foundation for agentic commerce and a new lever for merchants, this customizable template transforms product data into enriched, structured data that fuels discovery, recommendations and hyper-personalized shopping experiences across channels.
“With Microsoft’s catalog enrichment agent template forming the backbone of our personalized shopping experiences, we can turn product details into meaningful insights that help shoppers discover styles in real time, receive tailored recommendations and explore complete looks,” said David Torrecilla, Head of Innovation at Guess. “It’s a powerful step forward in our commitment to delivering service that’s as dynamic as our brand.”
Retailers continue to grapple with high turnover and a shortage of skilled frontline staff. Many employees lack access to digital tools that could help them serve customers more effectively and efficiently. Microsoft’s new agentic AI solution is designed to change that by empowering employees with intuitive, on-demand assistance.
The store operations agent template in Copilot Studio, now in public preview, empowers store leaders and associates with a natural language interface for quick answers on inventory availability and store policies, while autonomously orchestrating workflows, flagging exceptions and recommending next best actions. By analyzing internal signals like sales trends and foot traffic alongside external factors such as weather, local events and holidays, it delivers contextual recommendations for staffing, KPIs and operational priorities. The intelligent agent helps leaders make smarter, faster decisions.
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“With the store operations agent template, we’re advancing our AI strategy by enabling teams to act on live store insights,” said John Khoury, Group CTO at Strandbags. “The flexibility to shape the agent around our specific needs ensures our teams can focus on delivering exceptional service while we stay ahead in a fast-moving retail world.”
They are committed to helping retailers succeed in this competitive market.
Microsoft’s agentic AI solutions are designed to help retailers improve efficiency and serve shoppers more effectively.
These solutions are available now.
