By Steve Merrill | March 24, 2026

Sephora and Shopify Are Both Doubling Down on Agentic Commerce, Here's What Small Merchants Should Copy

When both a $10B beauty retailer and the platform that powers 2 million merchants make the same bet simultaneously, that's a signal worth paying attention to. Here's what Sephora and Shopify are actually doing, and what the playbook looks like when you can't afford a dedicated agentic commerce team.

What Did Sephora and Shopify Both Announce About Agentic Commerce?

On March 25, Forbes reported that "both Sephora and Shopify double down on agentic commerce", with Sephora launching a dedicated agentic commerce experience and Shopify continuing to expand its AI infrastructure for merchant product discovery through the ChatGPT catalog integration and new Agentic Commerce Protocol support.

The timing is deliberate. Both companies watched OpenAI's Instant Checkout stumble, saw the pivot toward AI-driven discovery, and moved quickly to position their products on the winning side of that shift. Sephora built a controlled in-chat experience that keeps customers in its ecosystem while still using AI for recommendations. Shopify doubled down on the catalog infrastructure that gives its merchants a structural data advantage over non-Shopify competitors.

The lesson for smaller merchants isn't to replicate either move exactly. It's to understand what they're protecting: customer relationships and checkout ownership. Both companies are investing in AI-powered discovery while keeping control of the transaction.

What Is Sephora's Agentic Commerce Play and Why Does It Matter?

Sephora's approach is brand-controlled AI discovery. Instead of letting ChatGPT recommend any product from any retailer, Sephora builds its own AI recommendation layer that surfaces Sephora products through conversational interfaces. The Forbes piece noted this means "brands are able to gatekeep their customers and control the checkout process, a big win versus some of the concerns agentic commerce brought when first introduced."

This is a smart defensive move for large retailers with strong brand equity. It lets them offer AI-powered discovery without surrendering customer data or checkout to a third-party AI platform. The tradeoff is that it requires significant investment, Sephora has the engineering resources and brand pull to make this work. A $2M DTC skincare brand doesn't.

What independent Shopify merchants can take from this is the principle, not the implementation. The goal is to use AI platforms for discovery while keeping the checkout relationship on your side. That's exactly what the Shopify/ChatGPT discovery model enables, ChatGPT surfaces your products, the shopper comes to your site to buy.

What Is Shopify's Agentic Commerce Infrastructure Investment?

Shopify has been building toward this for over a year. Tools like Sidekick (Shopify's merchant-facing AI assistant), the Shopify Catalog integration with ChatGPT, and the new support for the Agentic Commerce Protocol are all part of a deliberate infrastructure play.

As MarketingProfs reported in their March 20 AI update, "Shopify is developing tools such as Sidekick and new protocols to support agent interactions with merchant data. The shift could expand online retail and improve product discovery, especially for smaller brands."

That last part is the main point: "especially for smaller brands." The big retailers have teams building custom AI integrations. Shopify is building the infrastructure so that a solo founder running a $500K Shopify store gets the same AI discovery pipeline as a major retailer, automatically, through the catalog. That's genuinely useful, but only if you have the product data to take advantage of it.

What Can Small and Mid-Size Shopify Merchants Actually Do Right Now?

The gap between what Sephora is doing and what a typical Shopify merchant can do is large in execution but small in principle. Here's the practical version:

Control your discovery narrative. Sephora controls what AI recommends by owning its own discovery layer. You can influence this by controlling what's in your product data. Specific titles, entity-rich descriptions, complete attribute data, and accurate schema markup all shape how AI platforms position your products. You don't get to veto competitors from appearing, though you can make your products the clearest, most complete answer to the queries you want to win.

Own your checkout relationship. Don't try to enable complex in-chat purchasing. Make sure that every AI platform that discovers your product links back to your product page, where you own the customer relationship. This is the Shopify/ChatGPT discovery model, and it's the right one for merchants who aren't building their own AI assistant infrastructure.

Make your brand findable by AI on your own terms. Create content that answers the questions your customers ask AI assistants. Blog posts, buying guides, and comparison content that targets conversational queries expand your AI surface area beyond just product listings. Sephora has editorial content teams doing this at scale. A Shopify merchant with 10 well-targeted blog posts can achieve meaningful AI visibility in their niche.

Act before your category gets competitive. This is the Facebook Ads lesson all over again. The merchants who get their AI visibility infrastructure in place before the window closes won't be able to be caught up with later. The compounding advantage of being established in AI discovery when it becomes the primary channel is significant.

What Does the Sephora Model Tell Us About Where AI Commerce Is Heading?

The direction is clear. AI platforms are becoming the discovery layer for commerce. Brands are building controlled experiences that use AI for recommendation while keeping transaction on their side. The checkout step remains with the merchant, at least for now.

What's less certain is how long the organic, free-placement period lasts in AI shopping. Google Shopping started as organic placement, then added paid. The same pattern almost certainly plays out in ChatGPT shopping. Merchants who are established in AI discovery before paid placement arrives will have organic authority that's harder to displace, same dynamic as organic SEO vs. paid search.

Sephora and Shopify's simultaneous doubling down isn't a coincidence. They both see the same thing: AI-driven product discovery is moving from "interesting experiment" to "primary shopping channel" faster than most merchants realize.

Frequently Asked Questions

Q: Can a small Shopify merchant realistically compete with Sephora's agentic commerce setup?
A: On the direct-AI-assistant level, no, Sephora has resources that independent merchants don't. But in niche product categories, a small merchant with excellent product data can outperform large retailers in AI discovery because specificity wins. A merchant selling natural fiber athletic wear to specific use cases can out-rank large retailers for those specific queries if their data is better.

Q: Is Shopify's AI infrastructure investment exclusive to enterprise merchants?
A: No. The Shopify Catalog integration with ChatGPT is available to all Shopify merchants, including those on basic plans. The infrastructure is democratic by design, Shopify's commercial interest is in making all its merchants more successful in AI-driven commerce.

Q: Should I be concerned that large retailers will crowd out small merchants in AI discovery?
A: Somewhat, in broad categories. A small merchant selling generic electronics will struggle to compete with Best Buy or Amazon in ChatGPT shopping for head terms. But niche merchants with specific products, strong brand identity, and excellent product data can be very competitive in their specific category. AI systems reward relevance over brand size for specific queries.

Q: How does Shopify Sidekick relate to agentic commerce for merchants?
A: Sidekick is Shopify's merchant-facing AI tool, it helps you run your store more efficiently. The agentic commerce infrastructure is the customer-facing layer where AI platforms discover and recommend your products. They serve different purposes: Sidekick is your internal operator; the catalog integration is your external discoverability.

Q: What's the single most important thing a small merchant should do this week to position for agentic commerce?
A: Audit your top 20 products for data completeness. Check every product has a specific title, complete description with use-case framing, entity-rich attributes, high-quality images, and product schema markup. That work affects your visibility in every AI discovery platform, not just ChatGPT.

Enterprise moves by Sephora and Shopify confirm the direction: AI-driven discovery is the next main channel. The merchants who build their AI visibility infrastructure now, before it gets crowded and commoditized, will compound away from those who wait.

Not sure where your Shopify store stands for AI discovery? Start with WRKNG Digital's AI Commerce readiness assessment and find out exactly what AI platforms see when they look at your store.