Microsoft Retail AI Push Includes Checkout in Copilot, Agents That Improve Customer Experience

Microsoft used this week’s major retail industry gathering to roll out AI products that streamline purchases, answer brand-specific product questions, and enhance retail experiences and operations.

The announcements at the National Retail Federation show included:

• Copilot Checkout for purchasing products discovered within Copilot
• Brand Agents that engage shoppers in brand-specific conversations
• AI agents for product discovery, retail catalog optimization, and efficient store operations

Ronak Mathur, Agent and Copilot analyst and AI expert, said these developments show Microsoft is significantly advancing a concept he calls the “zero-wait enterprise,” whereby agents eliminate business and operational delays by keeping processes flowing automatically, in line with a quick-commerce model. Mathur is Manager D365, Power Platform & Automation, Mater Hospital.

Here are more details on how Microsoft is advancing toward “zero wait” functionality through each of the three products and categories listed above.  

Copilot Checkout

Copilot Checkout lets merchants engage with shoppers and complete transactions with products discovered directly within Copilot. It eliminates any need to be redirected to external sites, and merchants that utilize Copilot Checkout remain the merchant of record.

Microsoft is working with major e-commerce partners including PayPal, Shopify, and Stripe to enable this functionality. Retailers that have already partnered with Microsoft to utilize Copilot Checkout include Etsy, Urban Outfitters, and Anthropologie.

An Etsy executive noted that Copilot Checkout gives broader exposure to its sellers and eliminates transactional friction. “It’s a straightforward way to connect their creativity to high intent buyers – and keep commerce human as shopping evolves,” said Rafe Colburn, Chief Product and Technology Officer at Etsy.

Microsoft positions Copilot Checkout as an enabler of “conversations that convert.”

Copilot Checkout adds momentum to AI-powered retail transactions: WalMart. Shopify, and Etsy previously said they’re working with OpenAI to enable an integrated ChatGPT-web shopping experience. WalMart went a step further this week, striking a similar relationship for online transactions via Google Gemini.

Agents With Brand Voice

Brand Agents, now available for merchants on Shopify, help retailers guide customers through product discussions in the brand’s own voice, while driving conversions.

They’re trained on a brand’s product catalog in order to address detailed product questions and engage shoppers in brand-aligned conversations. This, according to Mathur, means that “Customer questions don’t sit in queues, interactions don’t stall, and work keeps moving behind the scenes.”

Personalized Shopping, Catalog Optimization

Among the other new agents that Microsoft introduced, the Shopping Agent aligns closely with Brand Agents; both focus squarely on personalizing the shopping experience. The Shopping Agent is designed to function as a digital associate that’s available across retail channels, delivering natural language product discovery in a similar way to a human store associate.

The Shopping Agent will ask clarifying questions in order to make informed recommendations to the customer based on a conversation. Retailers are able to tune the agent’s voice, language, and style in keeping with their brand identity.

The agent can pull data from multiple systems to provide cross-sell and upsell options, financing suggestions, and even in-home service recommendations. One early customer is Ralph Lauren, which is using the Shopping Agent to power a virtual stylist.

A new Catalog Enrichment Agent automatically cleans and standardizes product information while integrating into Microsoft platforms including Teams and Microsoft 365 Copilot Chat; in those platforms, merchandisers can review flagged items, approve updates, and respond to notifications as product offerings evolve.

Catalog enrichment addresses the challenges retailers face in modernizing and enriching product descriptions while improving accuracy and relevance of conversational search results.  

The agent can ingest product details from images, PDFs, structured tables, or unstructured documents to generate catalog items tailored to the retailer’s brand and taxonomy.

Finally, the new Store Operations Agent utilizes external factors and data – weather, events, seasonality – to make operational recommendations for stores; those recommendations can be approved or refined by store managers. The agent will orchestrate execution of the recommendations through Microsoft Teams Planner, which creates and assigns tasks as needed while connecting to inventory, shipping, workforce planning, and other related systems.

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