How Microsoft Empowers Retail with Agentic AI

Retailers are relentlessly exploring new ways to enhance customer experiences and streamline day-to-day operations.

Microsoft’s latest portfolio of agentic AI solutions is engineered to drive intelligent automation across merchandising, marketing, store operations and fulfilment – prioritising speed, efficiency and customer relevance in an increasingly competitive, real-time market.

By embedding a unified layer of intelligence throughout the retail landscape, Microsoft is establishing the foundation for faster, smarter execution.

The company says its agentic AI capabilities empower teams to work with systems that understand context and act autonomously, advancing the retail industry toward a connected operating framework built on intelligence and agility.

Kathleen Mitford, Corporate Vice President of Global Industry at Microsoft, notes: “The retailers that thrive will be the ones that unify their business with intelligence that reaches every corner of the value chain.

"With Microsoft’s agentic AI, retailers can automate what slows them down and amplify what sets them apart, enabling faster decisions and stronger customer relationships while building operations ready for whatever comes next."

Agentic commerce meets seamless checkout

Consumer behaviour continues to shift as AI transforms e-commerce.

According to Adobe, AI-driven online traffic during the 2025 holiday season surged by 693% year over year, underscoring the demand for seamless checkout experiences that bridge product discovery and instant purchase.

To meet this need, Microsoft has introduced Copilot Checkout – a new capability that allows customers to complete purchases directly within Copilot, eliminating the need for redirection.

The feature turns shopping interactions into transactions without breaking the conversational flow, keeping retailers as the merchant of record while reducing friction along the way.

Copilot Checkout is now available in the US via Copilot.com, supported by trusted partners including PayPal, Shopify and Stripe.

Retailers such as Urban Outfitters, Anthropologie and Ashley Furniture are already live on the platform, joined by handmade and niche products from Etsy sellers.

“At Etsy, our job is to make it simple for people to discover the special things our sellers create," says Rafe Colburn, Chief Product and Technology Officer at Etsy.

"By bringing Etsy’s unique inventory to Copilot Checkout, we’re meeting buyers at the moment intent becomes action.

"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.”

Shopify merchants will be automatically enrolled in Copilot Checkout following a brief opt-out window, while those using PayPal or Stripe can apply to join immediately.

Mani Fazeli, VP of Product at Shopify, adds: “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.

"This is the modern power of agentic storefronts: personalisation and relevance, trust and accuracy, speed and convenience.”

Intelligent agents boost loyalty and conversions

To help retailers deliver more engaging digital experiences, Microsoft is launching two new agentic AI solutions: Brand Agents and a personalised shopping agent template.

Both are designed to bring natural, conversational commerce to retailers’ websites and mobile apps.

Brand Agents is a turnkey solution for Shopify retailers, trained on each brand’s product catalogue to answer queries and manage customer conversations in a tone that mirrors the brand’s identity and values.

With minimal setup required, it offers instant support for consistent, on-brand engagement.

For retailers seeking more customised experiences, the personalised shopping agent template – available through Copilot Studio – offers a flexible framework for real-time product discovery, outfit recommendations and contextual suggestions across channels.

It enables retailers to craft distinctive customer journeys that boost engagement while reducing returns.

Jenny Jidborn, IT Manager at Kappahl Group, says: “Microsoft’s personalised 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.

"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."

Microsoft’s agentic AI tools are built to help retailers take greater control of their operations, enhance customer service and automate routine tasks.

The company positions itself as a strategic partner, enabling retailers to thrive in a digital-first market while maintaining both brand identity and operational efficiency.