Shopify President on 'Merit-Based Shopping' - How AI Agents Are Democratizing Retail

Shopify President Says 'Merit-Based Shopping' Will Level the Playing Field

Shopify president: Agentic commerce could usher in 'merit-based shopping'

AI agent-based shopping could increase e-commerce penetration and ultimately 'level the playing field' for brands, Harley Finkelstein told Retail Brew.

On January 16, 2026, Shopify President Harley Finkelstein spoke at the National Retail Federation (NRF) annual conference about how AI agent-powered shopping will usher in an era of "merit-based shopping." This represents a new retail paradigm where consumers discover products based on quality and relevance rather than advertising investment.

Finkelstein revealed that orders via AI agents to Shopify stores have increased 14x over the past 12 months, noting that "the base is still small, but it's growing rapidly."

Background and Industry Trends

The Emergence of Universal Commerce Protocol (UCP)

At NRF, Google announced a new open standard called "Universal Commerce Protocol (UCP)." Co-developed with Shopify, Walmart, and Target, this protocol connects AI agents with retailers. Over 20 companies have already expressed support, including Etsy, Wayfair, Home Depot, Best Buy, Macy's, Mastercard, and Visa.

With UCP, consumers can complete entire purchasing journeys within AI platforms—applying discount codes, entering loyalty information, and purchasing subscriptions.

Rapid Growth of Agentic Commerce

Industry-wide attention on agentic commerce is intensifying. According to Morgan Stanley estimates, agentic shoppers could account for 10-20% of the U.S. e-commerce market (up to $385 billion) by 2030. Adobe reports that AI-driven retail traffic increased 693% year-over-year during the 2025 holiday season, and this rapid growth is expected to continue.

What is 'Merit-Based' - The Shift from Ad Spend to Product Quality

How It Differs from Traditional Advertising

Finkelstein explained the concept of "merit-based shopping" using designer Tom Sachs as an example. Tom Sachs collaborates with Nike on the NikeCraft sneaker line but doesn't invest in large advertising budgets or SEO optimization.

With traditional search advertising and sponsored placements, niche brands like this had limited opportunities to reach consumers. However, AI agents understand user preferences—such as a love for limited edition items, interest in design and architecture, or affinity for brands like Kith and Supreme—and recommend the most suitable products accordingly.

Democratization of Competition

"Search results on agents are merit-based, not ad-based. It's not about who paid more money—it's about merit. This is democracy, and it levels the playing field," Finkelstein stated.

This change represents an opportunity for small and medium-sized brands and DTC brands with limited marketing budgets to compete on equal footing with major corporations.

Major Platform Developments

Shopify's Strategy

Shopify is advancing partnerships with multiple AI platforms:

• Google Integration: Direct sales within Google Search AI mode and the Gemini app coming soon
• Microsoft Integration: Copilot Checkout feature enables purchase completion within Microsoft Copilot
• ChatGPT Integration: Continuing integration through Agentic Storefronts

Additionally, Shopify announced an "Agentic Plan" that allows brands using other platforms to access the Shopify Catalog, enabling brands without their own online stores to sell through AI channels.

Competitor Movements

Competition for shopping dominance in the AI era is intensifying:

• Amazon: Expanding Rufus with auto-buy capabilities while blocking external agents from its site—a strategy to protect its $56 billion advertising business
• OpenAI: Integrating payment functionality into ChatGPT and partnering with Target, Instacart, DoorDash, and others
• Perplexity: Launched shopping agents in November 2024

Impact and Applications for E-commerce Businesses

Immediate Actions Required

Finkelstein recommends the following responses for e-commerce businesses:

1. Optimize Product Catalogs: Improve data accuracy to ensure products are properly indexed and syndicated by AI agents
2. Verify UCP Compliance: Confirm that necessary information for each product is included in the protocol
3. Assign Dedicated Resources: Consider securing dedicated personnel to monitor and optimize these new distribution channels

The Importance of Building Trust

Challenges remain, however. According to eMarketer research, only 46% of consumers fully trust AI recommendations, and 89% verify information before purchasing. Widespread adoption of agentic commerce requires gaining consumer trust.

E-commerce businesses need to focus not only on being discovered via AI but also on providing reliable information that supports final purchase decisions.

Conclusion

Shopify's president's statements indicate that e-commerce has reached a new turning point. In an era where AI agents mediate consumer purchasing behavior, brand discovery will be determined by product merit rather than advertising budgets.

Finkelstein predicts that "2026 will be the year commerce breaks the sound barrier." Just as breaking the sound barrier eliminates resistance and dramatically accelerates speed, the proliferation of AI agents could significantly boost e-commerce penetration rates.

For e-commerce businesses, this change represents an opportunity rather than a threat. Optimizing product data, adapting to UCP, and building strategies suited for the AI agent era will determine future competitiveness.