One day in May, Steven Hoel, a Los Angeles–based entrepreneur who runs a clothing brand for tall people, was reviewing incoming orders when something odd caught his eye.
The source of an order for a cotton tall T‑shirt was listed as ChatGPT on his Shopify dashboard, the Canadian e-commerce platform he uses to build and run his online store.
Hoel shrugged it off at the time. It wasn’t until a few weeks ago, when he checked again, that he realized the ChatGPT reference wasn’t an anomaly. Over the past six months, Shopify has attributed more than 50 orders to the generative artificial intelligence platform, which is believed to have brought customers to Hoel’s website. ChatGPT has since become his sixth-largest source of referral traffic, with a conversion rate five times higher than the average across all traffic sources.
“It was really surprising to me, because I made zero effort for it. I’m in a very, very niche market,” said Hoel, 62, who started his brand Have It Tall in the U.S. around 2018 after spotting a gap in the fashion market for taller consumers.
Many retail analysts say 2025 is Canada’s first truly AI-powered holiday season. A KPMG survey of 1,200 Canadians conducted in November found that 78 per cent of shoppers plan to use artificial intelligence tools to guide their holiday shopping this season.
The Canadian e-commerce software provider Shopify reported in November that traffic from AI tools to its merchants’ online stores has jumped sevenfold since January, while purchases tied to AI-powered search have risen elevenfold.
While Hoel had no idea why his products were being recommended by the ChatGPT, he wonders what possibilities this brand-new sales channel could unlock for his brand.
“This is the smallest that the market will ever be. It’s only going to go up from here. This is just getting started,” he said.
Shopify struck a deal with ChatGPT in the fall for the AI company’s debut shopping feature, Instant Checkout, which allows users to purchase products from Shopify directly without leaving the ChatGPT site (The feature is now exclusive to U.S. users, with plans to expand to other regions over time). Walmart and Etsy have also joined the rollout.
Some industry experts told the Star they applaud Shopify’s move to keep its merchants competitive and relevant as retailers enter a new era where consumers are rapidly turning to AI for shopping.
“This is going to be the future,” said Fatih Nayebi, an associate professor of information systems at McGill University and the founder of an AI start-up for retailers. “It’s already happening.”
But experts also noted that despite the enthusiasm for AI, Canadians remain cautious about letting it shape their shopping decisions due to concerns about privacy and how AI recommendations are generated.
Do merchants have paid influence over AI search?
In September, Shopify painted a picture of the future of shopping when it unveiled its partnership with ChatGPT, which accounts for about 82 per cent of the AI chatbot market. In this new market, shopping happens not just through search or ads, but within AI conversations, with merchants appearing “naturally” in recommendations and purchases made without leaving the chat.
“Our goal is always to keep merchants on the cutting edge by default,” said Vanessa Lee, VP of Product at Shopify. “As we expand, merchants will unlock new ways to sell automatically, with their brand and shopper relationships still front and center.”
The announcement raises a key question for consumers: will merchants be able to influence which products the AI recommends?
OpenAI, the developer of ChatGPT, said in a statement that it does not support sponsored ranking or paid influence.
The AI company collects a nominal transaction fee from merchants selling on ChatGPT, while Shopify itself does not charge its merchants.
However, with OpenAI, valued at $500 billion (USD), still unprofitable and racking up staggering costs, Nayebi said the company will need to explore ways to monetize, such as raising subscription fees or offering paid advertising for brands.
Nayebi is optimistic about the edge chatbots offer over traditional online shopping, noting their ability to deliver personalized recommendations and quickly gather information from a wide range of sites.
OpenAI said its AI shopping research draws on a broad range of publicly available retailers and reviews, weighing factors such as specifications, price, availability and quality signals to provide clear comparisons.
“The first and key thing is that the users are going to be able to provide their own preferences, and ChatGPT is going to understand their history, their preferences and their context, and it will memorize that,” said Nayebi. “Any recommendation is going to be based on your preferences.”
What it takes for businesses to be seen in an AI age
It was two months ago that Rick Klouwenberg, who runs a jewelry e-commerce shop on Shopify from the Netherlands, first realized that customers were discovering his business through AI.
A customer emailed him after finding his shop by asking ChatGPT to search for cheap Moissanite jewelry. She wanted more information about a ring’s size and quality, and later placed an $80 (USD) order.
“It was very surprising and kind of amazing, to be honest,” said Klouwenberg, who later used the same prompt to ask ChatGPT and found his products being recommended in the chat.
Klouwenberg said he believes his product names are simple but well-described, and that’s why they likely match what people are searching for on ChatGPT.
Carl Boutet, chief strategist at Montreal-based retail advisory firm Studio RX, told the Star that much remains unknown about how AI chatbots rank products, and retailers are currently trying to figure out how to optimize their presence on AI-powered platforms.
“It’s a black box,” said Boutet. “By design, these algorithms are very complex and are hard to understand how they come up with the recommendations they do.”
Chatbots are known to search for authentic reviews on platforms such as Reddit, prompting some companies to strategically embed information on the topic-based social media platform in a bid to influence AI, Boutet said.
When asked by the Star how merchants can increase their exposure within ChatGPT, OpenAI said the chatbot uses a web crawler called OAI-SearchBot to access information, and businesses should ensure their websites are not blocking it.
Shopify launched “Agentic Storefronts” on Dec. 10, allowing its merchants to set themselves up to be “instantly and accurately” discovered in AI conversations, cataloging products with correct descriptions and preparing answers to questions customers might ask AI.
Nayebi said AI chatbots favour websites that load quickly and provide clear product information, including return policies and shopping details.
Retailers that prioritize this, he added, are likely to outpace their competitors in the age of AI-driven e-commerce.
Can we trust AI to do our shopping?
While Klouwenberg’s jewelry shop has already been recommended by ChatGPT, the 20-year-old entrepreneur said he remains skeptical that the AI chatbot could genuinely drive sales for his business.
“I don’t think people will actually rely on (the AI recommendations), because, still, ChatGPT can also give you false information. People would be holding back a little bit from buying through ChatGPT,” he said.
Bruce Winder, a retail analyst, told the Star that this year, Canadian consumers are using AI far more to search for, discover, and compare products, but not necessarily to make purchases, as concerns remain over the criteria AI uses to select products and the sharing of credit card information.
“The biggest challenge they’re going to have is the accuracy issue and the trust because citizens don’t necessarily trust AI as much,” he said.
While many customers are familiar with the chatbot side of AI for searching products and comparing prices, Nayebi said some companies, including ChatGPT, have rolled out “agentic AI” mode that autonomously picks products, adds them to the cart, and pays using users’ credentials — in some cases requiring only a final confirmation at checkout.
According to KPMG’s survey, agentic AI has sparked interest among Canadians, but 78 per cent are concerned about the privacy of their personal data, 72 per cent feel agentic AI-powered shopping is impersonal, and 86 per cent want to approve every step before an AI agent takes action.
Nayebi, who wrote the book Foundations of Agentic AI for Retail, said he believes Canadians will grow more comfortable using the new technology. But he is worried that if retailers and consumers don’t step up their adoption rate of agentic AI, Canada could miss out on a significant economic boost.
Boutet said agentic AI could make shopping more seamless by eliminating steps that add little value, but it could also prompt people to buy items they hadn’t intended, simply because it’s so easy.
“I think we’re still way before people can just completely offload their purchasing, and let an agent plan their trip to Paris and purchase their kids’ hockey equipment,” said Boutet.
