Retail Unwrapped from The Robin Report

The AI Agent Survival Guide for Retailers

Barry McGeough — Thu, 21 Aug 2025 04:01:00 +0000

Recently, I sat down with Steve Statler, CEO of AmbAI, expert in Ambient AI technologies, author of “Beacon Technologies,” and host of the Mr. Beacon Ambient IoT Podcast, to discuss the dramatic advances in AI. This report is the distillation of our wide-ranging conversation that we offer as a survival guide for retailers and brands.

The irreversible shift is already happening. ChatGPT is answering 1 billion searches per week. Traffic from AI to retail websites jumped 1,200 percent in a single month. Nearly 40 percent of consumers now use AI as a shopping assistant for researching products or planning purchases.

But research is just the beginning. The next wave of AI will be “agentic,” moving beyond answering questions to taking actions on our behalf, including making purchases. This represents a fundamental disintermediation threat from AI agents acting as intermediaries between brands and customers. Will this help or harm the brand and retailer connection to the consumer? Will this enhance or impede sales?

Once AI has unfettered access to product data, it becomes much harder to control the terms of engagement. The brands that survive won't be those with the biggest marketing budgets or the most shelf space. They'll be the ones who recognized that in an AI world, controlling the data bridge between digital intelligence and physical products is the ultimate competitive moat.

AI Agent Advantage

Like any procurement professional, this new generation of agents will seek to weaken the position of suppliers by restricting information flow, to get the best possible deal. Imagine a world where your AI agent negotiates directly with a supplier’s AI agent to purchase groceries, select insurance, or replace your T-shirts, jackets, worn-out shoes—all without you ever seeing a brand website, video, or advertisement. The negotiation strips away the positioning information and storytelling, which can bring value to products, by commoditizing the product that the brands are selling. Agent-to-agent transactions could spell the death of the branded experience, limiting all transactions to the lowest common denominator transactions, with us being none the wiser as to what we are being served. Clearly, this is a problem for brands, and the time is ripe for a proactive solution.

The solution lies in building a strategic alliance of brands, retailers, and technology partners that controls the data flow between consumers using AI to buy and the retailers and brands that supply them. This alliance would ensure brands maintain direct customer relationships while leveraging AI’s power to enhance rather than commoditize the shopping experience and storytelling that makes products valuable.

The Coming Disintermediation

Consider the structural and cultural shift we’re facing. AI is positioning itself between brands and customers, armed with three unprecedented advantages:

Intimate customer knowledge: While Amazon knows what you’ve bought, AI knows why you bought it, what you use it for, and whether you really needed it. Through conversations about relationships, health, finance, and daily life, AI platforms are building the most comprehensive customer profiles ever assembled.
The power of consumers’ automation bias. As termed by the National Institutes of Health, this bias is the very real and prevalent phenomenon when people, consumers, favor or give greater credence to information supplied by technology like AI agents and ignore contradictory evidence. When agents talk, with uncanny knowledge of our preferences, better mimicking human nuance and empathy and with more authority, we will listen.
Complete product intelligence: AI can parse every specification, review, and data point about every product from every competitor, then analyze, compare, and negotiate faster than any human buyer.

This combination of customer knowledge and product intelligence is potent. Users won’t need to navigate websites or deal with limited store staff. AI will understand requirements, shop around, negotiate, and even create personalized content to tell the story of why Product X is perfect for Customer Y.

Traditional merchandising tools—placement, positioning, brand relationships—become irrelevant when a superintelligent purchasing agent is making decisions based purely on data and customer intimacy.

Walmart just announced it will focus its AI efforts on agency, hoping to attract more shoppers away from Amazon with four new super agents, with the goal that AI will drive its ecommerce growth, aiming for online sales to account for 50 percent of its total sales within five years. Designed to operate with minimal human oversight and execute complex tasks across Walmart’s vast ecosystem, the four agents include:

Sparky (customer-facing)
Associate (employee support)
Marty (supplier automation)
Developer (AI testing)

Walmart may be the first to announce such a fully automated decision-making platform for both brands and consumers, but it certainly won’t be the last.

AI: Disruptor in Chief

We can already see the evidence of agents’ disintermediation. Website traffic is falling measurably across the board as AI summaries are presented on the Google home page. These summaries satisfy a user’s question with zero click throughs to brand websites. Existential question: How can you directly influence consumers if they never see your messaging?

The AI powerhouses are actively preparing to take on purchasing tasks on behalf of your customers. Over one in four of the integrations recently announced by Anthropic was with payment systems PayPal, Square, and Stripe.

OpenAI announced its first services for brands, enabling purchases directly from ChatGPT. There will be no shortage of brands that accept the offer to participate in this pilot, desperate to show shareholders that they have an AI strategy that goes beyond writing marketing copy more efficiently.

The Data Fortress Strategy

The solution lies in controlling something AI desperately needs but currently can’t access at scale: real-world product data. Today, AI’s view of the physical world is surprisingly limited. Show ChatGPT a photo of a product, and it sometimes guesses wrong. AI typically can’t navigate auto-ID systems, struggles with barcodes and QR codes, and has no connection to RFID or emerging ambient IoT data streams.

But this data represents the largest untapped information pool in the world—trillions of physical items, each with massive datasets about ingredients, provenance, authenticity, location, and lifecycle history. This isn’t just defensive data—it’s the foundation for new business models around transparency, sustainability, and customer engagement.

This isn’t theoretical. The EU is mandating Digital Product Passports (DPPs) for apparel, toys, and furniture within two to three years. Products entering the world’s largest regulated market will need digital IDs with comprehensive provenance data. Like EMV chip-and-pin standards, what starts as regulatory compliance becomes a competitive advantage through reduced fraud, improved efficiency, and enhanced customer trust.

Any brand wanting to sell into Europe will need to develop its DPP systems. This will eventually be a formidable war chest of data that the AI companies won’t control. Brands already have an amazing cache of product information that they can use to differentiate a direct, brand-controlled, AI-enabled, shopping experience, which can make for a better, more consultative retail experience. Think of all the instruction manuals, recipes, videos and product information that can be fed into a brand-controlled AI.

Building an Alliance Moat

No single brand can defend against AI disintermediation alone. A single brand app with AI, no matter how good it is, will not stem this tide. We’ve seen most brands fail when they attempt to drive meaningful usage of an app that works with their products exclusively.

An alliance must include three key constituencies working in concert:

Leading brands across categories (CPG, fashion, electronics, automotive) that control rich product data
Progressive retailers who understand the value of customer relationships over pure efficiency
Technology partners who can build and operate the neutral infrastructure required

If we are to offer utility, get frequency of use, and the intimacy that is key to an effective selling experience, a multi-tenant platform will be required that helps consumers manage their pantry, wardrobe, drinks cabinet and tool chest with a one-stop shop. This kind of platform lends itself to being used regularly, having utility, and building trust if it helps customers keep control of their data in a way that the AI giants are not disposed to do.

Timing is one crucial advantage: AI’s connection to the physical world is still being built. Like setting smartphone rules for teenagers, we get one chance to establish ground rules before the AI floodgate opens. Once AI has unfettered access to product data, it becomes much harder to control the terms of engagement.

The brands that survive won’t be those with the biggest marketing budgets or the most shelf space. They’ll be the ones who recognized that in an AI world, controlling the data bridge between digital intelligence and physical products is the ultimate competitive moat.

The Crossroads

Brands face an immediate binary choice: Build an alliance now while you still can or become a commodity product in an AI-driven marketplace where you have no direct customer relationship and compete solely on AI-optimized metrics. Europe is already on the case building a defense that will provide rich data about products that should not be handed over to the AI giants lightly.

While big tech races to capture consumer data, they’re conveniently overlooking a fundamental issue: giving consumers actual control and portability over their product ownership data, usage habits, and preferences.

The question is whether brands will proactively shape a system that leverages these opportunities in a way that consumers can trust or reactively comply with whatever emerges from Silicon Valley. This Alliance needs founding members now—brands willing to lead this new model of cooperative competition. The window for establishing ground rules is closing rapidly. Every day that passes without coordinated action is a day closer to permanent disintermediation.

Winter is coming. The question is whether retailers will work together to build the alliance moat or find themselves on the wrong side of it when the battle for market dominance begins.

Warnings and Revelations about AI

Barry McGeough — Thu, 07 Aug 2025 04:01:00 +0000

Editor’s note: We are taking this opportunity to preview an AI-enhanced future that is closer than you think. Although not specifically related to retail, this report is required reading to be forewarned and forearmed about emerging tech breakthroughs that will change all our lives. Knowledge is power, and in this AI Era, the more you know, the better decisions you can make.

We Are All Dreamers…Perfect Dreamers

When it comes to technology, regardless of the consequences, we humans are inexorably drawn to optimism, and we have been consistently proven right to do so. Using our dystopias as guardrails, technology has always delivered outcomes that extend the quantity and quality of human life.

From simple stone tools to complex genetic engineering and information technology, the history of technology is the history of human invention. The speed at which the invention of these tools and technologies is being delivered now has become exponential as the application of machine learning and AI becomes the ubiquitous open-source ingredient.

Tech History as Prelude

Take for example, the cotton gin. Invented in 1793, the cotton gin used a combination of wire teeth on a rotating cylinder and a grate or screen to pull the cleaned cotton fibers through, significantly increasing the speed and efficiency of cotton processing. This had a major impact on the cotton industry, particularly in the Southern states, where cotton was a major, labor-intensive crop and whose commercial use would force huge percentages of the labor force out of work. In the face of this radically disruptive technology, the cotton gin’s inventor, Eli Whitney, wrote this to his father: “One man and a horse will do more than fifty men with the old machines. ‘Tis generally said by those who know anything about it, that I shall make a Fortune by it.”

And indeed, fortunes were made, and the potential catastrophic implications to society were far overshadowed by the entire industry that was born from this simple invention that fueled regional growth in the South for over a century.

And so, it continues into this century. Andrew Ng, founder and lead of Google Brain and currently an Amazon Board member, recently said the same. “Just as the Industrial Revolution freed up a lot of humanity from physical drudgery, I think AI has the potential to free up humanity from a lot of the mental drudgery.”

The Mother of Invention

From simple stone tools to complex genetic engineering and information technology, the history of technology is the history of the human invention of tools and techniques. The speed at which the invention of these tools and technologies is being delivered now has become exponential as the application of machine learning and AI becomes the ubiquitous open-source ingredient layer to everything and is mutually accelerated by the arms race for processing speed. We now measure success in petaflops (a quadrillion floating-point operations per second) and trillions of parameters (the internal, numerical values that LLMs learns during training to process and generate text).

As knowledge-seeking animals, the potential value of these tools to increase our understanding of the world around us and solve some of our most pressing problems around the quality and quantity of life is as tempting as Pandora’s Box, which, while it contained all the evils of the world, it also contained hope. As Marc Andressen said, “Technology is the glory of human ambition and achievement, the spearhead of progress, and the realization of our potential.”

While decades in the making, with this new computational prowess we are continually (seemingly daily now) seeing breathtaking exponential breakthroughs, none more exciting than in the field of Synthetic Biology, where we can truly see the practical application of the positive outcomes of AI. One powerful example of how this is already being used is being pioneered by Andrew Adams at Eli Lilly and Company. In seeking treatment to the debilitating disease for Alzheimer’s, researchers discovered the Christchurch Mutation: just one copy of the Christchurch variant conferred protection against Alzheimer’s disease, even in individuals with genetic predispositions to the disease. Being able to apply Synthetic Biology to enhance and deliver this modification would transform the field of Alzheimer’s from treatment to prevention.

Add to this the recent open-source release of Google’s Alphafold, their free AI Model to predict the structure of all of life’s molecules and we start to see what’s now possible. The fact that Google just gave away access to over 200 million proteins and provided a free AI tool for scientists to experiment with is in itself exponential.

Admittedly, to the non-scientific community, this seems interesting but arcane until we start to see the practical application of the new technology toolsets being built. Enter Colossal founder Ben Lamm, a protégé of George Church. A self-described ‘serial entrepreneur,’ he started Colossal with $15M in 2019, now worth $10.2B, with the sole purpose of advancing the cause of de-extinction, using advanced gene editing technology to rebuild the DNA of lost megafauna and other creatures. With Earth on track to lose between 30 to 50 percent of its biodiversity by 2050, maintaining this integrity is vital to life on Earth; his work is mission-critical. His most recent accomplishment, the birth of three dire wolves (Romulus, Remus, and Khaleesi) is considered “the world’s first successfully de-extincted animal,” the first of their kind to be alive in over 10,000 years. While Woolly Mammoths and Dodo Birds are also on their roadmap, the work at Colossal is not simply to create novel creatures for 21^st-century Jurassic Parks; instead, it is about building the technological capabilities to stop the current waves of extinction in their tracks. Colossal also seeks to use Synthetic Biology in other useful ways, successfully editing the genes of an Amazonian microbe they call ‘X-32’, from a microbe that enjoys eating plastic to a microbe that is voracious for them, digesting polymers in weeks instead of decades or centuries and leaving behind carbon dioxide, water, and biomass. This novel solution could swiftly help us address the problem of plastic pollution on our planet and microplastics in our bodies, all with the enhanced use of data and computational power.

A Synthetic Future

With synthetic data and synthetic biology naturally comes ‘synthetic everything’. Synthetic Humans (Robots), Synthetic Media (Google VEO, Midjourney), Synthetic News and even Synthetic Truth. That there are bad actors and bad intent, we are clear. And the need for us to be diligent and leery, especially in this current era, of dystopias of our own making, is real. The need for the ethical human in the loop couldn’t be more dire and we must all remain diligent to these poor outcomes. We must, and will be, diligent, as these are the human decisions put before us as we build this awesome new AI toolset whose promises far outweigh the perils.

At this year’s World Economic Forum in Davos, Andrew Ng, ever the tech optimist, was asked directly about the perils of AI and Artificial General Intelligence (AGI), and he replied, “Do we think the world is better off with more intelligence? We use, primarily, human intelligence; now we have artificial intelligence. I think that intelligence, net-net, tends to make societies wealthier, make people better off…intelligence can, in some cases, be used for nefarious purposes, but on average, I think it actually makes us all much better off.” But is this a false equivalency? More intelligence may be better intelligence, but is more AI better AI? The answer to this depends wholly on how we use it.

From our daily businesses to our daily feeds, the exponential pace of the practical use cases for the application layers of machine learning, AI, and even Agency is indisputable. It has already become a known-known that AI is the ubiquitous open-source business ingredient for speed, agility, efficiency and profitability. To paraphrase Eli Whitney, ‘From this technology, one can make fortunes.’ However, only by fully understanding the implications beyond the opportunities and using the processes of applied innovation to look at technology breakthroughs outside our industry, we can see more clearly a wider view, ensuring we drive the most desirable outcomes.

As leaders, we must always be deliberate about what we set in motion. In Pandora’s fable, when we are open to every inevitability there can be unintended consequences. But with the right insights, we also know that Hope never left the box.

Consumer Retail Industry Trends in a Polarized Market

Barry McGeough — Wed, 19 Jun 2024 10:00:00 +0000

These days we are living in a polarized business dichotomy: Even in the best of times, every day is a rock fight. On the good news front:

The U.S. economy has never been better
With target inflation in sight, the Fed avoided recession and stuck a soft landing
Unemployment is staying steadily under four percent
Real wage growth is up
Real consumer spending outpacing 2023

Yes, but we are paradoxically seeing record layoffs in every sector of the economy and record store closures, from Target to Macy’s, and high-profile bankruptcies from Red Lobster to Rite Aid. The contraction (literally) is making the retail world smaller and more deliberate.

The way forward in a polarized U.S. market is nothing short of opportunistic. Big commodity brands are seeing not only expansive growth into new channels but are also working with retailers to improve product value and introduce technology to optimize their businesses and their ability to connect to consumers.

Economic Misalignment

In February of this year, Jason Draho, Head of Asset Allocation Americas at the UBS Chief Investment Office, published an almost shockingly rosy report called “The CEO Macro Briefing Book: On track for a soft landing, what’s next?” The forecast reported that the U.S. economy would slow in 2024, but only modestly, around 3.1 percent, and that Fed rate cuts would ease lending conditions, raising confidence in the economy (revised and now anticipated for Q3). It also forecasted a record amount of dry powder unlock which will be pointed toward a rebound in M&A deals leading to a new Roaring 20s. The report also predicted consumer spending should remain healthy, even with labor demand cooling. There will be lower supply growth relative to the past two years which should keep the labor market from getting too loose. And finally, household wealth would be at near record highs, real incomes would rise, debt to income levels would not be stretched, and debt servicing would remain very low despite higher rates.

In support of this optimistic outlook, Sam Goldfarb of the ever-pragmatic Wall Street Journal wrote an article in April entitled “Envy of the World” with the subhead “U.S. Economy expected to keep powering higher as economists lift their growth forecasts in latest WSJ survey.” He noted “It has been two years since forecasters felt this good about the economic outlook,” quoting RSM U.S. chief economist Joe Brusuelas. “We think that the American economy has entered a virtuous cycle where strong productivity results in growth above the long-term trend, inflation between 2 percent and 2.5 percent and an unemployment rate between 3.5 and 4 percent.” Goldfarb reported that 69 economists were surveyed who on average believe that core PCE inflation will fall to 2.1 percent by the end of next year without a recession.

What’s going on here? It’s a tale of two economic perspectives. Just contrast those rosy outlooks with the latest and ongoing retail job cut news:

Walmart just slashed 2,000 jobs
Columbia recently announced pending layoffs
VF let 500 go
Unifi cut headcount
Nike laid off over 700 just last month
PVH just announced it is planning its next wave of layoffs to fill a $50M gap

And it’s not restricted to the retail sector:

Google laid off hundreds more workers in 2024 and has ended its permanent hiring practice
Unity Software is eliminating 25 percent of its workforce
UPS will cut 12,000 jobs in 2024
Cisco slashed more than 4,000 jobs amid corporate tech sales slowdown
Peloton laid off 15 percent of its workforce in May 2024

According to Tech Crunch, “The tech layoff wave is still going strong in 2024. Following significant workforce reductions in 2022 and 2023, this year has already seen 60,000 job cuts across 254 companies, from TikTok to Tesla according to an independent layoffs tracker.”

Welcome to the Great Contraction

How can two seemingly polar opposites be happening at the same time? Why the dichotomy? This perplexing contraction has forced some of our best and brightest talent into uncertainty and early retirement, ironically threatening to upset the upbeat, current economic state. This is in part caused by irrational post-covid exuberance but more importantly, has to do with a fundamental misread of the U.S. consumer market.

What’s happening in the U.S. consumer goods and retail sector has been foretold. Over a decade ago Ken Duane, then President of the Heritage Group at PVH, famously and contentiously pronounced that “America is a value market, and we just haven’t figured it out yet.” But he had. What he was referring to is described by Deborah Wienswig, CEO of Coresight Research, as the Hourglass Effect. During times of volatility and uncertainty (read now) consumers gravitate towards either value or premium products. “Middling brands and retailers face challenges as consumers either trade up (to brands they are connected to) or trade down for affordability and value. And the same consumer can – and does — do both,” according to Weinswig.

Fighting the Contraction

The opposite of the Hourglass Effect and Robin Lewis’s classic moniker “the Race to the Bottom,” is trust. Brands that truly connect to consumers through great product, innovation, and engagement engender trust. Consumers look for brands that they believe know and understand them and make them part of their lives. Patagonia, Hoka, On Running, Stanley, Lululemon (who just posted yet more double-digit quarterly gains) and Hugo Boss are enjoying category growth and pricing expansion – built on authenticity, recognizing their customers as individuals. They have transcended from transactions to relationships.

By way of example, the Hoka Cielo 21, a $275 running day shoe sold out its Q1/24 first run on Instagram in 14 minutes through a fearless combination of high-performance digital technology and a genuine consumer experience. The dichotomy is the malaise of over-exposed and taken-for-granted Nike who has solidly cleaved to the $100 shoe, underestimating the consumer.

Questionable Value

At the value end of the market, Walmart boasts 3,3559 supercenters and will add 150 more doors in the coming years. TJX will add 90 doors in the U.S. this year, Costco will add 31 warehouses this year, and Dicks expands its dominance with its current 12 House of Sport locations with 10 more planned for this year and seven new Public Lands outdoors stores to celebrate and protect natural lands. The health of the value market is robust. Burlington is not the only off-price brand benefitting from lower-income shoppers who need a deal alongside trade-down consumers who want a deal.

So, those brands who don’t see America as a value market are operating in the Messy Middle, what some have uncharitably called “the kill zone.” These are the brands located at the fragile connection point in the middle of the hourglass. This “mediocre middle” market includes holding companies like Wolverine Worldwide. At full strength, it owned 13 brands but has now wholly divested its Keds and Sperry brands. Just last month it licensed part of its flagship Merrell brand and continues to see its stock price tanking.

VF brands Vans and Timberland (rumored in Footwear News to be for sale) have seen dramatic declines and are in turnaround mode under Bracken Darrell’s new austerity leadership. As noted Nike, never to be discounted, is also in rebuild mode after a radical 2019/2020 oversimplification of the business flattening of much of its VP-level leadership, and in the process, eliminating vital legacy, tribal brand history and product knowledge. Rudderless post-Covid, their break-up with Foot Locker has been course-corrected with a clear focus on the middle lane including re-teaming with new CEO Mary Dillon at Foot Locker and a new commitment to Innovation.

Under Armour with its leadership travails and sagging relevance to its aging core customer could also be rated in this class. And all this contraction is now expressing itself as a brand fire sale that sees savvy investors like Authentic Brands, whose portfolio of 40-plus iconic and renowned brands generates more than $25 billion in global annual retail sales. It recently acquired and licensed brands like Sperry, the Boardriders brands, and most recently Champion. These are gigantic deals further polarizing each end of the hourglass by flooding the value markets with well-known brands, eviscerating the middle, and reducing middling and moderate brands and retailers to utilitarian transactions and possible oblivion.

An Alternative Prediction

The way forward in a polarized U.S. market is nothing short of opportunistic. Big commodity brands are seeing not only expansive growth into new channels but are also working with retailers to improve product value and introduce technology to optimize their business and their ability to connect to consumers. Walmart CEO Doug McMillon spoke this year at CES about his commitment to “Adaptive Retail” that is interactive, predictive, responsive and seamless. His team is currently delivering app-based AI recommendations, scan-and-go cashier-less payment, voluntary time off, drone delivery service, and digital programs including “Shop with Friends” and “Text to Shop.” Walmart is also developing GenAI customer search interfaces built into the app partnering with Google. The adaptive retail model is launching in Houston in 2024 and will roll out into other metros in the coming years. Walmart is doing this because it knows it must connect to consumers to fuel its growth objectives: It has the money and resources to do this and more.

For those brands currently successful in direct-connect-to-consumer, we can look forward to an explosion of AI-driven technologies from rapid advances in materials sciences to the acceleration and democratization of everything from code to loyalty. The ubiquity of “text to everything” technologies like Sora.ai just released by Open AI’s ChatGPT will democratize every part of the product experience from creation, imagery, words and ultimately the customer experience. Companies like Run Diffusion, which provide GPU-as-a-service to transform GenAI images to commercially scalable media and toolsets with simple text prompts – and doing so at a fee of $0.50 per hour – will continue to accelerate, amplify and excite the consumer experience.

We will also see more mission-driven, audacious moves that meaningfully – and more importantly genuinely – connect to consumers. Patagonia is the poster child for purpose-driven retail. It changed its entire corporate structure and transferred all ownership to two new entities: Patagonia Purpose Trust and the Holdfast Collective. Every dollar that is not reinvested back into Patagonia is distributed as dividends to protect the planet in their laudable effort to save our home world.

Foresight Is Insight

The Great Contraction is a wake-up call. Leaders that see the dichotomies in both economies and markets can temper the potential whipsaw effects of opportunity and threat to their businesses by acknowledging of the hourglass shape of the U.S. market and leaning into it. The prescription is twofold: First is embedding the ability to see around corners and choose the lane that best supports the brand’s strategic initiatives. This is the case for strategic foresight as an essential discipline coupled with critical thinking. Second is developing the ability to grow muscle in the right places to innovate and serve the value consumer in both physical and digital connection without wasting intellectual and financial capital where it is not required. This is the case for applied innovation to build brand value, revenue, and profit.