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Plus, Lowe’s CMO gets new remit, and Sam’s Club wants to predict what people will buy next.
Google is expanding its AI-powered shopping features for the upcoming holidays. New updates include AI performance insights in Merchant Center, which helps manage brands' e-commerce catalogs, and expanded capabilities for the Universal Commerce Protocol (UCP). Google has also introduced new tools to help merchants understand how consumers discover products through conversational experiences. UCP-powered checkout is being integrated across search, including AI Mode and the Gemini app. Additionally, eligible U.S. retailers can now embed conversational AI agents directly into YouTube video ads, allowing shoppers to ask questions and research products without leaving the video, indicating that AI discovery is becoming a crucial storefront for retailers.
The commerce platform Howl, which facilitates affiliate businesses by connecting content creators with retailers, quietly sold its creator division to Connexity, a commerce platform owned by Taboola, in August. This transaction occurred amidst recent allegations against Howl for missed payments to publishers. Despite the sale of its creator arm, the company has stated its intention to continue operating within the broader commerce sector.
Kroger's latest earnings report highlighted significant growth in its retail media business. Kroger Precision Marketing, the company's advertising division, experienced a notable 24% increase in profit during Q2, marking its strongest retail media profit growth since 2021. This performance included an 88 basis point year-over-year increase in media monetization, alongside a 20% growth in e-commerce sales. These results are particularly important as Kroger simultaneously lowered its full-year identical-sales outlook, demonstrating how advertising revenue is increasingly compensating for slower core retail sales for many retailers.
In a strategic move, Kroger has removed all Red Bull products from its U.S. stores and fuel stations. This decision underscores CEO Greg Foran's commitment to push back against food brands' rising manufacturing prices, which are impacting consumers due to inflation. Foran has indicated that if brands do not meet Kroger's price expectations, the grocery chain is prepared to increase its stock of private label products. This follows a similar decision to remove certain Boar’s Head products from stores in Cincinnati, signaling a tougher stance on supplier negotiations.
The Interactive Advertising Bureau (IAB) has updated its advertising outlook for the year, now projecting a 12.3% year-over-year growth in ad spend, an increase from its previous forecast of 9.5%. The report identifies commerce media as one of the primary drivers of this accelerated growth, alongside social and streaming platforms. Specifically, commerce media's growth is now anticipated to be 13.6% year-over-year, up from an earlier expectation of 12.1%, highlighting its expanding influence in the digital advertising landscape.
Sam’s Club is significantly expanding its advertising business by implementing AI-powered predictive targeting. This advanced system utilizes membership data along with over 400 intent signals to accurately identify consumers who are likely to become high-value customers and predict their next purchases. In a pilot program with Procter & Gamble, this predictive targeting reportedly led to a 2.3X increase in marketing effectiveness and achieved an impressive 94% accuracy rate in predicting purchases over a 12-month period, demonstrating its potential for highly effective personalized marketing.
Lowe’s has expanded the responsibilities of its Chief Marketing Officer, Jen Wilson, to include digital commerce, encompassing Lowes.com and its third-party marketplace. This new remit is in addition to her existing duties overseeing marketing, loyalty programs, personalization, and retail media. Wilson is now among a select group of retail CMOs tasked with managing both the brand's internal ad spending and its advertising sales. This move signifies a growing trend where media, customer data, and commerce are being integrated under a single leadership to create a more connected and seamless customer journey.
A new report from WPP-owned VML highlights a significant trust issue within AI shopping, as revealed in its 10th annual Future Shopper report. Although 82% of consumers have engaged with AI for shopping, a majority (58%) feel the need to cross-check product recommendations generated by AI before making a purchase. Furthermore, a substantial 33% of consumers expressed an unwillingness to allow AI to make purchases on their behalf, indicating a clear hesitancy regarding AI's autonomy in financial transactions.
Mastercard and Trip.com are pioneering the integration of agentic commerce into the travel industry. Their partnership involves combining Mastercard’s Agent Suite for Merchants with Trip.com’s AI assistant, TripGenie. The goal of this collaboration is to enable consumers to navigate travel discovery and booking processes using conversational AI. A phased commercial rollout of this innovative solution is scheduled to begin in 2027, potentially revolutionizing how travel is planned and booked.