Microsoft is rolling out a suite of AI tools designed to bring intelligent automation to every corner of the retail business. The new capabilities aim to help retailers move faster, serve shoppers with greater relevance, and operate with more efficiency. By adding a connected layer of intelligence across merchandising, marketing, store operations, and fulfillment, Microsoft is transforming fragmented workflows into coordinated execution.
Turning Conversations Into Transactions
The most immediate impact of this technology will be felt in the checkout process. Copilot Checkout lets merchants reach shoppers as they complete purchases within Copilot, without sending them to external sites. This feature is now available in the U.S. on Copilot.com. Partners including PayPal, Shopify, and Stripe are already supporting the experience. Shoppers will be able to buy from brands like Urban Outfitters and Anthropologie, or discover handmade items from Etsy sellers, all without leaving the conversation.
Rafe Colburn, Chief Product and Technology Officer at Etsy, stated that with one integration, they open the door for their sellers to show up across new surfaces without extra work. It’s a straightforward way to connect their creativity to high-intent buyers.
Shopify merchants will be automatically enrolled in Copilot Checkout after an opt-out period. Mani Fazeli, VP of Product at Shopify, noted that the feature can move a customer from intent to transaction in seconds.
Adobe reported that AI-driven ecommerce traffic surged by 693% during the 2025 holiday season compared to the previous year.
Guiding Shoppers Through Digital Experiences
Microsoft is also introducing two solutions to power conversational shopping. Brand Agents, available for merchants on Shopify, lets brands bring their authentic voice into every digital interaction. Trained on a product catalog, the agent answers detailed questions and engages shoppers in brand-aligned conversations. A personalized shopping agent template in Copilot Studio offers a customizable framework for deeper customization. This template supports real-time discovery and recommendations across web, mobile, and in-store channels.
For the retail industry, the shift toward AI-powered commerce represents a fundamental change in how customers interact with brands. Shoppers are increasingly comfortable with AI assistants, but retailers must ensure these tools remain helpful rather than intrusive. The ability to guide a customer through a product selection or suggest complementary items can significantly reduce purchase friction. However, maintaining a human connection remains essential, especially for brands that rely on storytelling and craftsmanship to build loyalty.
Jenny Jidborn, IT Manager at Kappahl Group, described the template as a flexible foundation for exploring AI-powered guidance. “It supports our ambition to improve conversion while also reducing returns through better decision support at the product level,” Jidborn said.
Microsoft is also launching the catalog enrichment agent template in Copilot Studio in public preview. This assistant extracts product attributes from images, enriches them with social insights, and automates tasks like product onboarding and categorization. The template turns unstructured data into structured information that fuels discovery and hyper-personalized recommendations.
David Torrecilla, Head of Innovation at Guess, stated that they can turn product details into meaningful insights that help shoppers discover styles in real time, receive tailored recommendations and explore complete looks.
Streamlining In-Store Workflows
Retailers continue to face challenges with high turnover and a shortage of skilled frontline staff. Many employees lack access to digital tools that could help them serve customers more effectively and efficiently. Microsoft’s new AI solution is designed to change that by empowering employees with intuitive, on-demand assistance. The store operations agent template in Copilot Studio, now in public preview, empowers store leaders and associates with a natural language interface for quick answers on inventory availability and store policies.
John Khoury, Group CTO at Strandbags, described the impact of this tool. He noted that the flexibility to shape the agent around specific needs ensures teams can focus on delivering exceptional service. “With the store operations agent template, we’re advancing our AI strategy by enabling teams to act on live store insights,” Khoury said. “The flexibility to shape the agent around our specific needs ensures our teams can focus on delivering exceptional service while we stay ahead in a fast-moving retail world.”
One can explore retail agent solutions in Microsoft Marketplace and learn more about Microsoft for Retail here. To experience these solutions in action, visit Microsoft and its customers and partners at NRF 2026 at booth #4503.