Microsoft announced a new set of agentic AI solutions for retail, aimed at bringing intelligent automation to every function across the retail value chain — from merchandising and marketing to store operations and fulfillment. The company says these capabilities are designed to help retailers move faster, operate more efficiently, and deliver more relevant customer experiences in an increasingly competitive environment.

Built to integrate across enterprise systems, Microsoft’s agentic AI tools introduce a connected layer of intelligence that coordinates previously fragmented workflows. By augmenting human expertise with context-aware agents that can anticipate needs and take action, Microsoft is positioning agentic AI as a foundational operating layer for modern retail organizations.

Microsoft said its agentic AI capabilities are built to connect data, workflows, and decision-making across retail organizations. Rather than addressing isolated tasks, the agents are designed to coordinate execution across merchandising, marketing, fulfillment, and store operations.

According to Kathleen Mitford, Corporate Vice President of Global Industry at Microsoft:

“The retailers that thrive will be the ones that unify their business with intelligence that reaches every corner of the value chain,” said Kathleen Mitford, Corporate Vice President of Global Industry at Microsoft. “With Microsoft’s agentic AI, retailers can automate what slows them down and amplify what sets them apart, enabling faster decisions and stronger customer relationships while building operations ready for whatever comes next.”

Microsoft is also expanding agentic commerce through Copilot Checkout, which allows shoppers to complete purchases directly within Copilot without being redirected to a retailer’s website.

Microsoft pointed to industry data highlighting how rapidly AI is influencing online shopping behavior. Adobe reported that AI-driven ecommerce traffic during the 2025 holiday season increased by 693% compared to 2024, illustrating the growing importance of connecting authentic brand engagement with frictionless checkout.

Copilot Checkout enables merchants to reach shoppers as they complete purchases discovered directly within Copilot, allowing transactions to be completed inside the conversational experience without redirecting users to external sites, while merchants remain the merchant of record.

Copilot Checkout is now available in the U.S. on Copilot.com, with support from partners including PayPal, Shopify, and Stripe. Participating brands include Urban Outfitters, Anthropologie, Ashley Furniture, and sellers on Etsy, with additional merchants expected to join.

Executives from Etsy and Shopify framed Copilot Checkout as a way to connect shoppers with high-intent purchases without increasing operational burden for merchants.

“At Etsy, our job is to make it simple for people to discover the special things our sellers create. By bringing Etsy’s unique inventory to Copilot Checkout, we’re meeting buyers at the moment intent becomes action,” said Rafe Colburn, Chief Product and Technology Officer at Etsy. “With one integration, we open the door for our sellers to show up across new surfaces without extra work — and to keep commerce human as shopping evolves.”

Shopify highlighted merchant control and checkout continuity as central to the experience.

“Copilot Checkout can move a customer from intent to transaction in seconds, all without leaving the conversation. It’s the merchant’s checkout powered by Shopify, seamlessly fitting into the customer’s experience. This is the modern power of Agentic Storefronts: personalization and relevance, trust and accuracy, speed and convenience,” said Mani Fazeli, Vice President of Product at Shopify.

Merchants that want to onboard Copilot Checkout using PayPal or Stripe can apply directly through Microsoft.

To support more personalized digital commerce, Microsoft introduced two agentic solutions designed for customer-facing experiences: Brand Agents and a personalized shopping agent template in Copilot Studio.

Brand Agents, now available for merchants on the Shopify platform, are designed to bring a retailer’s voice and product expertise into conversational shopping experiences. Trained on a brand’s product catalogs, these agents answer detailed product questions and guide shoppers through brand-aligned interactions with minimal setup for the merchant.

For retailers seeking deeper customization, the personalized shopping agent template provides a flexible framework for building tailored experiences across web, mobile, and in-store channels. Features include real-time product discovery, contextual recommendations, and capabilities such as outfit building to support more engaging shopping journeys.

“Microsoft’s personalized shopping agent template gives us a flexible foundation to explore AI-powered guidance in a way that fits our brands, improves the customer experience and helps customers get inspired,” said Jenny Jidborn, IT Manager at Kappahl Group. “It supports our ambition to improve conversion while also reducing returns through better decision support at the product level — ultimately helping customers feel more confident and satisfied with their choices.”

Microsoft also announced a public preview of a catalog enrichment agent template in Copilot Studio, designed to automate and enhance product data management.

The agent extracts attributes from product images, enriches them with social insights, and automates catalog tasks such as product onboarding, categorization, and error resolution. This customizable template transforms product data into enriched, structured data that fuels product discovery, recommendations, and hyper-personalized shopping experiences across digital channels.

“With Microsoft’s catalog enrichment agent template forming the backbone of our personalized shopping experiences, we can turn product details into meaningful insights that help shoppers discover styles in real time, receive tailored recommendations and explore complete looks,” said David Torrecilla, Head of Innovation at Guess. “It’s a powerful step forward in our commitment to delivering service that’s as dynamic as our brand.”

Retailers continue to grapple with high employee turnover and a shortage of skilled frontline staff, while many store associates lack access to digital tools that could help them serve customers more effectively. Microsoft said its new agentic AI capabilities are designed to address these challenges by providing employees with intuitive, on-demand assistance directly within store operations.

To support this effort, Microsoft introduced a store operations agent template, now in public preview, designed to help store leaders and associates access information and act faster in day-to-day operations.

The agent provides a natural language interface for quick answers on topics such as inventory availability and store policies, while also autonomously orchestrating workflows, flagging exceptions, and recommending next best actions. By analyzing internal signals — including sales trends and foot traffic — alongside external factors such as weather, local events, and holidays, the agent delivers contextual recommendations for staffing, KPIs, and operational priorities.

“With the store operations agent template, we’re advancing our AI strategy by enabling teams to act on live store insights,” said John Khoury, Group CTO at Strandbags. “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.”

Microsoft said the goal is to help store teams make faster, more informed decisions while reducing operational friction and improving the overall customer experience.

Brands can begin by exploring the retail agent solutions in the Microsoft Marketplace.

Q: What does Microsoft mean by “agentic AI” in retail?
A: Agentic AI refers to intelligent agents that can understand context, take action, and coordinate workflows across systems, rather than performing single, isolated tasks.

Q: Which retail functions are impacted by these agentic AI solutions?
A: Microsoft’s agents span commerce and checkout, personalized shopping experiences, product catalog management, and store operations such as inventory, staffing, and execution.

Q: Does Copilot Checkout replace a retailer’s existing checkout system?
A: No. Copilot Checkout allows purchases to happen within Copilot conversations while merchants remain the merchant of record and retain control of transactions.

Q: Are these agentic AI tools replacing retail workers?
A: Microsoft positions these agents as tools that augment human expertise by automating repetitive tasks and surfacing insights, while decision-making remains with retail teams.

Q: When will these retail agent solutions be available?
A: Several agent templates are available now or in public preview through Copilot Studio, with broader adoption expected as retailers deploy them across operations.

Retailers are under pressure from every direction — rising operating costs, labor shortages, fragmented systems, and customers who expect faster, more personalized experiences. Microsoft’s agentic AI strategy directly targets these challenges by embedding intelligent agents into the workflows where retail teams already struggle to keep up.

For large retailers, the significance is less about individual features and more about coordination. By allowing agents to connect commerce, product data, and store operations, Microsoft is offering a way to reduce friction between systems that traditionally operate in silos. That means faster decisions, fewer manual handoffs, and more consistent execution across channels.

Most importantly, Microsoft is positioning agentic AI as an augmentation layer, not a replacement for human judgment. If adopted effectively, these tools could help retailers scale decision-making without scaling complexity — a capability that may increasingly determine which brands can operate efficiently while still delivering differentiated customer experiences.

Editor’s Note: This article was created by Alicia Shapiro, CMO of AiNews.com, with writing, image, and idea-generation support from ChatGPT, an AI assistant. However, the final perspective and editorial choices are solely Alicia Shapiro’s. Special thanks to ChatGPT for assistance with research and editorial support in crafting this article.