While Mars’ recent retail trend report predicts AI will create a more seamless, convenient and entertaining shopping experience, a former Whole Foods Market executive predicts the technology may instead deepen the industry’s existing reliance on data collection, targeted advertising and pay-to-play product placement.
Mars estimates that AI-powered shopping could generate $788 billion in spending. However, the mechanisms behind AI-generated shopping recommendations for consumers experiences may look more like the next iteration of the retail media ecosystem.
The future of AI-powered shopping likely will resemble retail media, where recommendations are shaped by data collection and advertising dollars, says Errol Schweizer, former vice president of grocery at Whole Foods Market.
Behind the promise of AI shopping lies a familiar pay-to-play model
The current omnichannel grocery system operates under a pay-to-play model where brands pay upfront slotting fees for visibility on digital or physical shelves.
For AI to make personalized product recommendations, it requires personal data from the user – purchase history, browsing behavior, location information, consumption patterns and lifestyle preferences – which creates a new revenue stream for retailers to develop hyper-targeted marketing, Schweizer notes.
On AI search platforms like ChatGPT or Gemini, a brand can show up as the top answer in two ways: through generative engine optimization (GEO) or through paid placement usually marked as a sponsored recommendation.
AI shopping tools, Schweizer says, will likely create a more sophisticated pay-to-play retail media ecosystem. For brands, visibility may depends less on organic consumer discovery and more on their ability to pay for placement within AI-driven recommendations.
Could the same data powering AI recommendations also shape pricing?
While he expects AI to amplify existing retail media dynamics, Schweizer argues that policymakers should establish guardrails around how retailers use personal consumer data and pricing algorithms.
These guardrails include regulations that define and restrict “surveillance” pricing, as well as stronger antitrust enforcement to address power imbalances between large retailers, suppliers and small to mid-sized brands, Schweizer said.
Retailers, like Kroger and Walmart, developed electronic price tags using proprietary technology to adjust prices more quickly due to supply chain disruptions or inflation. They have sparked industry concern over pricing practices.
Walmart replaced its paper price tags with digital shelf labels (DSLs), which is expected to reach all stores by the end of the year. While Walmart CEO John Furner says the DSLs are intended to “price products not the person,” consumer advocacy groups like The Groundwork Collaborative raise concerns that the retailer will enable personalized pricing practices and surveillance.
In August, the Federal Trade Commission sought public comment for a proposed policy statement citing rising concerns on the use of personal data to set prices. The agency said in a statement that it “does not have the legal authority to ban personalized pricing in all circumstances,” but businesses that do not disclose how their personal data is being used for pricing “may be in violation of the FTC Act” and other FTC-enforced laws.
Concerns around dynamic pricing practices using electronic surveillance data have already resulted in patchwork legislation across the US as policymakers seek to establish rules around algorithm pricing and personalized offers.
Maryland became the first state to restrict data-driven grocery pricing by large retailers and third-party food delivery services. The state’s Protection From Predatory Pricing Act was enacted on Oct. 1 and requires that grocery prices remain fixed for at least one full business day, excluding loyalty programs, subscription prices and price differences based on location, supply and operating costs.
Connecticut is the second state to restrict personalized pricing practices under Public Act No. 26-64, taking effect July 1, 2027. The law extends across broader retail, including grocery, and third-party delivery services. New Jersey’s Fair Price Protection Act also bans the use of personal data to influence grocery prices and takes effect on Aug. 1, 2027.
