Welcome back to the Retention Edge newsletter - where we’re bringing you the latest in ecommerce, marketing and retention.
There’s more advancements this week in AI commerce, a look under the hood at the impact of tariffs, and a fascinating new approach to mobile commerce from one South Korean retailer.
Here’s what’s in this edition:
Google's AI Mode shows about 95% fewer products than a normal search on the same query, and the two surfaces barely overlap.
The Hyundai turns its ecommerce into a place to linger, and posts a 326% jump in visitors doing it.
Kroger rolls an AI shopping assistant across every one of its banners, building carts to a budget from a photographed grocery list.
Shein discloses an FTC investigation and keeps passing tariff costs to US shoppers as its US revenue slips.
Back-to-school spending tilts to essentials, with kids' apparel expected to shrink this quarter.
Now let’s jump right in.
AI and Commerce
A study from Productrise looked at more than two million listings across over 100,000 search pages and AI Mode answers over 21 days in July across the US and UK.
The study found that Google's AI Mode surfaces roughly 95% fewer products than standard search on identical shopping queries.
Standard search returned products for about 88% of queries and averaged 22.5 products per page; AI Mode returned products on just 23% of queries and averaged 4.3. The overlap between the two was almost nothing, around 0.8% of products appearing in both.
If it wasn’t clear already, it is now: AI search is just a different game. It’s time to adapt, now - before it becomes the norm.
Kroger rolled out an AI shopping assistant this week across the websites and apps for its full family of banners, from Ralphs and Fred Meyer to King Soopers, QFC and Smith's.
Shoppers can build a cart around a set budget and dietary needs, photograph a handwritten list or a recipe card to have the items matched and added automatically, or paste in a recipe URL and let the assistant assemble the order.
This is the latest in a pattern of big brands building AI assistants that live within their own properties. It’s clear that conversational AI is going to be a big thing in ecommerce. These brands are making sure that conversation happens within their walls, not outside of it.
Retail and the Consumer
The Hyundai, one of Seoul's best-known department stores, launched The Hyundai Hi, a mobile-first platform built with creative agency Base Design to recreate the feeling of wandering a department store rather than racing to checkout.
It carries around 3,000 fashion, food and lifestyle brands, but leads with curated content, editorial storytelling and community instead of endless product grids. A feature called Gems surfaces products matched to a shopper's taste and lets them share collections, while a network of "Icons," cultural tastemakers, recommend products and produce original programming, including a stylist competition called Kill It.
In its first nine weeks the platform generated more than KRW 54 billion (about $36 million) in gross merchandise value, up 43.5% year over year, with visitors up 326% to 9.6 million, traffic up 318% to 18.5 million clicks, and more than 470,000 new members.
In a filing tied to its planned Hong Kong listing, Shein disclosed an active FTC investigation into its US operations, saying it cannot predict the outcome and warning of potentially significant payments.
The filing also showed a net loss of about $99 million for the three months ending March 31, against $395 million in net income in the same quarter a year earlier, with US net revenue falling year over year while other regions grew. Since May 2025, Shein has passed the majority of added tariff costs on to US shoppers through price increases.
The ultra-cheap import model that reset what shoppers expect to pay is getting more expensive to run. As Shein's prices drift up, the floor it set under the market lifts a little, which gives domestic DTC brands slightly more room to compete on price and on the things Shein cannot easily offer.
Kids' apparel dollar sales are expected to fall 1% to 2% this quarter on a roughly 3% drop in unit demand, according to Circana, as families steer spending toward essentials.
In the same research, 57% of shoppers said they were concerned about the impact of prices on their back-to-school clothing budget, with 24% very concerned. Deloitte data cited in the piece has 80% of families planning to shop at mass merchants, and Omnisend found 45% intend to use buy-now-pay-later.
Trade and the Supply Chain
US container imports are on track to hit an all-time high in July, an expected 2.47 million TEUs, as retailers rush goods in before a new wave of tariffs lands. May already ran 14.9% ahead of the year before at 2.24 million TEUs, according to National Retail Federation data.
Brands are trying to get back-to-school and holiday inventory onshore before potential tariffs of 10% to 12.5% on imports from 60 countries take effect in August, along with proposed 25% tariffs on Brazilian goods.
The NRF's Jonathan Gold sees it as a timing scramble, with retailers racing to beat the higher rates. For operators, expect congestion in the short-term: front-loaded volume strains drayage and warehouse capacity, so the practical move is tighter coordination with logistics partners on shipping windows and storage before the bottleneck bites.
The administration has proposed tariffs of up to 50% on a set of Canadian goods, scheduled for August 19, though negotiations could still move the final rate.
The list covers autos, dairy, alcohol, fishing rods and wigs, with oil and natural gas exempt, and it invokes Section 338 of the Tariff Act of 1930 after the USMCA agreement lapsed into rolling one-year periods on July 1. The targeted products represent roughly $20 billion in annual exports, about 5% of the $382 billion the US imported from Canada in 2025.
Because the categories are narrow, most large consumer brands look insulated. The sharper pain falls on small and midsize businesses in the named sectors, independent spirits and specialty cheese among them, where a 50% duty is hard to absorb or pass on. Worth a look if any part of your supply chain touches the listed goods.
DTC Brands
PopSockets is trying to grow beyond its signature grip with limited drops, TikTok content and new hardware. Its magnetic Low-Pro, a toothpick-thin kick-out stand, ran at Apple in June before launching on PopSockets' own site, and the $39.95 Low-Pro Grip Black became the company's number-one selling SKU in Apple within its first two weeks.
Founder David Barnett is blunt that "it's not easy to make money on TikTok Shop," using TikTok videos mainly to drive traffic to the website and retail partners rather than to sell in-app, and he calls the DTC site "the tip of the spear" for reaching Gen Z, citing double-to-triple-digit growth there over three years.
It is a useful case study for any brand built on one hero product: expand the line around it, use social as a discovery engine rather than a checkout, and treat the owned site as the place where the brand relationship actually gets built.
Also This Week
Google now shows Target CPA and Target ROAS as standalone bidding options in campaign setup rather than as goals attached to Maximize Conversions. The mechanics are unchanged and it is rolling out inconsistently, but it changes how advertisers structure new campaigns.
WP Engine launched Commerce Connect for BigCommerce, keeping a merchant's WordPress front end while BigCommerce runs orders, payments, shipping and tax. It’s pitched at mid-level stores that have outgrown WooCommerce but do not want to leave WordPress.
Whatnot says shill bidding on its live auctions fell nearly 80% in six months, alongside a 45% drop in user reports, though it did not define exactly what the figure counts. A trust-and-safety data point for anyone weighing live-auction channels.
Dimension raised a $1.65 million seed for Seller OS, an agentic system that replaces TikTok Shop's native Seller Center and folds shop operations, affiliate management, ads and support into one place. The company says it can cut operator workload by up to 90%, part of a wave of tooling aimed at the labor-heavy work of social selling.
What DTC’s talking about this week.
The AI conversion bump (and why it doesn’t matter as much as you might think)
Just how much is AI traffic worth chasing. Kurt Elster, who ran the numbers across $274 million in Shopify revenue, pointed out that AI assistants are the single highest-converting channel he tracks, ahead of SMS, Google and email. Yet his own conclusion is not to spend any real money chasing it just yet - with AI still only making up around 0.1% of overall traffic.
Retention is not the same as stickiness
There’s a distinction that is easy to blur, important to understand: retention is whether a customer buys again at all, stickiness is whether they buy again from you rather than a competitor. Jimmy Kim shared a brand whose repeat rate looked mediocre at 41%, but the real problem only surfaced when they saw that 72% of those repeat buyers went on to purchase from a competitor.
Understanding the distinction is key to knowing the right fix to the problem.
Diversify the channel mix, then anchor it
A new set of H1 2026 DTC benchmarks from Common Thread Collective, unpacked on the Ecomm Cowboy show, had operators comparing notes on where growth is actually coming from: median brand growth around 15%, AppLovin delivering strong incremental returns, TikTok Shop spend surging, and Google's return on ad spend climbing even as Meta's efficiency slowly erodes.
The $30 to $60 price band is dead money right now
Nick Shackelford flagged a squeeze in the mid-price tier: shoppers are struggling to justify purchases in the $30-60 range; even if the product itself is providing value. Yet the higher end remains steady, and in the end is propping up the entire market.
On the Pod
In case you missed it, last week we had Shaan Arora, co-founder and CEO of Alia on the Retention Edge podcast.
He had a ton of value to share, from the right way to do personalized list-building, to lessons from the trenches from bootstrapping a Shopify app to an eight-figure acquisition.
It’s a great watch, if you have a few minutes to spare.
Check it out here:
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That’s all for this week.
I’ll be back in touch soon, keeping an eye on what’s happening in the ecommerce and retail world, so you can keep yours on growing your business.
Until then,
Pietro and The Retention Edge Team
PS: shoot me a DM on LinkedIn if you’re interested in what a custom mobile app could do for your brand.