Welcome back to the Retention Edge.
Once again, I’m bringing you the latest in ecommerce, marketing and retention, helping you stay ahead of the game.
This week: the AI-in-commerce story finally has receipts, and they say two things at once: AI is still a very small part of your traffic - and at the same time, it’s the fastest-growing, highest-converting, most new-customer-heavy channel anyone has measured.
Alongside that, a cluster of brands are crossing or chasing $1 billion, and there’s a quiet shift in how creator marketing gets used.
In this edition:
Shopify posts a "monster" Q2 and the stock rips, with every headline line growing more than 30%.
Google's AI answers now show up in 43% of searches, and the discovery layer is moving above the blue links.
The first hard portfolio data on the AI traffic wave: tiny today, growing sixfold a year, converting far above average.
TikTok is testing an Amazon Prime-style membership to stop shoppers finishing their carts on Amazon.
Crocs posts its first-ever billion-dollar quarter, carried by direct-to-consumer as wholesale softens.
Creator marketing grows up, moving from awareness experiment to a measured, full-funnel channel.
Let’s get into it.
AI and Commerce
Google's AI Overviews now appear in 43% of searches, up from 15% a year ago, according to Similarweb data reported by TechCrunch.
This is a huge threat for publishers and content-driven sites, because Google’s eating up the answers and conversations that used to happen on-site. For Merchants? It’s a different story.
AI overviews are taking over shopping queries at the same rate - someone’s still got to get the sale, but the way people get there is changing fast.
The logical next step is traditional search converging with AI mode, which has even bigger implications for merchants - last week we reported that AI mode shows 95% fewer products for shopping queries, which massively decreases the surface area you have to show up in front of organic searchers.
On its Q2 call, Shopify pushed back on the idea that AI is eating search. President Harley Finkelstein said AI-driven traffic and orders to Shopify stores both tripled year over year, and that it is adding demand rather than cannibalizing it, especially for smaller merchants whose products AI can match to specific buyer intent.
The publisher story and the merchant story are diverging: the same technology that shrinks a blog's clicks can hand a store a qualified buyer.
Ethercycle's State of Ecommerce 2026 report puts numbers behind the AI hype, drawing on 94 million sessions and $274 million in revenue across 10 Shopify stores over 24 months.
The headline: AI referrals are still a sliver of total traffic, yet they grew sixfold year over year, convert well above the portfolio average, and skew heavily to first-time buyers, with about 85% of AI-referred revenue coming from new customers.
For contrast, the Shop app quietly drove $4.8 million, dwarfing AI referrals today. The practical takeaway is to see AI as a small, fast-compounding new-customer channel, not a reason to rebuild your site around it this quarter.
A useful counterweight to the agentic-commerce noise. On DoorDash's Q2 call, where revenue hit $4.5 billion, CEO Tony Xu said shopping agents have not moved the needle on orders yet, because the AI platforms are focused on enterprise tools rather than physical fulfillment.
Where AI is paying off for DoorDash is inside the business, in its ordering assistant and operations. It’s the same pattern showing up everywhere: the storefront revolution is still theoretical, the back-office one is already banking savings.
OpenAI's ad program, which began testing in February across seven countries, works differently from what advertisers are used to.
Instead of bidding on keywords, ads are matched to the context of the conversation, and advertisers get far less control over delivery, targeting, and data than they have on Google or Meta.
The early lesson for anyone eyeing the channel is that you structure campaigns around the prompts and problems your customer brings to the chat, not around a keyword list.
Building on its product-feed campaigns, OpenAI is adding a Google Shopping-style carousel that shows several products side by side in a single ChatGPT placement, timed for the Q4 holiday run.
The direction of travel is clear: ChatGPT is hardening into a shopping-ads surface, which means the same feed hygiene that wins you placement in Google Shopping is about to matter in a second place.
Jeff Bezos says Amazon's in-house AI silicon, built through Annapurna Labs into the Trainium and Inferentia chips, is on track to become a foundational business alongside Marketplace, Prime, and AWS, with Amazon anticipating more than $20 billion in revenue from it.
Platform Ecosystem
Shopify's Q2 earnings are out. Revenue rose 34% year over year, gross merchandise volume climbed 32% to more than $115 billion, and free cash flow hit $654 million at an 18% margin, with every headline line growing more than 30%.
President Harley Finkelstein called it a "monster quarter" and tied the momentum to AI expanding what merchants can do. After months of the stock sliding on fears that AI tools would erode Shopify's edge with small businesses, the beat and a strong Q3 outlook sent shares sharply higher.
TikTok is trialing a paid membership called TikTok Shop Plus, bundling free shipping, discounts, and coupons at monthly price points reported at $6, $10, and $15.
The goal is to stop the pattern where people discover a product on TikTok and then finish the purchase on Amazon. With TikTok's US ecommerce sales projected to reach $23 billion this year, a loyalty layer changes the math for brands selling there, because a membership base rewards repeat purchase and raises the cost of letting Amazon capture the checkout.
Shopify merchants can now run WhatsApp marketing campaigns natively from Shopify Messaging, using pre-built templates or custom content, pulling media from the product catalog, and paying only for the messages they send.
For brands with international audiences, where WhatsApp is the default inbox, this is a first-party owned retention channel that sits right next to the store instead of behind another vendor.
eBay's revenue and gross merchandise volume both rose 15% last quarter, driven by authenticated luxury, collectibles, auto parts, and AI-assisted listings, with its $1.4 billion Depop acquisition aimed at younger resale shoppers.
The strategic tell is that eBay is winning on trust and category depth in specialized niches rather than trying to out-ship Amazon. For smaller brands, that is a replicable playbook: own a category on authenticity, not on delivery speed.
The $1B Club
Crocs crossed $1 billion in quarterly revenue for the first time, with direct-to-consumer sales up 13% to $559 million even as wholesale declined at both of its brands.
The Heydude brand stayed a drag, with revenue down about 6%. The quarter is a clean illustration of why operators keep pushing to own the customer: when wholesale wobbles, the direct channel is what carries the number.
True Religion is chasing $1 billion in revenue, projecting roughly $550 million this year, up from about $470 million last year, and it is getting there by stacking channels rather than betting on one.
The plan runs from a much larger influencer program and a TikTok Shop presence to doubling its store count and supplying off-price accounts like TJ Maxx. It’s a reminder that at scale, brand growth tends to look like disciplined multi-channel distribution, not a single viral moment.
Hailey Bieber's Rhode, now under E.l.f. Beauty, moved $27 million in direct sales in one day on a summer collection launch and is heading into 19 more countries through Sephora.
Its parent is openly floating Rhode as a candidate for the fastest beauty brand to reach $1 billion. The lesson underneath the celebrity number is old-fashioned: a tight product line plus genuine demand engineering plus real retail distribution still sets the ceiling.
Marketing and Retention
New Modern Retail research, based on 125 marketers, finds brands pushing creator partnerships well beyond awareness into performance and full-funnel roles, with more attention to success metrics and the challenges of measurement.
The signal for operators is that creator spend is moving out of the experimental budget and into the channel budget, which means it now has to carry a number.
Gap Inc., Staples, and Starbucks are formalizing employee-generated content, from staff affiliate links that pay commission to structured creator programs, after years of treating employees posting about work as a risk.
It’s one of the few genuinely cheap content engines a brand already has on payroll, and it reads as more authentic than polished brand video precisely because it is not.
Also this week
Kroger's AI shopping assistant launched with ads built in, putting sponsored product listings inside the assistant from day one and targeting them with its loyalty data.
Klaviyo acquired Elias Torres' agency, another sign of the retention stack consolidating around a few core platforms.
Cole Haan launched luggage, repositioning itself as a travel brand and using category expansion as a growth lever.
What DTC’s been talking about on social media this week.
AI is a rounding error and the best channel you have, at the same time.
Kurt Elster lined up his 94-million-session study against Shopify's Q2 call and got the same multipliers: tiny share of traffic, far higher conversion, mostly new customers.
"Almost nobody can point to the line in their P&L that AI actually moved."
Andrew Faris went looking for real examples, and the wins landed in operations and headcount, not the storefront.
Margin is the quiet obsession while everyone else talks AI.
Ron, a DTC apparel operator, posted an unglamorous teardown of gross-margin work: COGS, freight, and the 3PL variables actually worth tracking.
Watch First Conversion, not All Conversions, on Meta.
Rok Hladnik on the one metric switch that stops you overspending on warm audiences you would have converted anyway.
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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.