Machines are making decisions that only people made until now.
This week is the retail industry’s largest trade show, the National Retail Federation Big Show in New York. In general, the show is about thousands of technology vendors, big and small, offering services to retailers.
The one phrase I heard more than any other is “AI Agent.” That technology was everywhere. If you’re not selling it or buying it, you’re talking about it.
Simply put, an AI Agent is software that uses artificial intelligence to interact with its environment, learn from its experience and perform tasks. (My fellow Forbes contributor Doug Laney gives a more fulsome definition of the different types of AI agents here.)
That last part, performing tasks, is what differentiates AI agents from other technology. An AI agent can make decisions and implement them on its own. To make that a little less scary, changes made by an AI agent can be set up so that they’re always subject to human approval.
Like this:
Target hires thousands of people for fourth quarter holiday sales who don’t get the training that more permanent employees receive. Target uses Zebra Technology to answer many of those employees’ questions and fix problems they identify.
For example, if they can’t find something, the software tells them where it should be and if it’s not on the shelf, the software implements a move from the store room or an order for replenishment from a vendor.
Ordering a box to be moved from the back room or a placing an order with a vendor is what makes the software “agentic.” (Remember that word, everyone is using it.) The ability to make a decision and take an action is what defines an AI Agent. Like the name says, it acts as your agent.
Mark Chrystal, Co-Founder of Profitmind, told me that with an AI agent, “you give it a goal and you give it access to the tools to solve [for that goal] and it figures out how to meet your goal.”
Profitmind takes information about retailers or brands and their strategy and competition. The AI Agent tells you what it found and what you should do as your next tactic. Profitmind is being used by Home Depot, Crocs, Batteries Plus, HEB and others. It says Profitmind clients average an increase in revenue of 21%, gross profit of 14% and a payback of Profitmind’s fees in one month.
Matt Pavich, Senior Director of Strategy and Innovation at Revionics, a subsidiary of software company Aptos, explains that AI agents are not about asking a question and getting an answer, they’re about doing something.
Pavich says you could ask it to “help me match price with Walmart on my top 50 skus or beat Walmart by 2% or be above Walmart on the highly elastic items.” It could then tell you what prices you needed to be at and it could measure how unit sales, profit, supply chain and customer loyalty would be impacted by the implied price changes. With your permission, it implements the price changes.
An AI agent is not the solution for everything and especially not for a customer’s store experience. Nikki Baird, Vice President of Strategy and Product at Aptos, explains that having AI agents service consumers in a store, “automates the experience away” and it’s a poor way to treat customers.
And of course, there is controversy. According to fashion matching software company Findmine, some sites are blocking AI agents from looking at their data to protect their content or to prevent their site from being swarmed by AI agents. Findmine thinks that kind of blocking is disadvantageous and ultimately makes a brand less available to consumers.
No one I talked to thinks AI agents are just a fad. But there are a few caveats.
It’s going to take time. Baird of Aptos told me that “it won’t be widely adopted in 2025,” some people will use them but it’ll be in fits and starts,” she said.
But when I asked people what retail technology we’ll be talking about next year, they typically said, “more agents.” No one thought it was going away.
One thing I didn’t hear talked about at the Big Show in New York was the cost of AI. But Zach Kass, a futurist who spoke at The Pet Industry Leadership conference in Florida this week, explained that the cost of units of AI are declining much faster than computing power has typically dropped in the past.
According to Kass, the cost of using GPT 4 declined by over 93% between 2023 and 2024 (to about 5/10,000th of a penny for a word) and that is driving even more rapid adoption.
When I asked people what technology will come after AI agents, they said, “AGI,” which means artificial general intelligence. That’s a theoretically possible stage where, according to Wikipedia, “AI systems could match or surpass human cognitive abilities across any task.”
Whether that will really happen, whether it’s the really the next stage of technology and when it could happen, well, no one is predicting any of that.
What is clear is that your experience in stores and shopping online is going to be heavily impacted by AI agents that are performing tasks in the background without being told.
