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Microsoft Unveils Agentic AI Solutions for Retail

In a groundbreaking announcement on January 8, 2026, Microsoft Corp. introduced a suite of agentic AI solutions engineered to revolutionize retail operations through intelligent automation. The new capabilities are intended to streamline every aspect of retail, from merchandising and marketing to store operations and fulfillment, helping businesses increase efficiency and enhance customer engagement.

The essence of these innovations lies in their ability to transform fragmented workflows into cohesive processes across the retail value chain. By offering context-aware tools that can proactively assist employees, Microsoft is fostering a transition toward a unified, intelligence-driven operating framework tailored to the fast-paced nature of modern retail. As Kathleen Mitford, Corporate Vice President of Global Industry at Microsoft, aptly stated, retailers that integrate comprehensive intelligence throughout their operations are poised to thrive in a competitive marketplace.

The Rise of AI-Driven Consumer Engagement

The impact of Microsoft’s solutions is evident in the burgeoning trend of AI-driven e-commerce. Adobe has reported an astonishing 693% increase in AI-driven e-commerce traffic during the 2025 holiday season compared to the previous year. This surge underscores the vital connection between authentic brand engagement and a seamless purchasing experience, enabling retailers to capitalize on consumer intent effectively.

A notable feature, Copilot Checkout, allows merchants to engage with customers effortlessly as they conclude their purchases, enhancing the shopping process without redirecting them to external sites. This advancement not only eliminates potential friction but also ensures that merchants maintain their position as the merchant of record. The current offerings on platforms such as Copilot include popular brands like Urban Outfitters, Anthropologie, and Ashley Furniture, with plans for further collaborations.

According to Rafe Colburn, Chief Product and Technology Officer at Etsy, integrating Etsy’s diverse product range into Copilot Checkout makes it simpler for buyers to discover unique offerings at the critical moment that intention turns to action. Similarly, Shopify’s merchants can expect to benefit from automated enrollment in Copilot Checkout, allowing for a seemingly instantaneous transition from shopper intent to completed transactions.

Enhancing Loyalty and Conversions with Intelligent Agents

In addition to Copilot Checkout, Microsoft is reinforcing its agentic commerce strategy by launching two key innovations aimed at personalizing the shopping experience: Brand Agents and a customizable shopping agent template within Copilot Studio. These solutions are designed to foster engagement and conversions by providing retailers with the tools necessary to deliver tailored, conversational shopping experiences.

Brand Agents, available to Shopify merchants, enable brands to communicate authentically through every digital interaction. This turnkey solution is trained on a brand’s catalog, equipping it to answer detailed product inquiries in a manner consistent with the brand's voice. The personalized shopping agent template offers extensive customization options, empowering retailers to create a distinctive shopping journey that resonates deeply with customers.

Jenny Jidborn, IT Manager at Kappahl Group, emphasizes the potential of Microsoft’s shopping agent template to enhance the customer experience which, in turn, supports conversion rates and minimizes returns. Through such advanced capabilities, retailers can offer thoughtful product recommendations and outfit suggestions, improving decision-making for buyers.

Streamlining Operations and Empowering Store Associates

Retailers continue to face challenges, particularly with turnover rates and the shortage of trained frontline staff. To address these issues, Microsoft’s latest agentic AI solution offers intuitive, on-demand support for employees, empowering them to better serve customers.

The Store Operations Agent Template, now in public preview, provides store associates with a natural language interface capable of delivering real-time answers regarding inventory and policies, while also proactively managing workflows. By analyzing sales trends, foot traffic, and external factors such as weather, this innovative tool provides actionable insights that help leaders enhance operational efficiency.

John Khoury, Group CTO at Strandbags, shared insights into how the Store Operations Agent Template furthers their AI strategy by equipping teams with live insights that can be acted upon, which allows them to maintain exceptional service delivery amid a rapidly evolving retail landscape.

A New Era of Retail Automation

These new agentic AI solutions from Microsoft represent a significant advancement in the retail sector, offering disruptive tools that enable businesses to remain agile and responsive to market changes. By automating critical processes such as inventory management and product onboarding, organizations can redirect their focus towards strategic innovation. Coupled with Microsoft's commitment to responsible AI use, these solutions not only promise improved operational metrics but also strengthen customer relationships, establishing a robust foundation for future growth.

To explore Microsoft’s retail agent solutions, visit the Microsoft Marketplace or learn more about their offerings at the NRF 2026 conference, showcasing these advancements at booth #4503. Microsoft continues to lead the charge in AI technology, striving to empower individuals and organizations across the globe to achieve more.