AI Shopping is Sending Better Leads to Ulta and Etsy. Can They Keep the Customer?

On August 7, Reuters reported that 41% of U.S. consumers used generative AI for online shopping in June, according to Adobe Analytics. The traffic also appeared unusually valuable. Visitors referred by AI services generated 41% more revenue per visit than those arriving through traditional channels. Ulta Beauty, Inc. (NASDAQ: ULTA ) said shoppers arriving through Gemini and ChatGPT showed roughly twice the conversion and purchase intent.

The more important development is where those purchases are being completed. Reuters reported that OpenAI ended its standalone Instant Checkout tool in March and shifted toward product discovery followed by merchant-owned checkout. Etsy, Inc. (NYSE: ETSY ) said shoppers may discover products through ChatGPT but generally return to Etsy to transact.

That creates an attractive arrangement for retailers today. AI platforms can narrow the shopper's choices and deliver a higher-intent visitor, while the merchant still processes the order and retains the opportunity to build a direct relationship. The question is whether Ulta Beauty, Inc. (NASDAQ:ULTA) and Etsy, Inc. (NYSE:ETSY) can preserve that balance as Google, Amazon and other platforms move closer to the transaction.

A shopper who asks a chatbot for a moisturizer suited to sensitive skin or a personalized wedding gift has already done more work than someone clicking a generic search result. The AI can narrow the field before the shopper reaches the retailer, which helps explain why the resulting traffic appears to convert better.

That is particularly useful for Ulta and Etsy because both offer assortments that can overwhelm conventional search. Ulta Beauty, Inc. (NASDAQ:ULTA) sells beauty products whose suitability depends on skin type, shade, price, and routine. Etsy, Inc. (NYSE:ETSY) connects buyers with millions of distinctive listings that are often easier to describe in natural language than to locate through keywords and filters.

Conversational discovery can match a detailed request with a smaller set of products, sending the retailer a shopper who is closer to making a decision. In OpenAI's current merchant-checkout model, that makes AI resemble a high-intent referral channel rather than a replacement storefront.

The missing figure is AI's share of total retail traffic. Revenue per visit can be strong while the channel remains relatively small. The early data establish the quality of the leads, but not yet the scale or long-term cost of acquiring them.

The constructive case is that merchants can benefit from AI discovery without surrendering the transaction.