AI shopping tools are favouring larger retailers over independent businesses, raising concerns that technology intended to broaden consumer choice could instead narrow it.
Research by Vaer AI, in partnership with Lightspeed Commerce, analysed 460,000 shopping responses generated by ChatGPT and Google’s AI products. It found that when retailer names appeared in online searches, 97% were large or mid-sized chains, while small and local retailers accounted for only 1% to 4%.
The disparity was not simply a result of AI failing to locate smaller businesses. Large and small retailers each made up about 38% of the sources cited by the systems, yet larger chains received 52% of the top recommendations, compared with 20% for smaller businesses.
In one example involving a shopper looking for office supplies in New York, three of the six sources cited by ChatGPT were small local retailers. Staples nevertheless appeared as the first recommendation.
The gap widened when shoppers moved from general browsing to searching for specific branded products. The proportion of top recommendations going to smaller retailers fell from about 30% to 10%, while the share received by larger businesses rose from roughly 40% to 60%.
AI shopping recommendations and consumer choice
The findings suggest that independent retailers may be visible to AI systems without receiving the prominence needed to attract customers. That could undermine years of investment by smaller businesses in their websites, online listings and search visibility.
Separate research cited in the material found a mismatch between those recommendations and consumer preferences. Half of surveyed consumers said they would be more likely to shop locally if AI made nearby independent retailers easier to discover.
When asked what AI should prioritise, 33% chose small or local businesses, compared with 13% who said large brands should come first.
Adding the word “independent” to a shopping request appeared to alter the results significantly. Vaer AI’s data showed that the share of recommendations given to small and local retailers more than doubled, while the proportion of retailer sources from large national chains fell from about 44% to as little as 9%.
The results indicate that the wording used by consumers can influence which businesses are presented to them. But they also raise questions about whether shoppers should need to know the precise terms required to give independent retailers a fair opportunity.
As AI takes on a greater role in product discovery and purchasing, the central issue is whether its recommendations will reflect what consumers value or default to businesses with the greatest size, familiarity and digital presence.
A retail system in which AI expands discovery would give consumers more relevant options and allow businesses of different sizes to compete. The research suggests that, without careful consideration of how recommendations are made, the technology could instead give the largest retailers an even stronger advantage.
