Shopify Says AI Search Is Driving More Traffic and Sales, Not Replacing Google

E-commerce software maker Shopify is reaping significant benefits from the rise of AI-powered search, according to the company’s second-quarter earnings call. President Harley Finkelstein emphasized that AI has become a “complement to search, rather than a substitute for it,” with particularly strong gains in the long tail of e-commerce—including the smaller merchants that form the majority of Shopify’s customer base. The company partly attributed its earnings beat and soaring revenue to the impact of AI search on its platform. This stands in stark contrast to the experience of online publishers, where AI-generated summaries have caused measurable declines in click-through rates, reducing traffic and squeezing advertising revenues. For Shopify, however, AI is proving to be a boon. The company reported that AI-driven traffic and orders to its merchants’ stores tripled year-over-year in the second quarter. Crucially, this growth has not come at the expense of traditional search. “In fact, search remains one of our largest sources of buyer traffic to our merchants, and it’s still growing,” Finkelstein told analysts. “Traditional search sessions are up 1.3x over the past two years, holding roughly a third of all storefront sessions.” Shopify’s overall results were strong, with revenue climbing 36% year-over-year to $3.6 billion—exceeding Wall Street’s $3.4 billion forecast. Gross operating profit rose 31% to $1.71 billion, also beating analyst expectations of $1.63 billion. Finkelstein delved into why AI search is so effective for Shopify’s ecosystem. “While search engines rank by popularity against a handful of keywords, AI agents make multiple calls into Shopify’s catalog, working with richer structured data to match products with the buyer’s specific intent, rather than just keywords,” he explained. He illustrated the point with a practical example: “When a buyer asks an AI assistant for the best car seat that fits three across a sedan, traditional search focuses on the keyword ‘car seat.’ An agent, however, understands the actual need, the dimensions, the vehicle type, and the fact that they need three. It searches across all of those constraints at once to find the product that actually works, not just the one that ranks highest.” The ability to search across multiple dimensions and deliver more precise product matches is resulting in higher conversion rates for merchants. Finkelstein noted that shopping journeys are becoming more direct: “Half of all AI-referred sessions are landing directly on a product description page. That is 2.5 times more than what we see with traditional search.” Indicative of AI’s reach, 75% of AI-attributed purchases in Q2 occurred outside the top 100 product categories—what Shopify calls its “sweet spot.” This suggests AI is helping surface niche and long-tail products that might otherwise be overlooked. Looking ahead, Shopify believes it is well-positioned to benefit as AI takes on a larger role in transactions, thanks to its trusted checkout experience. The company is also actively building for this future, having developed connectors to major AI tools and agents, including Claude, ChatGPT, Perplexity, Manus, Replit, and Vercel, as well as vibe-coding platforms like Lovable, enabling merchants to build on Shopify in new and flexible ways.

via TechCrunch AI