Microsoft expands Copilot into online commerce with in-chat checkout and seller tools

New Delhi: Microsoft has announced a set of agentic AI capabilities for the retail sector, introducing new tools that span online commerce, merchandising, store operations and fulfilment. The updates position Copilot and Copilot Studio as platforms supporting both consumer-facing shopping journeys and internal retail workflows.

The company said the new solutions are designed to apply intelligent automation across the retail value chain, addressing fragmented workflows in areas such as merchandising, marketing, store operations and fulfilment. According to Microsoft, the tools are intended to support faster decision-making and more coordinated execution across retail teams.

Kathleen Mitford, Corporate Vice President of Global Industry at Microsoft, said, “The retailers that thrive will be the ones that unify their business with intelligence that reaches every corner of the value chain. With Microsoft’s agentic AI, retailers can automate what slows them down and amplify what sets them apart, enabling faster decisions and stronger customer relationships while building operations ready for whatever comes next.”

Copilot Checkout allows shoppers in the US to complete purchases discovered within Copilot without being redirected to external websites. The feature supports product discovery, comparison and payment within a single conversational interface. Microsoft stated that merchants remain the merchant of record, continuing to manage payments, fulfilment and customer data.

Copilot Checkout is available in the US on Copilot.com, with PayPal, Shopify and Stripe supporting payments. Participating retail brands include Urban Outfitters, Anthropologie and Ashley Furniture, along with independent sellers on Etsy.

Rafe Colburn, Chief Product and Technology Officer at Etsy, said, “At Etsy, our job is to make it simple for people to discover the special things our sellers create. By bringing Etsy’s unique inventory to Copilot Checkout, we’re meeting buyers at the moment intent becomes action. With one integration, we open the door for our sellers to show up across new surfaces without extra work. It’s a straightforward way to connect their creativity to high-intent buyers, and to keep commerce human as shopping evolves.”

Shopify merchants will be automatically enrolled in Copilot Checkout following an opt-out window. Mani Fazeli, VP of Product at Shopify, said, “Copilot Checkout can move a customer from intent to transaction in seconds, all without leaving the conversation. It’s the merchant’s checkout powered by Shopify, seamlessly fitting into the customer’s experience. This is the modern power of Agentic Storefronts: personalization and relevance, trust and accuracy, speed and convenience.”

Alongside checkout, Microsoft introduced tools focused on personalised shopping experiences. These include Brand Agents for merchants on the Shopify platform and a personalised shopping agent template within Copilot Studio. Both are designed to support conversational product discovery and recommendations across digital touchpoints.

Brand Agents are trained on a retailer’s product catalogue and can respond to detailed product queries using brand-specific tone and context. The personalised shopping agent template offers a more configurable framework, enabling retailers to tailor experiences across web, mobile and in-store environments.

Jenny Jidborn, IT Manager at Kappahl Group, said, “Microsoft’s personalized shopping agent template gives us a flexible foundation to explore AI-powered guidance in a way that fits our brands, improves the customer experience and helps customers get inspired. It supports our ambition to improve conversion while also reducing returns through better decision support at the product level, ultimately helping customers feel more confident and satisfied with their choices.”

Microsoft also announced the public preview of a catalogue enrichment agent template in Copilot Studio. The tool automates tasks such as product onboarding, categorisation and error resolution, and can extract product attributes from images while incorporating social insights. The company said this is intended to convert incomplete or unstructured product data into formats that support discovery and recommendations.

David Torrecilla, Head of Innovation at Guess, said, “With Microsoft’s catalog enrichment agent template forming the backbone of our personalized shopping experiences, we can turn product details into meaningful insights that help shoppers discover styles in real time, receive tailored recommendations and explore complete looks. It’s a powerful step forward in our commitment to delivering service that’s as dynamic as our brand.”

In physical and hybrid retail environments, Microsoft is introducing a store operations agent template, also in public preview. The tool provides store staff with a natural language interface to check inventory, review store policies and manage workflows. It can analyse internal data such as sales trends and footfall alongside external factors including weather, local events and holidays to support operational decisions.

John Khoury, Group CTO at Strandbags, said, “With the store operations agent template, we’re advancing our AI strategy by enabling teams to act on live store insights. The flexibility to shape the agent around our specific needs ensures our teams can focus on delivering exceptional service while we stay ahead in a fastmoving retail world.”