Retailers Cut Cross-Channel Spend to Fund AI Assistants

Retailers have a new top spending priority. AI shopping assistants now lead the list of digital capabilities merchants plan to invest in over the next three years, according to a PYMNTS Intelligence report commissioned by Visa Acceptance Solutions. Thirty-seven percent of the 1,185 merchants surveyed across the U.S., Brazil and the United Arab Emirates named AI assistants as their planned investment. That is the highest share for any single digital feature.

The same report shows a clear trade-off. Investment in cross-channel shopping tools, stored payment methods and mobile apps has declined. Merchant support for cross-channel shopping dropped nine percentage points even though consumer demand for it held steady. Support for stored payment methods also fell while consumer demand edged higher. Mobile app investment declined even as demand for those apps increased.

Retailers are not abandoning those features outright. They are becoming more selective about where development dollars and engineering hours go. The shift suggests a reallocation of limited technology budgets rather than a wholesale retreat from digital commerce.

The consumer side reinforces the logic. Forty-seven percent of online shoppers used some form of AI during their most recent purchase, the survey found. They used it to compare products, research purchases and gather product information before checking out. Another 64% said they expect to use AI shopping agents within two years. Those numbers help explain why merchants are chasing AI. Product discovery is a competitive battleground, and AI is becoming the next channel where retailers fight for attention.

The same data also highlights where existing capabilities fall short. Consumer demand continues to exceed merchant availability for several established features. Price matching has the largest gap: 61% of consumers want it, only 47% of merchants offer it. Mobile product locators, digital coupons, loyalty programs and free shipping all show similar shortfalls. The gaps are especially wide among millennials, parents and high-income shoppers – the groups that account for a disproportionate share of digital commerce activity.

Those gaps raise a practical question. If retailers are cutting investment in cross-channel and payment features while demand for those features remains steady or rises, they risk losing customers who value convenience more than AI-assisted discovery. The PYMNTS report noted that shoppers still evaluate retailers on the ease of completing a purchase across digital and physical channels. New capabilities do not erase old expectations.

The pattern is not new. Technology budgets follow perceived returns. When a new tool promises higher conversion or customer lifetime value, older tools get defunded. The risk is that the old tools still matter for retention. Cross-channel shopping, stored cards and mobile apps are not mature in the sense that they stop needing work. They need ongoing investment to keep the experience smooth. A retailer that pulls money from those areas to fund AI assistants may see checkout friction rise even as discovery improves.

The report does not say whether the balance is right. It simply observes the reallocation in progress. The next few quarters will test the thesis. If AI assistants lift conversion rates enough to offset any drop in cross-channel satisfaction, the shift will look smart. If consumers start abandoning carts because checkout friction returns or stored payment methods break, retailers will find themselves playing catch-up.

For a trader watching the retail tech space, the list of exposed names is broad. Every retailer with a digital commerce component faces this trade-off. The winners will be the ones who manage the transition without letting the basics slide. The losers will be the ones who assume AI replaces infrastructure.

Two signals matter. First, store-level conversion and cart-abandonment rates at large retailers over the next two quarters. If abandonment rises while AI assistant adoption climbs, the trade-off is not working. Second, earnings call mentions of cross-channel and payment feature investment. If retailers start acknowledging renewed spending on those areas, the AI-first push may be slowing.

No single data point answers the question. The gap between consumer demand and merchant support for price matching and stored payments is wide enough that it will show up in operational metrics before it shows up in surveys.