E-commerce software provider Shopify is experiencing substantial benefits from the increasing public adoption of AI-powered search.
During the company’s second-quarter earnings call, Shopify President Harley Finkelstein articulated that AI has emerged as a “complement to search, rather than a substitute for it,” particularly bolstering the long tail of e-commerce, which encompasses the smaller merchants forming the bulk of its client base. The company indeed credited its strong earnings performance and impressive revenue growth, at least in part, to AI search.
This positive impact stands in stark contrast to the challenges AI presents for online publishing, where AI summaries have resulted in a measurable decline in click-through rates, consequently reducing traffic and impacting advertising revenues.
Instead, Shopify perceives AI as a significant advantage for its business. The company disclosed that AI-driven traffic and orders directed to Shopify stores tripled year-over-year in the second quarter.
Crucially, this growth was not a result of AI cannibalizing traditional search. “In fact, search remains one of our largest sources of buyer traffic to our merchants, and it’s still growing,” Finkelstein informed analysts during the call. He further added, “Traditional search sessions are up 1.3x over the past two years, holding roughly a third of all storefront sessions.”
The e-commerce platform reported robust financial results for the quarter, with revenue increasing by 36% year-over-year to $3.6 billion, exceeding Wall Street’s projection of $3.4 billion. Gross operating profit also saw a 31% rise to $1.71 billion, surpassing analysts’ expectations of $1.63 billion.
The company provided further insights into why AI search has proven so effective for its operations.
“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,” Finkelstein elaborated.
He offered an illustrative 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.”
In essence, AI’s capacity to search across numerous dimensions to identify the optimal product for users is translating into improved conversion rates for merchants.
“Buyers’ shopping journeys are being compressed as 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,” Finkelstein added.
Furthermore, the company highlighted that 75% of AI-attributed purchases in Q2 originated outside the top 100 categories, a segment Shopify refers to as its “sweet spot.”
Additionally, the company suggested that Shopify is well-positioned to benefit from AI playing a more prominent role in transactions, largely due to its established and trusted checkout experience.
Shopify also emphasized its active collaboration with AI tools and agents, having developed connectors for prominent platforms such as Claude, ChatGPT, Perplexity, Manus, Replit, and Vercel. It also supports vibe-coding platforms like Lovable, which offer merchants flexible options for building on Shopify.
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