Week 34 - Shopify's AI Traffic Boom: Stripe's PayPal Play, Kroger's New eCommerce Chief, and TikTok's $50 Billion Half-Year

MaxWelcome to the Checkout Point, your quick dive into this week's eCommerce buzz with me, Alex, powered by Blicket. These twenty minutes pack the latest trends, news, and insights. Let's navigate the digital marketplace together. Ready? Let's go.

RachelHey, everyone. Welcome back to the Checkout Point.

Speaker 3Glad you're here. We've got a packed one today.

RachelOh, man, yeah. Shopify's Q2 numbers just dropped, and shares popped seven and a half percent.

Speaker 3Simply Wall St had that number Friday, but the part that caught my eye, AI-referred sessions up one hundred and ninety-seven percent.

RachelWait, really?

Speaker 3Mm-hmm.

RachelThat's wild, right? We're gonna explore whether that traffic actually converts or just looks pretty on a dashboard.

Speaker 3Numbers looking good is one thing. Converting is a whole different story.

RachelSpeaking of checkout, Stripe is apparently circling a seven-billion-plus dollar deal for OpenRouter.

Speaker 3Anthony Ha broke that one today, and there's chatter about a PayPal-Stripe sale sitting right on top of it.

RachelCoinbase is letting AI agents pay merchants directly now too. It feels like everybody wants a piece of checkout.

Speaker 3Which is basically where we land. Who's actually controlling that moment when money changes hands?

RachelBefore I forget, we're also getting into Kroger's new eCommerce hire and Walmart's robot warehouse setup.

Speaker 3The Jet.com co-founder is walking into Kroger's mess now.

RachelOh, and TikTok shoppers spent fifty billion dollars in six months. Fifty billion.

Speaker 3That's insane. We'll get into what that means for holiday planning.

RachelLots to cover.

Speaker 3So let's start with the one everyone's talking about.

RachelShopify's earnings call shares up, AI traffic way up. Let's see what's actually behind it. Three easy ways to get your questions to us. Check the description for our web form, text us at seven four seven two nine three four six one two, or call the same number to leave a voice question. However you reach out, we can't wait to hear from you. Okay, one number before anything else. One hundred and ninety-seven percent.

Speaker 3Wow. Ninety-seven percent of what?

RachelAI-referred sessions on Shopify stores year over year. Almost triple the traffic.

Speaker 3Triple the traffic from what, though? Like, from ChatGPT sending people to buy a candle?

RachelBasically, yeah. Bethany Lee covered this for Performance Marketing World. Shoppers landing on Shopify stores after an AI assistant recommended the product.

Speaker 3Huh.

RachelAnd it's landing right on top of a really solid quarter. Shopify's stock popped seven and a half percent this week.

Speaker 3Off of what numbers?

RachelRevenue came in at three point five eight three billion. Net income, one point five billion. EPS, a buck sixteen. Simply Wall St had the breakdown.

Speaker 3Okay, that's a real beat, not just a vibes rally.

RachelRight. And guidance for Q3 is low thirties percent revenue growth. Management's leaning hard into AI commerce tools on the call.

Speaker 3So what were analysts actually pressing them on? Because a stock pop doesn't mean the call was clean.

RachelAdam Hagel at StockStory ran through the top five analyst questions, and a chunk of them were basically, "Prove this AI traffic is real revenue, not just noise."

Speaker 3Good, because here's my problem with the one hundred and ninety-seven number.

RachelGo for it.

Speaker 3Sessions aren't sales. I've watched retailers celebrate traffic spikes that converted at basically zero.

RachelOh, I've got the real-world example for this one. We had a client last year, home goods store, and their referral dashboard started seeing this weird spike from a source labeled Unknown AI.

Speaker 3Unknown AI.

RachelMm-hmm.

Speaker 3That's not ominous at all.

RachelRight? Turns out it was an AI shopping assistant pulling their product feed and sending users straight to a specific page, but the attribution was garbage. Analytics couldn't tell if it converted higher or lower than organic search.

Speaker 3So the merchant's flying blind on their best new channel.

RachelExactly. And that's Shopify's whole pitch right now is that they can actually track it.

Speaker 3But does it show up in GMV? Does it show up in take rate? Because if AI traffic is just cheap top of funnel that browses and bounces, that's not a bull case. That's a vanity metric.

RachelSo that's the tension on the call, honestly. Management framed AI-powered commerce, international expansion, and the Shop app as the three growth drivers going forward.

Speaker 3Which is three things, and none of them is that headline number.

RachelSure. But if AI sessions convert anywhere close to organic search, even at a discount, tripling that volume moves GMV. Simply Wall St framed the quarter as the AI outlook changing the bull case on its own, beyond just the earnings beat.

Speaker 3I want to see it in a quarter or two of take rate data before I call the bull case changed. Traffic's cheap to celebrate.

RachelFair. So for merchants listening, what do you actually do this quarter if AI assistants keep sending you traffic?

Speaker 3Clean up your product feed data, titles, structured pricing, inventory accuracy, because an AI agent is reading that feed like a customer would-

RachelMm-hmm

Speaker 3... except it can't ask a follow-up question.

RachelAnd check your attribution setup because half these stores don't even know AI traffic's hitting them until the session count looks weird.

Speaker 3Or until Unknown AI shows up in the dashboard.

RachelExactly that.

Speaker 3So sessions go up. Merchants scramble to track it. Shopify tells the market, "This is the future."

RachelSomebody still has to get paid at the end of that AI-driven click. Who's actually processing that transaction? So who's actually charging the card once an AI agent hits buy?

Speaker 3That's the question everyone's dodging.

RachelNot anymore. Anthony Ha reported for TechCrunch that Stripe is buying OpenRouter, the AI gateway startup, over seven billion dollars.

Speaker 3Seven billion for a routing company?

RachelRouter routes requests between different AI models, kinda like how Stripe already routes a transaction between banks and card networks. Same job, different layer.

Speaker 3So Stripe wants to own the pipe before the agent even decides what to buy.

RachelBasically. Hospice even quoted OpenRouter's own CEO calling the company Stripe for AI. Now Stripe is just making that literal.

Speaker 3Okay.

RachelMm-hmm.

Speaker 3But what's the attach rate once you own the pipe? Owning the pipe doesn't automatically mean owning the checkout.

RachelFair. That number isn't out yet.

Speaker 3And Stripe's shopping spree doesn't stop there.

RachelYou mean PayPal?

Speaker 3PayPal is in talks to sell itself to a group that includes Stripe and Advent International after reportedly turning down a first offer.

RachelPayPal, the company that basically invented online checkout?

Speaker 3Think about what that does to merchants running PayPal as a backup processor. If Stripe owns both rails, where's your leverage on pricing?

RachelFeels like when one company owns the warehouse and the trucking fleet.

Speaker 3To be clear, I lived that. Negotiating gets a lot harder when one vendor holds every card. Right.

RachelMeanwhile, Coinbase just made who's paying even stranger. Businesses can now get paid directly by AI agents.

Speaker 3Come again?

RachelPYMNTS covered it Tuesday. Coinbase Business lets an agent complete a purchase and settle it, no human clicking confirm.

Speaker 3With stablecoins doing the settling?

RachelYeah. PYMNTS also ran a piece this week on AI shopping agents and stablecoins showing up together in checkout. An agent can move money instantly without waiting on card rails.

Speaker 3So the agent shops, the agent pays, and the merchant just trusts the wallet?

RachelFor now, pretty much.

Speaker 3The part that actually worries me, PYMNTS reported platforms are using their own payments data to underwrite merchant credit.

RachelLike Shopify Capital, Amazon Lending?

Speaker 3That model, and it's growing. Your processor sees every transaction, so they can lend against your own cash flow. PYMNTS framed it as merchants shifting from a fee relationship to a lending relationship.

RachelWait, my processor is also my banker now?

Speaker 3Yep. Switch processors, and you might still owe a loan to the one you're leaving.

RachelRough spot to negotiate from.

Speaker 3I watched vendors get boxed into that exact setup managing supply chains at Walmart. The money looks free until you try to walk away.

RachelSo between Stripe owning routing, maybe owning PayPal, and Coinbase settling agent payments and stablecoins, checkout's plumbing is getting rebuilt in real time.

Speaker 3All software, though. None of it moves a box off a shelf.

RachelRight. No matter how smart the agent is, somebody still has to pick the thing, pack it, and get it out the door.

Speaker 3Which is exactly the mess Kroger and Walmart are dealing with right now.

RachelOkay, but none of that payment stuff actually moves a box off a shelf.

Speaker 3Right. So let's go where the boxes actually live. Kroger just named Nate Faust their new EVP and Chief eCommerce Officer.

RachelWait, isn't he the Jet.com guy?

Speaker 3Co-founded Jet.com, then ran Walmart's US eCommerce supply chain for years. StockTitan reported the hire Tuesday.

RachelImpressive. That's a real resume. So why is Kroger pulling him in now?

Speaker 3Because the online side is a mess. Catherine Douglas Moran's piece in the Friday Checkout-

RachelMm-hmm

Speaker 3... called it overly complex, which is a nice way of saying nobody agrees how orders get picked.

RachelCorporate speak for it's broken.

Speaker 3Pretty much. And Kroger's been closing dedicated fulfillment sheds for a while now.

RachelRight. The whole automated warehouse push that didn't pan out the way they wanted.

Speaker 3So Faust walks in with no big dedicated network left standing, and he's got to make orders work inside the stores.

RachelWhich is... I mean, that's the harder version of the problem, right? Picking in the aisle instead of a building designed for it.

Speaker 3Exactly. Labor cost per order for in-store picking runs way above a purpose-built facility. That's the number nobody says out loud on the earnings call.

RachelOkay, now flip it. What's Walmart doing?

Speaker 3Walmart's putting Symbotic's system directly inside a store.

RachelWait, inside the store? On the floor?

Speaker 3Max Garland reported it. It's called SymMicro, and Walmart expects it to come to life in about six months.

RachelSo robots do the picking instead of a person walking the aisle.

Speaker 3That's the bet. Automate the labor heavy part and cost per order drops-

RachelRight

Speaker 3... because a machine doesn't clock out at hour six.

RachelDoes the robot complain about the wheel that won't turn straight, though?

Speaker 3No, that's the whole point. No wheel problems.

RachelSo one company's compressing headcount with hardware, the other's hiring a human to fix a broken system.

Speaker 3Right. And that's the real test for grocery eCommerce. Can the economics work at all without automation carrying the weight?

RachelGrocery margins are already thin. What, low single digits?

Speaker 3Single digits, yeah. Stack a slow manual pick on top of that, and every online order bleeds a little.

RachelSo Kroger's betting Faust can build the discipline Walmart's trying to buy with robots.

Speaker 3One's a people bet, one's a hardware bet. Only one of them scales without adding headcount every time volume climbs.

RachelAnd volume's about to climb. Holiday traffic's coming.

Speaker 3Which is exactly when a shaky pick network gets exposed, and when consumers start showing us where they're actually spending.

RachelSpeaking of spending, I've got a number that's gonna make you sit up. Shifting gears completely, TikTok shoppers spent Fifty Billion dollars on the platform in six months.

Speaker 3Wait, Fifty Billion? That's not pocket change. That's a whole retailer's revenue.

RachelAnna Iovine reported it this week, and the estimate is that number doubles by the end of the year.

Speaker 3So TikTok's daring us to still call it social media.

RachelIt's discovery now. People aren't searching for products, they're scrolling into a purchase.

Speaker 3Which flips holiday planning since we're staring down Q4.

RachelArmando Roggios holiday predictions piece backs that up. He's calling for earlier promos this year, not just Black Friday week.

Speaker 3Makes sense. Everyone's racing to beat scroll fatigue before the actual holiday hits.

RachelAnd Digital Commerce 360's coverage of the 2026 season flags AI-assisted shopping showing up earlier in the funnel, people building wish lists in October. So basically, retailers need holiday content live before Halloween now.

Speaker 3That's the read. If shoppers are asking AI for gift ideas in October, you want your product indexed by then.

RachelSo Shopify's AI traffic bump from earlier this hour, this is the holiday version three months ahead of schedule.

Speaker 3Exactly the kind of thing merchants need to plan inventory around, not just ad spend.

RachelSpeaking of inventory, didn't Dani James have something on that?

Speaker 3Yeah. Her reporting says NRF import data shows port volumes already peaked because retailers front-loaded stock ahead of new tariffs.

RachelWait, warehouses are already full before October even starts?

Speaker 3Pretty much. They're betting big on this holiday, which is risky if demand doesn't show up to match it.

RachelAnd demand's the weird part right now. What was that PYMNTS piece on spending?

Speaker 3July retail sales dipped, but PYMNTS framed it as consumers picking their spots, not pulling back across the board.

RachelSo people are still buying, just choosier about where.

Speaker 3Which means you can't discount everything and hope. You need to know which categories still have real appetite.

RachelAnd if that inventory doesn't move, you're stuck discounting your own margin come January.

Speaker 3Derrick on clearance city.

RachelFeels less like a shopping day now, more like a whole scrolling season.

Speaker 3Which is exactly why get ready by Black Friday isn't a plan anymore.

RachelOkay, so if I'm running a store, what do I fix in the next six weeks?

Speaker 3Three things. Get some kind of TikTok shop presence live, even small, because discovery's moving there.

RachelTwopull your promo calendar forward. If everyone's launching early, showing up late means nobody sees you.

Speaker 3And three, audit inventory against what's actually selling, not what you stocked for tariff timing.

RachelBecause a warehouse full of the wrong stuff is worse than no stock at all.

Speaker 3TikTok, timing, and matching product to the holiday you're actually getting.

RachelSimple to say, hard to pull off in six weeks.

Speaker 3Welcome to Q4.

RachelOkay, one more number before we close out. July retail sales.

Speaker 3Hit me.

RachelPYMNTS ran a piece calling it a deliberate reset in household spending.

Speaker 3Right, and they put it well. Consumers are still buying, just in select categories.

RachelSo it's not that people stopped spending, it's where they're spending.

Speaker 3Groceries, essentials, that stuff holds up. Discretionary categories are the ones taking the hit.

RachelWhich, if I'm a merchant, that's a flashing yellow light heading into Q4.

Speaker 3Totally. Because if people are already rationing in July, the holidays aren't gonna magically loosen the wallet.

RachelDigital Commerce 360 actually has a whole section tracking trends shaping this holiday season.

Speaker 3Yeah, and Armando Roggio's been forecasting holiday shopping since 2013 for that outlet.

RachelSince 2013? That's what, over a decade of calling this stuff?

Speaker 3Right. I couldn't get the specifics on his 2026 picks, but the industry chatter keeps landing on the same idea. Compressed shopping windows, fewer browsing days, more decisive buying.

RachelSo less window shopping, more sniping the deal.

Speaker 3Kind of, yeah. Less, "Maybe I'll come back to this cart."

RachelOkay, but here's my question. Does that favor big retailers who can move fast or smaller shops who know their customer better?

Speaker 3Honestly, probably both for different reasons. Big guys win on logistics. Small guys win on trust.

RachelFair, and trust is cheap to build now compared to like ad spend.

Speaker 3Which loops back to everything else we covered today. The AI traffic, the TikTok money, the warehouse automation.

RachelYeah. It's all the same fight, just different rooms in the building.

Speaker 3Every room somehow connected to whatever's happening at Checkout.

RachelNo kidding. So if you're a merchant with two months left-

Speaker 3Watch your discretionary line first. If customers are already trimming there in July, don't stack inventory assuming the holidays fix it.

RachelAnd don't blow the whole budget on blanket discounts either.

Speaker 3Right. Segment the promos. Figure out which items actually move without a markdown and protect margin on those.

RachelBasically, prove you're worth the click before you ask for the sale.

Speaker 3Exactly that.

RachelRetail in 2026, every piece of this business getting rebuilt at once.

Speaker 3And every piece somehow feeding back into the same checkout page.

RachelA lot to sit with heading into the fourth quarter.

Speaker 3A lot.

RachelOkay, so today's biggest brain twister for me, that unknown AI traffic source just showing up on a merchant's dashboard.

Speaker 3And nobody could tell if it was a customer or a bot pretending to shop.

RachelRight? Attribution's officially broken.

Speaker 3Which is why I'm not calling Shopify's bull case changed yet. Show me the take rate data first.

RachelFair. Fair.

Speaker 3And the Stripe OpenRouter move ties right into that. If one company owns the AI gateway and the payment rail-

RachelYour negotiating leverage kind of evaporates.

Speaker 3Exactly.

RachelSo, uh, takeaway for the week, traffic's cheap to celebrate. Margin isn't.

Speaker 3Right. Protect it before Q4 hits.

RachelGet on TikTok Shop, move your promos up, and actually audit inventory instead of guessing.

Speaker 3Simple to say, harder to do.

RachelNothing on this show ever is.

Speaker 3Warm and a little wry, carrying the geeky but grounded energy of the episode into a relaxed sign-off.

RachelYeah, seriously. Takes, like, ten seconds.

Speaker 3We'll be back next week with more numbers to argue about.

RachelAlways. Thanks for hanging out with us.

Speaker 3Take care, everyone.

RachelBye, all.