AI Shouldn't Shrink Retail Marketing Budgets. But It Will Force New Thinking

I once had a boss I thought was kind of ridiculous. A larger-than-life persona topped off with a pair of ludicrous luxury sneakers. You can imagine my surprise when, six months later, I bought the same pair.

Those shoes, which I whimsically tried on following a small windfall at work, were comfortable and looked amazing. Two weeks later, when the world shut down for COVID, they took residence in my closet — unworn — only to make their debut when I spoke at a conference two years later, to compliments from more than one colleague. Not only do they remain amongst my favorite shoes, but I’ve since bought more than a dozen pair from the brand.

Discovery happens in a million places, for a million reasons. That cute black dress you HAVE TO HAVE after seeing your friend wearing it in an Instagram reel. The mobile app that took three seconds for you to rebook your flight. The way you can’t figure out the best blender for smoothies or three-row SUVs for a family of skiers or which home/auto/pet insurance policy to buy until ChatGPT or Google Gemini gives you an answer.

It makes sense that retail leaders are asking whether artificial intelligence will shrink marketing budgets. AI is automating work that once took teams. It's speeding up execution. It's changing how quickly ideas move from concept to market. When productivity goes up, spending often comes under scrutiny.

What matters, though, isn't how much work AI removes. It is how AI is changing where brand perception is formed and where decisions are actually being made.

Retail marketing spend has always followed scarcity. When shelf placement mattered most, marketing dollars flowed to promotions and in-store visibility; as a young sales rep for Procter & Gamble, I would get an endcap display for oral care or cough and cold, and it was like finding the holy grail. When search became the primary path to discovery, spend moved to keywords and paid listings. Investment followed the places where attention was limited and choices were shaped.

Scarcity has simply moved again.

Today, some of the most influential real estate in retail is the answer someone gets when they ask ChatGPT what to buy, or the page Google assembles in real time through Gemini by pulling together product information, reviews, pricing signals and social content. In those moments, discovery, evaluation and comparison collapse into a single interaction.

That answer is the new eye-level shelf.

This is why retail marketing budgets aren't disappearing. They will, however, need to rewire around a different paradigm. For most of the last decade, marketing assumed customers would do much of the evaluation themselves. Brands bought attention, drove traffic, and focused persuasion on their own sites. That approach depended on exploration being abundant.

AI pushes evaluation upstream, with systems comparing and ranking options before a consumer ever clicks, which is why investment is moving toward work that helps brands be understood:

• Product and inventory data need to be accurate and current.
• Content needs to reflect the real questions customers are asking, not just the messages brands want to promote.
• Signals across reviews, social platforms, and owned channels need to reinforce one another.

When marketing, commerce and operations are misaligned, the result is uncertainty. Uncertainty reduces confidence, and reduced confidence limits selection. That’s why this discussion isn’t for sales and marketing alone, but teams across sales and marketing, IT, and the leadership suite.

This is marketing in the world beyond the website, where customers may decide what to buy before ever visiting your homepage — even before they do something that tells you they’re in market. I suggest starting with two questions:

1. What question is my brand the answer to?
2. Where are those questions being asked and answered as people form decisions?

Those questions force focus. When the answers are clear, marketing spend stops spreading thin across channels and starts concentrating around the work that supports evaluation and choice.

A brand needs to be visible where decisions take shape. What shows up needs to be relevant to the person and the moment. And the experience needs to hold together — at scale — across data, content and interaction. When those pieces reinforce each other, marketing spend converts more reliably.

In other words, visibility plus personalization, multiplied by orchestration, drives conversion.

Retail marketing is moving in the same direction. The eye-level shelf has moved again. Leaders who recognize where it now sits will spend more effectively because they're aligning marketing budgets to how decisions happen.

Eric Stine is the chief executive officer of Sitecore, a global leader in AI-enabled digital experience software.