Commerce, everything we buy and sell, represents a whopping $2.7 trillion part of our economy – and it’s almost always growing. Part of what fuels that growth is technology investments made by retailers and brands in modern capabilities that allow them to reach consumers in more flexible, immersive and personalized ways. Over $200 billion is invested annually on these types of technology innovations – and by the early 2030s, Gartner predicts spending on commerce tech will reach over $400 billion.

Contemporary AI capabilities – particularly generative AI – will be a major driver of this growth. Rapid adoption will have far-reaching implications for the companies that sell products to consumers and to all of us as shoppers.

For consumers, these new capabilities will save us time and money – we’ll get what we need, when we need it, at the best price available. For merchants, the rise of agentic commerce will be equally transformational. It will fundamentally alter, yet again, the basis on which they compete and win.

Experience Tells Us: Disruption in Commerce is the Norm, Not the Exception

At Bain Capital – as investors across the commerce landscape for 40 years, from innovative tech start-ups to multi billion dollar retailers and brands – we’ve had a front row seat to this industry’s dramatic (and continued!) evolution.

Our expertise derives from active and ongoing engagement with the major players in this ecosystem. We have a unique vantage point from which to view and assess market trends, from our investment in Staples’ first store 40 years ago, to Canada Goose, Rent the Runway and Jet.com in the 2010s, to Wonder in the 2020s; from Kiva Systems, an early pioneer in automated ecommerce distribution centers 20 years ago, to modern leaders in commerce-tech like Attentive, Bloomreach, ShipBob, Mirakl, Archive Resale, Soona and Fermat. Our deep experience has only fueled our optimism around what’s to come. It’s also made us keenly aware that this sector tends to reinvent itself every decade or so.

The first wave of digital disruption of the past 30 years was driven by the emergence of ecommerce fueled by the rise of Amazon (launched in 1994 and accelerating its dominance in the 2000s). This “Ecommerce Era” drove the need for all other merchants to “tool up” to compete. BCV backed a series of successful companies in the 2000s that were essentially in the business of helping traditional retailers and brands operate more like Amazon – with contemporary technology, data and analytics capabilities.

The next wave of disruption was ushered in with the iPhone’s release in 2007. This new “Mobile Shopping Era” placed stores and merchandise literally at our fingertips. Merchants could now reach millions of consumers not just at home or at work, but all day, anytime, anywhere. Unsurprisingly, by the 2010s, brands found they could successfully sell to consumers directly – as opposed to historically only through a large multi-brand retailer. And this new direct to consumer (DTC) sales motion required brands to build new skills and capabilities, especially as sales channels proliferated and consumer demand fragmented. Merchants suddenly had to list and advertise their goods in all sorts of places, from third-party marketplaces to emerging social platforms to their own digital storefronts. And they needed to do so in a hyper-personalized and automated way.

And now, as we sprint to the homestretch of 2024, the commerce landscape is poised to change dramatically yet again! Here at Bain Capital Ventures, we believe we’re at the dawn of a totally new shopping paradigm, supported by gen AI, where intelligent “agents” will be operating on each consumer’s behalf. I’m calling this third wave the “Agentic Commerce Era,” and I expect it will have far reaching implications for sellers and consumers alike.

Introducing: Intelligent Shopping Agents

Am I predicting the demise of stores? The end of influencers? Absolutely not! I imagine we will all continue to frequent those stores, both offline and online, that give us joy – where the experience is energizing, the environment is entertaining, the merchandise is unique, the service is top-notch. And we will most certainly continue, as we always have, to listen to the advice of those we trust or admire. Plus, given Gen Z’s insatiable addiction to short-form video, the explosion of Instagram Reels and TikTok and the authenticity and effectiveness of creators leveraging this type of medium, it’s clear we are still in the early innings of the “creator economy” – along with the flood of marketing dollars that will move in this direction (but that’s for another post!).

Suffice it to say, the Agentic Commerce Era is not one where stores, or influencers, disappear. In fact, I believe each becomes all the more important as brands seek new and cost-effective ways to influence our shopping missions. But intelligent agents certainly will have a dramatic impact on many of our more mundane shopping efforts.

Have you or your family members ever thought:

• “What do we need at the grocery store for our family meals this week?”
• “Where can I pick up a present for my daughter’s third grade friend’s birthday party?”
• “I need a fancy dress for a black-tie wedding in New York City in a few weeks. What should I wear and where can I find it?”
• “The kids are going back to school and we need new cleats and sticks and balls and helmets and pads for fall sports. And, oh by the way, where should we resell the gear from last season that doesn’t fit anymore but is still in pretty good shape?”

An intelligent shopping agent will know everything there is to know about our individual and family needs, our tastes, our existing “inventory” and, importantly, our budget. Armed with this data, our agent will not just suggest alternatives but will, in fact, complete the entire shopping mission on our behalf.

This new paradigm will unlock huge amounts of time and savings for consumers. But, will it be equally beneficial for merchants? For the sellers of goods, successfully operating in this agentic shopping future will require implementation of new technology, new capabilities and new infrastructure. Just as the emergence of the ecommerce and mobile shopping eras were daunting for sellers, the agentic shopping era will be similarly disruptive – likely establishing brand new winners and losers, elevating some who are on the front-end of these changes while demoting others who lag behind. And, as was true during those past disruptions, this new wave will rapidly accelerate the ideas and time-to-market of founders setting out to help merchants arm themselves for this agentic commerce future.

Agents of Change for the Agentic Commerce Era

At Bain Capital Ventures, we’ve been fortunate to benefit from our firm’s deep and broad participation in the industry over 40 years, enabling us to see the early signals of these waves as they emerge and to partner with a series of commerce and marketing tech leaders along the way.

Now, we’re on the hunt for the next generation of visionary, ambitious founders setting out to bring the potential of an agentic commerce future to life. If you’re one of them, or you just really love this sector like we do, please ping us for a chat! I’m reachable anytime at sfriend@baincapital.com.