Microsoft Announces Copilot Checkout and Brand Agents
On January 8th, 2026, Microsoft announced Copilot Checkout and Brand Agents. The announcement framed these tools as something shoppers genuinely need to simplify comparison shopping.
Microsoft used a familiar example: someone searching for a dress and ending up with a dozen open tabs and multiple abandoned carts.
I relate to that. When I’m shopping for my daughter’s custom solo costumes or her convention sets, the process is exactly that chaotic.
Copilot Checkout promises a different experience. I can describe every detail of what I need, and the system will match me to the best option and I can checkout inside of Copilot.
In practice, the AI agent functions like a digital sales associate.
How to participate as a merchant in Copilot
In order to participate merchants must apply, but if you are on Shopify you will automatically be able to use this without an application.
How do Brand Agents work in Copilot
Brand Agents are essentially digital shopping assistants. They function the same way a sales associate would if you walked into a store and asked for help. The AI is trained to mirror your brand’s voice and behavior, so customers feel like they’re talking to your team—not a generic bot.
The goal is simple: help shoppers feel confident enough to buy.
How does analytics and measurement work in Copilot
Microsoft Clarity will also be integrated, giving you visibility into how this new channel actually behaves compared to your existing traffic sources. Instead of guessing whether the agent is helping or cannibalizing performance, you can see the patterns directly—engagement, drop‑offs, friction points, and conversion paths—so you can diagnose whether the agent is functioning as intended or introducing new instability.
The Economic Incentive: Why Microsoft is Moving "Upstream"
On the surface, this looks like a feature update. But if you are a long term reader of this blog and you have been following along and reading the posts inside my: Platform Behavior Hub then you know that platforms position features for the users and advertisers but there is always a deeper strategic play.
In this case Microsoft is in a land grab for the "Transaction Layer" of the internet.
I’ve broken down this same pattern inside Google Ads, where platforms reward volume over intent and businesses end up paying for the concept of their service instead of decision‑ready buyers.
For decades, Microsoft (and Google) made money by sending you away to other websites. But in an AI-first world, the "middleman" who provides the blue links is becoming obsolete. I wrote about this over in Search Engine Land: PPC in the age of zero-click search: How to stay profitable, which was the 2nd most read column of 2025.
Microsoft’s incentive here is three-fold:
Platform Stickiness: By integrating checkout, Microsoft transforms Copilot from a search engine into an Operating System for Life. If you never have to leave the interface to buy a dress, book a flight, or order supplies, you have no reason to ever leave the Microsoft ecosystem and this makes them more money.
Data Supremacy: When a transaction happens inside Copilot, Microsoft gains "full-funnel" visibility. They don’t just see what you searched for; they see what you compared it to, what questions you asked the Brand Agent, and ultimately, what you paid. This data is the "gold" that will power their next generation of ad targeting and B2B forecasting. And this is what you previously had when people where on your website.
The "Agentic Toll": By partnering with Shopify, PayPal, and Stripe, Microsoft is positioning itself as the infrastructure for the "Agentic Economy." While they aren't charging a "tax" like an app store yet, they are securing their place as the primary gateway for billions of dollars in autonomous commerce.
Why Non-Retail Businesses Must Pay Attention
If you aren't in retail, it is tempting to ignore this news.
That would be a mistake. The "Brand Agent" isn't just a shopping tool; it is a blueprint for how all business-to-business (B2B) and service-based interactions will function by the end of the decade.
This is the exact reason I am writing so much on my blog.
We’re already seeing early signs of this same upstream shift on Reddit, especially in the way Reddit Max is reshaping how businesses capture and interpret intent.
As the President of the Paid Search Association, I can see a marketing revolution clear as day and I know that to protect myself, I need to articulate my thinking patterns so that AI matches me with: emotionally intelligent business owners that don’t want hacks or quick fixes and who need protection and signal strenth for the next decade.
So, whether you sell legal services, SaaS, or industrial parts, your customers are becoming "Agent-First."
We are moving toward a world of Agent-to-Agent (A2A) Commerce, where a buyer’s AI agent negotiates with a seller’s Brand Agent to find the best contract terms, delivery dates, or technical specs.
If your business isn't "machine-readable," you simply won't be invited to the table.
How to Protect Your Business in the Agentic Era
As AI agents become the new gatekeepers of intent, businesses must pivot from "optimizing for humans" to "optimizing for agents." Here is how to protect your market share:
Prioritize "Machine-Readable" Truth: Agents don't "browse" your beautiful web design; they ingest your data. To stay relevant, your product catalogs, service menus, and whitepapers must be structured in high-quality, standardized formats (like JSON-LD or Schema.org) that an AI can parse without error.
Own Your Brand Voice (Before Someone Else Does): Microsoft’s Brand Agents allow you to "train" the AI on your voice. Do this aggressively. If you don't define how your brand speaks and acts in an agentic interface, the platform's "generic" AI will do it for you—likely diluting your value proposition in the process.
Audit for "Agent-Cannibalization": Use tools like Microsoft Clarity to watch for "instability." Is your Brand Agent actually helping users, or is it preventing them from seeing high-value upsells on your site? You need to ensure the agent is an extension of your sales team, not a barrier to your own high-margin offerings.
Prepare for A2A Negotiations: Start thinking about your "Logic Layer." What are the minimum prices or terms your business can accept? Soon, you will need to empower your agents to make these micro-decisions in real-time to win "zero-click" deals.
The Bottom Line
After 17 years in PPC, I don’t buy into the idea that any platform—Microsoft included—is built to serve the average business or the consumer. Platforms exist to serve themselves. When their incentives happen to align with what a business or shopper needs, great. But the moment those incentives shift, the platform will reshape user behavior, advertiser behavior, and even industry norms to fit its new model.
That’s not cynicism. That’s pattern recognition earned from nearly two decades of watching how these systems evolve.
I’ve broken down how this instability shows up inside Google Ads too, especially in the way budget pacing signals shift beneath operators without warning.
Microsoft isn't just trying to help a customer buy a dress; they are rewriting the rules of how value is exchanged.
The traditional funnel—Awareness, Interest, Desire, Action—is being compressed into a single, agent-led conversation.
If you want the full breakdown of how the funnel is collapsing — and why AI isn’t the real disruptor — I go much deeper in this post: AI Isn’t the Disrupter. The Platforms Are. The post walks through the upstream shift, the new decision moment, and the structural changes happening inside the platforms themselves. If you’re trying to understand what’s actually driving the instability operators are feeling right now, this is the piece to read.
The merchants and businesses that thrive won't be the ones with the best websites, but the ones with the most "agent-ready" infrastructure.
Frequently Asked Questions: Copilot Checkout & Brand Agents
If a customer buys through Copilot Checkout, who owns the customer data?
You do. Microsoft has explicitly stated that the merchant remains the "Merchant of Record." This means you own the transaction, the customer relationship, and the fulfillment process. Copilot acts as the high-conversion "surface" where the transaction happens, but the data flows into your existing systems (Shopify, Stripe, etc.).
I’m on Shopify. Do I really get enrolled automatically?
Yes. Microsoft is using an "opt-out" model for Shopify merchants to ensure rapid scale. Keep an eye on your Shopify admin for the Copilot Checkout integration notification. If you aren't on Shopify, you can apply via the Microsoft Merchant Center using PayPal or Stripe as your payment processor.
How do I actually "train" my Brand Agent?
Initial training happens via your product feed (catalog enrichment). However, the "brand voice" is refined through Copilot Studio. You can upload brand guidelines, voice-and-tone documents, and even specific "logic rules" (e.g., "Always suggest a matching accessory for orders over $100") to ensure the agent doesn't just sound like a generic bot.
What is the "Agentic Commerce Protocol" (ACP) and why does it matter?
ACP is an open-source standard (co-developed by Microsoft, OpenAI, and Stripe) that allows different AI agents to talk to different checkout systems. By adopting this standard, you aren't just "fixing" your site for Microsoft; you are making your business compatible with a future where ChatGPT, Gemini, or a user's personal AI assistant can "handshake" with your store to complete a purchase.
Will these agents cannibalize my existing website traffic?
This is the million-dollar question. Early data from Microsoft shows that journeys including Copilot are 194% more likely to result in a purchase when intent is present. While it might feel like "cannibalization" because they aren't visiting your homepage, it’s actually "conversion optimization" at the point of intent. Use the Microsoft Clarity integration to track these "agent-assisted" sessions and compare their LTV (Lifetime Value) to your traditional web traffic.
Is this only for retail? What if I sell B2B services?
While the "Checkout" feature is retail-focused today, the "Brand Agent" logic is the blueprint for B2B. If you sell services, your "catalog" is your service menu and your "checkout" is your lead-gen form or booking calendar. You should still implement JSON-LD and an llms.txt file now so that when B2B agents start "shopping" for service providers, your data is the most accessible. I have seen many conflicting answers on the llms.txt however so I am answering this based on the information that I know today, knowing this could and will change.
