Amazon Seller Updates: Amazon’s AI Advances While Competitors Evolve or Fade

Top Amazon Seller News This Week 

This week’s ecommerce scene is packed with major developments, from Amazon’s latest AI advancements to key strategic moves by its biggest competitors.

• Amazon Expands Nova AI Access and Capabilities: Amazon introduces Nova Act, an AI agent designed for web browsing, online shopping, and task automation. Initially available to developers, it aims to streamline digital interactions. 
• Retail Giants Adapt with Tech, Talent and Strategy Shifts: Retailers are investing in automation, AI, and marketplace strategies to stay competitive. Target remains selective with brand partnerships, Best Buy taps influencers, and Temu recruits industry leaders for US growth. Meanwhile, Wayfair and ThredUp explore AI-powered search, and Etsy faces a sharp decline in active sellers.

Read on as we dive deeper into these Amazon seller updates and analyze how they shape the future of online retail and AI-driven commerce.

1. Amazon’s Next Big AI Leap: Nova Act Puts Shopping on Autopilot

Amazon has taken another significant step in the AI arms race with the introduction of Nova Act, a new AI model designed to perform tasks within a web browser. Unlike traditional AI models that primarily answer queries, Nova Act is built to autonomously navigate web pages, conduct product searches, and even complete purchases based on user preferences.

While still in its research phase and only available to developers, Nova Act has the potential to reshape ecommerce, influencing how both customers and sellers interact with Amazon’s marketplace and the web at large.

What is Amazon Nova Act?

Nova Act is part of Amazon’s broader Nova AI suite and is the first product launched by Amazon AGI Labs. This AI-powered agent is designed to interact with websites just like a human user, executing commands such as:

• Browsing ecommerce sites and making purchases.
• Searching the web for information and answering on-screen queries.
• Automating multi-step tasks, such as setting calendar events or filling out online forms.
• Providing scheduled task execution, ensuring users can plan automated actions in advance.

This new Amazon AI model moves beyond simple text-based AI interactions, resembling OpenAI’s Operator agent but with a stronger focus on action-based automation.

How Nova Act Could Change Shopping on Amazon

• Automated Smart Shopping: Customers could ask Nova Act to find the best deals on a product, compare options, and make a purchase on their behalf. For example, a customer looking for a laptop could tell Nova Act, “Find me the best-rated laptop under $1,000 with at least 16GB RAM, and buy it.” The AI would then browse, filter, and finalize the purchase—without the user needing to manually search and compare.
• Personalized Deal Hunting: Nova Act could proactively track price drops and recommend purchases when it detects discounts.
• Subscription-Like Shopping: The AI could reorder frequently purchased items on a set schedule (e.g., dog food every month, vitamins every three months). This would create a seamless auto-replenishment experience, reducing cart abandonment.
• Smarter Checkout Decisions: Nova Act understands nuanced instructions, meaning customers could specify “Buy the cheapest option, but skip any extra warranty or insurance upsell.”  This would streamline the checkout process and prevent unnecessary add-ons.

Reliability and Accuracy of Nova Act

Amazon has placed a strong emphasis on accuracy and usability, ensuring that Nova Act outperforms competing AI agents in crucial benchmarks:

• ScreenSpot Web Text (Interacting with textual elements on screen): 93.9% accuracy (outperforming OpenAI’s Computer-Using Agent and Anthropic’s Claude 3.7 Sonnet).
• ScreenSpot Web Icon (Identifying and clicking visual elements like buttons or icons): 87.9% accuracy.
• GroundUI Web (General UI navigation capabilities): 80.5% accuracy.

These improvements mean that Nova Act is not just experimental but a practical tool that developers can integrate into real-world applications.

The Future of AI Agents in Ecommerce

With AI agents like Nova Act entering the market, Amazon is positioning itself at the forefront of AI-powered shopping and automation. However, it’s not alone—companies like OpenAI, Anthropic, and Google are also racing to develop AI assistants that handle more complex, multi-step processes.

For sellers, this presents both opportunities and challenges.

1. SEO & Product Optimization Become Even More Critical

Since Nova Act automates purchasing decisions, sellers must optimize their listings to align with AI-driven searches. Product descriptions, images, and keywords will need to be AI-friendly to increase visibility when Nova Act scans for “best-rated” or “most affordable” products.

2. Price Wars & Competitive Positioning Will Intensify

Nova Act is designed to prioritize competitive pricing and deals, meaning sellers will need to stay vigilant about their pricing strategies. AI-driven purchases could favor sellers who offer discounts, bundles, or exclusive promotions.

3. Enhanced Importance of Ratings & Reviews

Since Nova Act relies on customer reviews to make decisions, sellers will need to actively encourage positive feedback and maintain high ratings. A product with 4.8 stars is far more likely to be recommended over one with 4.3 stars, even if the latter is cheaper.

4. Impact on Impulse Buying

If Nova Act automates shopping based on pre-set preferences, it could reduce spontaneous purchases, impacting sellers who rely on browsing behavior. To counteract this, sellers may need to increase brand loyalty strategies or create AI-friendly upselling techniques.

5. The Rise of AI-Powered Ad Targeting

Amazon may start offering sellers AI-driven ad placements that allow Nova Act to recommend their products. This could open new avenues for targeted marketing but also create more competition for visibility.

Nova Act is just the beginning of AI-driven commerce, and while its full impact is still unfolding, sellers must prepare for an Amazon marketplace increasingly influenced by automation. Those who adapt early—by optimizing product visibility, refining pricing strategies, and strengthening brand loyalty—will have the best chance of succeeding in the AI shopping era.

2. How Retail Goliaths Are Challenging Amazon’s Reign

Retail giants like Walmart, Target, and Best Buy—along with rising challengers like Temu—are making bold moves to keep pace with Amazon. As they refine their delivery networks, expand marketplace strategies, and rethink customer engagement, these changes reshape the playing field for sellers, bringing potential advantages while also raising new hurdles to overcome.

Understanding how these major players adapt can provide key insights into thriving in an increasingly competitive space.

Tech-Driven Supply Chain Innovations

To compete with Amazon’s unrivaled delivery infrastructure, major retailers are making strategic investments in their supply chains:

• Walmart: Expanded same-day delivery to 93% of US households, built five high-tech fulfillment centers, and partnered with AI robotics firm Symbotic to enhance efficiency.
• Target: Implemented AI-powered inventory management and leveraged Shipt for faster deliveries.
• Best Buy: Introduced minute-by-minute delivery tracking for greater customer satisfaction.

Expanding Third-Party Marketplaces

Top Amazon competitors are shifting strategies to grow their third-party marketplaces, but not all are following the ecomm giant’s open-door model.

• Target Plus: Unlike Amazon and Walmart, Target’s invitation-only marketplace prioritizes quality over quantity, aiming to offer curated selections, especially in home goods and apparel.
• Best Buy’s Marketplace: Launching in 2025, Best Buy’s marketplace will also offer a more selective alternative to Amazon’s vast third-party ecosystem, opening up an application process for a summer release.
• Walmart’s Marketplace: Continuing its expansion, Walmart remains a powerful expansion point for sellers looking to diversify beyond Amazon.

The Rise of Influencer-Driven Retail

Best Buy is stepping into the influencer space, following in the footsteps of Amazon and Walmart.

• Amazon & Walmart: Both offer influencer programs that allow creators to promote products across major social media platforms.
• Best Buy’s New Approach: Influencers will have their own digital storefronts on Best Buy’s site, increasing traffic and engagement.

Temu’s Talent Poaching & Aggressive US Expansion

Temu is making waves by recruiting talent from Amazon and Walmart to expand its US seller network.

• Hiring Spree: Former Amazon and Walmart executives are joining Temu to drive growth.
• Localized Warehousing: To combat tariffs and speed up shipping, Temu is prioritizing US-based sellers and local inventory.

Etsy’s Seller Exodus: A Warning for Marketplaces

While competitors are expanding, Etsy is experiencing a decline in active sellers and buyers, according to Marketplace Pulse.

• Seller Count Dropped: From 7 million to 5.6 million in one year.
• Buyer Engagement Down: Quarterly and annual Gross Merchandise Sales (GMS) also declined.
• Challenges: Etsy faces structural issues, including increased fees, competition, and algorithm changes that disadvantage smaller sellers.

How Sellers Can Adapt to the Intensifying Competition

1. Diversify Sales Channels: Relying solely on Amazon or Etsy is risky. Expanding to Walmart, Target Plus, Best Buy, and Temu can help mitigate dependency on one platform.
2. Leverage AI & Inventory Tools: As retailers integrate AI-powered inventory management, sellers should invest in similar tools like SoStocked to improve stock efficiency.
3. Embrace Social Commerce: Platforms like Best Buy and Walmart are emphasizing influencer-driven sales. Partnering with creators can boost visibility.
4. Optimize for Fast Shipping: Consumers increasingly expect rapid delivery. Using third-party logistics services or Fulfillment by Amazon (FBA) alternatives can help.
5. Focus on Brand Differentiation: Particularly for marketplaces like Target Plus, sellers must offer unique value propositions to stand out.

Other Amazon Seller Updates This Week

1. Amazon Launches Business Price Action Panel

A new feature provides professional sellers with B2B pricing insights, competitive intelligence, and bulk discount recommendations to optimize sales on Amazon Business.

2. Amazon Challenges Consumer Product Safety Recall Order

Amazon has filed a lawsuit against the US Consumer Product Safety Commission, disputing its classification as a “distributor” responsible for recalled third-party products.

3. Amazon Wins Shareholder Lawsuit Over Third-Party Sellers

A US judge dismissed a lawsuit accusing Amazon of misleading investors about its treatment of third-party sellers and expansion plans, citing he found no “compelling and particularized facts” in the case.

4. Amazon Resumes Prime Air Drone Deliveries

Following a two-month pause due to technical issues, Amazon has restarted drone deliveries in Texas and Arizona, reaffirming its commitment to scaling autonomous package delivery.

5. Anthropic Introduces Real-Time Web Search for Claude AI

In a bid to compete with OpenAI’s ChatGPT, Anthropic has enabled real-time web search for Claude AI, allowing users to access the latest online information instantly.