Target’s latest earnings report delivered a strong sales recovery and good news on future price cuts, but one figure signals a concerning shift in customer behavior.
As one of the largest retailers in the United States, Target’s sales can often point to widespread consumer habits across the country.
Its second quarter financial results confirm the retailer is on the right track under the leadership of new CEO Michael Fiddelke (since Feb. 2026) to recover from previous sales struggles and bring back customers to its aisles.
Net sales improved 5.3% year over year, reaching $26.5 billion, and comparable sales rose 3.8%, according to Target’s official report.
“Comparable traffic increased 3.6%, suggesting more shoppers are visiting Target as the retailer works to sharpen its merchandise, improve its stores and offer more value,” reported TheStreet’s retail journalist Maurie Backman.
And while the retailer’s executive vice president and chief merchandising officer, Cara Sylvester, delivered great news to its customers, pledging further price cuts on top of lowering prices on more than 10,000 items over the last 12 months, Fiddelke disclosed an important change in consumer behavior.
Target’s external AI traffic is growing more than 3.5× the industry rate
Earlier this year, Target became one of only a small number of retailers to team up with OpenAI, Google Gemini, and similar leading platforms to help further the development and growth of agentic commerce.
“More people are discovering products and finding inspiration in AI-powered environments, and we see a real opportunity to meet them on their shopping journey. By partnering early with leading tech innovators, we’re helping guests turn inspiration into action and shop Target in a way that feels natural and easy” stated Sarah Travis, chief digital and revenue officer at Target, in a June press release.
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Target’s latest results show a small but fast-growing share of shoppers arriving at the retailer through AI-powered shopping experiences.
“While still small in total today, as more consumers begin to explore the benefits of agentic shopping, Target’s digital traffic sourced from external AI platforms is growing more than 3.5 times the industry as compared to a year ago,” Fiddelke highlighted during the Q2 earnings call.
Although Target is building infrastructure for agentic commerce, it describes the consumer-facing experiences it has launched primarily as conversational AI shopping. Shoppers can ask questions, discover products, browse recommendations, build baskets and, on some platforms, complete purchases while retaining control of the final decision.
Shoppers risk missing out on real deals and more
When consumers use conversational AI platforms to discover products and build their shopping baskets, they risk missing local store clearance markdowns.
Some store-level discounts are not digitally exposed and therefore cannot be discovered by an AI shopping system operating on digitally accessible product and pricing information.
For example, a shopper walking through a store may encounter a clearance sticker or other localized markdown that isn’t reflected in the online price.
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“In-store clearance pricing isn’t visible online. Clearance items and pricing can only be found and purchased in-store,” reads Target’s Price Match Guarantee page.
As a result, an AI shopping agent operating from online, machine-readable product data cannot identify discounts that the retailer does not expose digitally.
As AI-powered shopping becomes a growing part of how consumers discover and purchase products, this could create a new blind spot: Shoppers may increasingly rely on digital recommendations while missing discounts that exist only inside physical stores.
Other risks for consumers stemming from agentic and online shopping
Earlier this year I reported on what Walmart’s e-commerce growth could signal.
Researchers at the Digital Watch Observatory warn that AI could give large retailers an even greater advantage because they have more resources to invest in advanced technology.
This could increase market concentration, make it harder for smaller businesses to compete, and reduce consumer choice, while also raising concerns about data privacy and reduced human interaction in customer service.
AI shopping could make online purchases less transparent and allow companies to use chat histories and personal data to target consumers or enable dynamic pricing, warns Tech Policy Press. Meanwhile, a study published in the Journal of Electronic Commerce Research found that AI shopping assistants can produce convincing but false information, including fake discounts and promotions.
There are also concerns about consumer spending. A 2025 study published through PMC found that digital shopping can make spending feel less tangible, potentially encouraging impulse purchases.
Overall, the growth of AI-powered and online shopping could bring greater convenience, but it may also mean fewer choices, greater privacy risks and a higher risk of impulsive spending or missing cheaper in-store deals.
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