Amazon.com Inc (NASDAQ:AMZN)’s newly launched Alexa for Shopping platform could become a major long-term growth driver for its retail business, according to Bank of America analysts, who said the AI-powered shopping assistant may help the company defend its e-commerce dominance against rising competition from rival AI agents.
The analysts described Alexa for Shopping, or “AfS,” as “a more powerful assistant for Amazon shopping,” combining the capabilities of Rufus and Alexa+ into a unified shopping assistant designed to improve product discovery, research and purchasing.
The analysts said the platform leverages Amazon’s extensive product catalog and proprietary customer data alongside Alexa+ features such as “persistent memory & interaction history,” which they believe will create a more personalized shopping experience over time.
“AfS combines Amazon's large catalogue & proprietary data with Alexa+'s persistent memory & interaction history, enabling a more personalized experience that improves product discovery, research, and purchasing,” the analysts wrote.
Bank of America argued that increased adoption of the assistant could create a “flywheel effect,” where stronger personalization leads to higher engagement and conversion rates.
The analysts pointed to Amazon’s previous disclosure that shoppers using Rufus were “approximately 60% more likely to make a purchase during that shopping trip than non-Rufus users,” adding that AfS could eventually “drive higher conversion rates than Rufus alone.”
They see the launch as part of Amazon’s broader response to growing competition from AI-powered shopping agents developed by companies including Google and OpenAI.
“The emergence of 3P shopping agents from Google, OpenAI and others has fueled a bear narrative that Amazon could see erosion of direct traffic and pressure on ad revenues,” the analysts wrote.
While Bank of America said that threat has not yet materially impacted Amazon traffic, they argued the company needs to continue improving the shopping experience to defend its ecosystem.
“An improved shopping experience with AfS is essential to maintain direct traffic to Amazon,” they wrote.
Bank of America highlighted that Amazon’s competitive advantages include its marketplace data, broad third-party seller selection, logistics network, Prime membership ecosystem and Amazon Web Services infrastructure.
The firm estimated that Alexa for Shopping could generate nearly $215 billion in incremental gross merchandise volume by 2035, and could contribute roughly $20 billion in incremental retail profit through commissions and advertising.
“Over the next 10 years, we think agents will accelerate the Online shopping shift,” the analysts wrote.
Bank of America maintained its ‘Buy’ rating on Amazon shares, saying it views the company as “an AI beneficiary across both its AWS and Retail businesses.”
Shares of Amazon traded hands at $269 on Thursday afternoon.