By Ben Hussey, co-CEO of Katana Cloud Inventory

Artificial intelligence is disrupting the world of retail we used to know. The National Retail Federation’s (NRF) State of AI in Retail report shows that 93% of retailers plan to develop or will continue to develop AI policies in place within the next 12 months. These flashy tools are huge assets to retailers, especially small and mid-sized businesses (SMBs) as they are constantly adapting to compete with large retailers. 

Yet the pace of today’s technology can be overwhelming for SMBs. The time and cost to integrate, learn and master a new AI tool is a luxury most small business can’t afford, especially after the tariff whirlwinds and market volatility in 2025. 

More often than we think, many SMBs are simply looking for reliable, scalable systems that keep business on track and on top of their inventory with real-time insights of what’s in stock. The small business who will see success in 2026 and beyond are those who allot time and training to a tech system fit for their organization and leverage full inventory insights into action. This dependability is crucial for any business trying to survive in a world of AI retail.

The Evolution of the Digital Storefront

AI agents have begun advertising, shopping and recommending products for consumers. The Universal Commerce Protocol (UCP) recently launched by Google proposes an open-source standard, co-developed with partners including Shopify, that defines a common way for AI agents to interact with merchant systems during a purchase. 

AI assistants can now take shoppers from search to checkout and breeze right past a merchant’s website. The traditional product discovery and purchasing journey are now happening inside AI channels, and major platforms are all aligning on this new shopping protocol.

At a time when major players are evolving to this model, it’s crucial for small retailers to follow suit. The storefront and brand experience that has traditionally been marketed to consumers to differentiate their products has been shrunk down to one-click, if at all. Without a storefront for consumers to browse and explore, SMBs need to adapt—and quickly— to determine how they can capture an AI agent’s visibility. Retailers need to be ‘machine visible’ and market to technology instead of human consumers.

Product availability, delivery dates and fulfillment are evaluated by agents instantly, so full visibility into these items are really what SMBs need to stay competitive in the AI shopping landscape. Operational and real-time data are part of the buying decision for the AI consumer and pieces of the puzzle that retailers can’t afford to go without. 

Machine Visibility

What retailers do know: AI agents and LLMs can only recommend the data they can confirm. Inaccurate stock counts or outdated lead times can quietly disqualify a retailer and even push the AI agent to mark that retailer as unreliable or unavailable. 

The margin for error is slim as one false confirmation of product availability or oversale due to stale inventory will be flagged by the agent. Inventory accuracy is no longer an option for small businesses. Systems that support and enable small businesses and deliver whole and accurate inventory visibility are what keep SMBs in the game. 

The Road to SMB Resilience

Agentic commerce turns inventory reliability into a performance record. Inventory mistakes show up as failed purchases and don’t get smoothed over by browsing and manual comparison. For small businesses looking to ensure their products receive positive feedback from agent shoppers, here are some of the key focus areas to consider:

• Provide inventory accuracy across locations, including on-hand or reserved stock
• Ensure merchant platforms, such as Shopify, and inventory systems are in sync to avoid manual reconciliation and copy-paste work
• Keep lead times updated and reflective of reality: updating supplier delays, production changes, seasonality
• Set clear exception rules for backorders and substitutions and keep those rules consistent by channel.  

Advanced cloud systems are a reliable foundational tool that can help SMBs maintain this clarity without adding complexity or shifting from one new tool to the next. When one product slip can leave a small business off an agent’s radar, full access to accurate inventory should be a priority rather than flashy new tools that could easily be replaced by the next newer and smarter version. 

For SMBs feeling behind or overwhelmed by agent shopping, taking a step back and ensuring the key aspects of the business are intact and stable is a step in the right direction in staying competitive in the industry. Accurate availability and reliable consumer experiences can beat any brand that overpromises. Consistent inventory keeps retailers in the running in any kind of storefront.

About author