Best Buy’s Agentic Push Carries a First-Party Data Trade-Off

The Data Asset Behind the Strategy

Best Buy can connect 93% of its transactional revenue to a customer ID. That capability, which CEO Corie Barry highlighted at the company’s inaugural Best Buy Ads showcase in September 2025, is the foundation of a retail media business that generated just over $900 million in advertising collections during fiscal 2026, up more than 7% year over year. The company nearly doubled its advertising partner count to 750 over the same period. Those two data points frame everything that followed on Best Buy’s Q4 fiscal 2026 earnings call on March 3, because what Barry described next is a strategy that could either extend that first-party data advantage into new channels or gradually hollow it out.

Two Bets on Where Discovery Is Going

Barry told analysts that Best Buy is among the first retailers to make its product catalog available on ChatGPT, creating what she called “a more seamless path to product inspiration.” The company is also an early advertising partner with OpenAI and is exploring additional integrations. Separately, Best Buy has committed to supporting Google’s Universal Commerce Protocol and is working with Google to enable direct purchases inside AI Mode in Google Search and the Gemini app. Barry framed both moves as early positioning in a channel that does not yet have defined rules: as agentic commerce matures, she said, Best Buy wants to serve customers in new ways both on and off its own platforms.

The Universal Commerce Protocol is worth understanding in some detail because it is not simply a checkout integration. Google launched UCP on January 11 at the National Retail Federation conference, in collaboration with Shopify, Etsy, Wayfair, Target, and Walmart, with endorsements from more than 20 additional organizations across retail and payments, including Best Buy, Home Depot, Macy’s, Visa, Mastercard, and Stripe. The protocol is designed to eliminate what Google describes as an “N x N integration bottleneck,” the problem of requiring separate connections for every AI platform a retailer wants to reach. Under UCP, merchants expose their commerce capabilities once through a standardized interface; AI agents across different surfaces can then discover those capabilities and execute transactions, including checkout, without requiring the shopper to leave a conversational interface. Google specified at launch that retailers using UCP remain the Merchant of Record and retain ownership of customer relationships and post-purchase data. Shopify co-developed the standard and noted publicly that merchants “declare and define what capabilities they support,” including proprietary functionality.

For Best Buy, the operational significance of UCP is that it provides a structured way to make its product catalog and checkout logic legible to AI agents across multiple surfaces without building and maintaining individual integrations with every platform that comes to market. The ChatGPT partnership operates differently and represents direct catalog access for the specific purpose of product discovery within OpenAI’s environment. Together, the two moves represent a deliberate choice to make Best Buy’s inventory findable wherever AI-assisted shopping is occurring, rather than waiting for consumers to arrive at bestbuy.com.

The Signal from Consumer Behavior

That positioning is consistent with where consumer behavior appears to be heading. Adobe reported that traffic driven to retail sites by generative AI grew 693% during the 2025 holiday season, though the company did not disclose conversion data alongside that figure. The directional signal is consistent with what multiple retailers reported during the same period: AI assistants are becoming a meaningful discovery channel, particularly for considered purchases where customers research extensively before buying.

Electronics is a category where that research intensity matters. Best Buy’s stores and website are already organized around the premise that customers need guidance navigating complex, frequently updated product categories. Barry acknowledged on the earnings call that the company sees an opportunity in what she described as “reinvigorated categories” including smart home, connected TVs, and AI-enabled wearables, with an eye toward hardware that embeds AI capabilities directly into the device. The company’s stated goal is to serve as the key partner helping vendors explain new technology to customers at the moment purchase intent is forming, which is increasingly the moment an AI assistant is involved.

What Gets Traded Away

The tension in that logic is not trivial. Julie Geller, principal research director at Info-Tech Research Group, described the structural risk to Retail Dive: if the AI assistant becomes the primary storefront, retailers get pushed toward the fulfillment end of the value chain, with discovery, evaluation, and repeat purchase occurring on a platform the retailer does not control. That means fewer behavioral signals flowing back into the retailer’s data infrastructure, a weaker basis for retail media targeting, and a loyalty loop that runs through a third-party surface. Geller also identified the handoff moment as a point of operational exposure: if a customer clicks through from an AI recommendation and encounters inconsistent pricing, the wrong product variant, or missing availability information, the confidence built by the AI assistant collapses at the exact moment Best Buy needs it most.

The first-party data question sits at the center of Best Buy’s broader commercial model. The company’s claimed 2x outperformance of first-party audiences over third-party audiences, cited publicly in September 2025, depends on the accuracy and coverage of that customer ID graph. If a growing share of discovery happens through ChatGPT or Google AI Mode, and if completed transactions routed through UCP return less behavioral data to Best Buy than a native bestbuy.com session would, the quality of that graph over time becomes a variable worth monitoring. UCP’s design explicitly preserves the Merchant of Record relationship and post-purchase data ownership; how much pre-purchase signal Best Buy captures from an AI-mediated session, compared to a native site visit, will depend on how those integrations are instrumented.

Best Buy’s retail media business is also now partly dependent on its marketplace, which launched in August 2025, scaled to more than 1,100 third-party sellers, and generated roughly $300 million in gross merchandise value in Q4 alone. Chief Financial and Strategy Officer Matt Bilunas said growth in marketplace commissions and Best Buy Ads collections together are expected to improve the company’s gross profit rate by approximately 30 basis points in fiscal 2027. That math relies on Best Buy’s ability to attract and retain brand partners who see value in advertising against its shopper audience, which in turn relies on that audience being large, identifiable, and transactionally engaged on Best Buy’s owned properties.

The Operational Foundation

On the operational side, the Q4 results that surrounded Barry’s agentic remarks showed a business in reasonably good shape by the metrics retailers can actually control. Comparable sales declined 0.8% year over year, with softness concentrated in home theater and appliances, partially offset by computing and mobile phone growth. Revenue came in at $13.8 billion, down nearly 1% from a year earlier, but profitability came in slightly ahead of guidance. The company’s relationship net promoter score reached its highest level in 11 quarters, with Barry citing gains in helpfulness, empathy, and ease. Fulfillment hit a company record, with 70% of online orders delivered within two days. Jason Bonfig, Senior EVP and Chief Customer, Product and Fulfillment Officer, pointed to delivery speed as central to serving customers looking to replace or upgrade devices quickly.

Best Buy is also recalibrating its service model in ways that could prove relevant to how it differentiates in an AI-mediated discovery environment. Barry described a deliberate pairing of expanded AI-driven digital support with continued investment in Geek Squad, with live agent availability maintained across in-home, in-store, and virtual channels. The company is also shifting Geek Squad’s scope beyond break-fix and product installation toward what Barry called “experiential solutions,” including full premium home installations. Vendor-provided in-store labor hours grew 20% in the second half of fiscal 2026 and are expected to increase again in fiscal 2027. For a retailer simultaneously making its product catalog available to AI agents operating on behalf of consumers, the continued investment in human expertise inside the physical store is a parallel track: the in-store experience as the differentiation that no conversational interface can replicate.

The Cost Variable That Constrains Everything

Fiscal 2027 guidance projects comparable sales in a range of -1% to +1% and revenue between $41.2 billion and $42.1 billion. Bilunas flagged rising memory component costs and supply uncertainty in computing as the principal risk factor for the year ahead. Higher tariffs on consumer electronics imports add additional uncertainty; Barry said raising prices would be the company’s “last resort” and that vendor negotiations and supply chain diversification are the primary mitigation tools. Those pressures are not specific to Best Buy, but they are more consequential for a retailer whose core volume depends on categories with significant import exposure. How the company navigates those cost dynamics will determine how much flexibility it retains to invest in the platform-level integrations that agentic commerce readiness requires.

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