AI Search Tools Favor Large Retailers Over Small Businesses

Vaer AI and Lightspeed Commerce conducted a study revealing that AI search tools disproportionately favor large and mid-sized retail chains over independent businesses. The research analyzed 460,000 AI-generated shopping responses from Google AI products and ChatGPT, finding that large chains received 52% of top recommendations, while smaller businesses received only 20%.

This disparity increases when shoppers search for specific branded products, where the share of top recommendations for small retailers drops to 10%. The study indicates that current AI algorithms prioritize digital footprint and company size over consumer preferences, as 33% of surveyed consumers believe AI should prioritize local or small businesses.

Researchers found that adding the word "independent" to a prompt more than doubles the share of small retailers recommended. This suggests that while AI tools can locate small businesses, they rarely prioritize them unless explicitly instructed to do so.