Thanks to new AI tools, your online shopping experience at Australia’s biggest retailers could be in for a dramatic change.
Woolworths, Coles and the owner of both Kmart and Bunnings have all recently signed major deals with AI technology companies, but remain vague about potential changes to the shopping experience.
How soon the advanced technology, known as agentic AI, will be rolled out is unclear, as is whether personalised pricing or surge pricing will follow.
While there are more questions than answers about how AI technology will transform the online shopping experience, one thing is clear. It is coming.
In October 2025, Coles announced a major deal with OpenAI, owner of ChatGPT, with a plan to roll out AI tools across its internal corporate workforce by early this year. The press release announcing the deal says the company will be using the technology for more than just back-of-house purposes.
“Together with OpenAI, Coles is also exploring how emerging AI capabilities could reshape the shopping experience, helping customers plan, shop and check out in more personalised, convenient and connected ways,” it says.
“Building on OpenAI’s experience with global retailers, Coles will reimagine how its teams work and how customers shop through the use of advanced AI tools.”
In January, Woolworths said they were partnering with Google’s AI tool Gemini to upgrade the supermarket’s existing chatbot Olive to become an AI-powered “supermarket companion” capable of planning meals.
Wesfarmers, the owner of Kmart, Bunnings, Officeworks and Priceline, has signed AI-partnership deals with both Google and Microsoft in recent months.
Both supermarket giants Coles and Woolworths have plans to integrate AI into their online shopping experience.
The transformation of how we shop
Uri Gal, professor of business and information systems at University of Sydney, says these large and complex language models have the capacity to change the way we shop forever.
“Pretty soon you’ll be able to say ‘I’m hosting a party for eight people, design a menu for me and buy all the relevant ingredients’. The user willingly delegates responsibility from themselves onto the tool,” he says.
Gal says the supermarkets have purchased foundational models from the major AI companies, but will be “fine tuning” the systems and training it on internal information like loyalty program data for customisation.
With these systems, the more autonomously they act, the more these risks multiply
Jeannie Paterson, University of Melbourne
Jeannie Paterson, professor of consumer protection law at the University of Melbourne, who previously sat on the federal government’s AI Expert Group, says if AI bots are allowed to autonomously put items into checkout baskets, consumer risks will increase significantly.
“With these systems, the more autonomously they act, the more these risks multiply. They could be putting the wrong items in the basket or spending too much money and if it’s on the consumer to catch that out, there could be serious consequences,” she says.
We sent questions to Woolworths and Coles about whether proposed AI systems could automatically place items in shopping baskets and whether customers would have the option to turn off assisted shopping technologies.
A Woolworths spokesperson says customers will have “full control over their cart” and “will be able to review and refine any suggestions from Olive before completing their purchase”.
“Our approach to AI is focused on making the shopping experience easier and more personalised for our customers. We take a customer-led approach to AI, offering problem solving and shortcuts that are genuinely useful to shoppers,” the spokesperson says.
“Once live, Olive will be able to anticipate customer needs to make life that little bit easier – from helping plan meals and finding specials, to helping them shop for specific occasions like birthday parties.”
Neither company responded to questions about whether customers would be able to opt out or turn the systems off
Coles says AI will make shopping more relevant and convenient for customers.
“For Coles Online customers, this means helping them discover products they are more likely to need or want to buy, based on their shopping behaviour and preferences. These tools are designed to support the customer’s decisions; while ensuring they remain in control of what they choose to add to their basket,” the spokesperson says.
Neither company responded to questions about whether customers would be able to opt out or turn the systems off.
Bunnings and Kmart owner Wesfarmers did not respond to requests for comment.
It remains unclear whether shoppers will be able to opt out of AI assistance.
Competition concerns
For Paterson from the University of Melbourne, the concern is that AI tools may preference certain products or brands with more lucrative commercial relationships with the retailers over others.
If this were the case, companies may pay a premium to be recommended more often than others, further decreasing competition in an already highly concentrated market.
“Consumer law still applies that you can’t mislead or deceive a customer, but with these systems it may be hard to prove what’s going on,” she says.
Geoff Olds is the managing director of Technology 360 Group, which specialises in working with pharmacy retailers, but also counts Woolworths among its clients.
He says increased access to AI models will allow small and medium retailers to compete with the big players in ways they haven’t been able to before.
Electronic price labelling could potentially lead to surge pricing for customers who shop in stores late at night or on public holiday
“It’s going to level the playing field among those who adopt the technology. People who don’t adopt technology in this space drop out of the market. That’s the unfortunate part of disruptive technology,” he says.
Olds expects to see AI technologies also move into the physical retail space in the near future. Electronic price labelling could potentially lead to surge pricing for customers who shop in stores late at night or on public holidays or even personalised pricing based on customer loyalty and other data points.
He points out that variable pricing already exists in certain physical settings.
“If you go to the local butcher, the price of meat will change four times a day. If you go to a convenience store late at night it’s going to cost you a lot more than if you went to the supermarket.”
“It’s only a matter of time before we accept these things in the supermarket and chemist settings more broadly,” he adds.
Neither Coles nor Woolworths responded to questions about how loyalty programs would be integrated with AI models either online or instore in the future, but Paterson says the massive data sets these companies hold give them enormous power.
“Loyalty programs are a gold mine. They contain so much data on our shopping habits and behaviours over a long period of time.”
She says while many people may find these incoming technologies convenient and helpful, scepticism and caution are important.
“While people might not mind being nudged or prompted towards certain behaviours, if the AI is making the decisions for you, the question needs to be asked: ‘what are you really saving by having something do the shopping for you, and what is it costing?’.”
Jarni Blakkarly is an award-winning Investigative Journalist at CHOICE. Jarni has worked for news organisations such as SBS, Reuters, Al Jazeera English, ABC 730, Radio National, BBC World Service and Deutsche Welle.
Jarni won the Walkley Foundation's young journalist of the year student category award in 2016 and was the recipient of a Melbourne Press Club Michael Gordon fellowship in 2022. In 2023 he was a highly commended finalist in the Quill Awards and a winner at the 2024 Excellence in Civil Liberties journalism awards. In 2024 he was elected to serve on the Federal Council (National Media Section) of the MEAA. Jarni has a Bachelor of Communications (Journalism) from the Royal Melbourne Institute of Technology (RMIT). LinkedIn
Jarni Blakkarly is an award-winning Investigative Journalist at CHOICE. Jarni has worked for news organisations such as SBS, Reuters, Al Jazeera English, ABC 730, Radio National, BBC World Service and Deutsche Welle.
Jarni won the Walkley Foundation's young journalist of the year student category award in 2016 and was the recipient of a Melbourne Press Club Michael Gordon fellowship in 2022. In 2023 he was a highly commended finalist in the Quill Awards and a winner at the 2024 Excellence in Civil Liberties journalism awards. In 2024 he was elected to serve on the Federal Council (National Media Section) of the MEAA. Jarni has a Bachelor of Communications (Journalism) from the Royal Melbourne Institute of Technology (RMIT). LinkedIn
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