AI shopping is here and it's going to cost you 4%

Your Weekly DTC Industry Roundup

Another week in ecommerce, and the platforms are making moves that will fundamentally change how brands show up, sell products, and pay for access to customers.

Shopify just announced a 4% fee on sales made through ChatGPT's checkout. Instagram's ad inventory is now dominated by Reels, with over half of all ads running in short-form video. Google and OpenAI are turning AI assistants into full sales engines. And Common Thread Collective is closting public enrollment to ADmission forever.

Here's what happened this week:

• Shopify will charge merchants 4% on ChatGPT checkout sales starting January 26th (on top of existing Shopify fees)
• Consumer brands face mounting challenges in 2026 as acquisition costs rise and retention becomes harder
• Over 50% of Instagram's ads now run on Reels, up from 35% in 2024, while time spent on Reels jumped to 46%
• AI Max and ChatGPT shopping are rewriting the rules for paid media as AI platforms become primary storefronts
• Common Thread Collective closed ADmission to the public permanently on January 28th

Let's dig in.

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Platform Fees

Shopify Will Charge 4% on Every ChatGPT Sale (On Top of Everything Else You're Already Paying)

Starting January 26th, Shopify merchants will pay OpenAI a 4% fee on every sale made through ChatGPT's checkout.

That's on top of the fees you're already paying Shopify.

According to The Information, sales made through Google's AI Mode, Gemini, and Microsoft's Copilot won't have additional fees. For now. But ChatGPT checkout? That'll cost you.

Merchants will be able to opt in or out of ChatGPT checkout by toggling it on or off. But here's the thing: your products will still appear in AI responses with links to your site unless you contact OpenAI directly or block their web crawlers from indexing your listings.

So you can choose whether to pay the 4% fee for native checkout. But you can't choose whether your products show up in ChatGPT recommendations. That's happening either way.

Shopify announced Agentic Storefronts in December, putting merchants' products directly into AI chat interfaces so shoppers can ask questions, compare items, and complete purchases in a single thread. By centralizing checkout through Shopify, the company reduces the risk of merchants losing visibility inside AI ecosystems they don't control.

OpenAI launched Instant Checkout in September, enabling shoppers to complete purchases inside the chat instead of being redirected to external sites. It initially supported Etsy products and is now expanding to include Shopify merchants.

During a November earnings call, Shopify President Harley Finkelstein said AI-driven traffic to Shopify stores increased by 7X since January, and orders attributed to AI searches increased by 11X.

Translation: AI shopping is real. It's growing fast. And Shopify is positioning itself as the infrastructure layer that connects merchants to AI platforms.

But that access comes with a price tag. And if ChatGPT becomes a primary discovery channel, that 4% fee could add up quickly.

Read full breakdown

Market Headwinds

The 4 Challenges Crushing Consumer Brands in 2026

Consumer ecommerce brands are facing a perfect storm in 2026.

Rising acquisition costs. Harder retention. Platform dependency. Economic uncertainty.

Forbes Finance Council identified four key challenges hitting DTC brands this year, and they're not getting easier to solve.

Challenge 1: Customer Acquisition Costs Keep Climbing

Meta and Google ad costs continue rising while iOS privacy changes make targeting less precise.

Brands that relied on cheap Facebook ads to scale are now paying 2-3X more for the same customer. And that's assuming the customer even converts.

Challenge 2: Retention Is Getting Harder

Customers are more price-sensitive and less loyal than ever. Subscription models that worked in 2020 are seeing higher churn.

Repeat purchase rates are dropping.

Building a relationship with customers requires more effort and better products than just running a discount email campaign.

Challenge 3: Platform Dependency Is a Risk

Most DTC brands rely heavily on a handful of platforms for traffic, sales, and fulfillment.

Amazon. Shopify. Meta. Google. TikTok. When those platforms change their terms, increase fees, or shift algorithms, brands have limited options.

Diversification sounds good in theory, but most brands don't have the resources to execute it effectively.

Challenge 4: Economic Uncertainty Is Making Shoppers Cautious

Inflation. Tariffs. Recession fears. Consumer confidence is shaky. People are still spending, but they're being way more selective about where and how. Impulse purchases are down. Price comparison is up.

And brands that can't clearly articulate their value proposition are getting left behind.

The brands that survive 2026 will be the ones that figure out how to acquire customers profitably, retain them effectively, and build enough resilience to weather platform changes and economic headwinds.

Everyone else will keep burning cash hoping things get easier. They won't.

See full analysis

Platform Shift

Over Half of Instagram's Ads Now Run on Reels (And Time Spent Jumped 24%)

More than half of all ads on Meta's Instagram ran in Reels in 2025, up from 35% in 2024, according to data from Sensor Tower.

In the US, Reels accounted for 46% of time spent on Instagram in 2025, up from 37% in 2024. On Facebook, Reels reached 29% of time spent, up from 24%.

Advertisers have followed this trend, shifting their focus toward short-form video to reach more consumers where they're actually spending time.

"Legacy services are seeing ad volume shift away, with advertisers prioritizing more Reels to meet users where they are," said Abraham Yousef, senior insights analyst at Sensor Tower.

But Reels presents monetization challenges for Meta. Short-form video typically generates less revenue than Instagram's main feed. Meta CEO Mark Zuckerberg pointed out this trade-off during a 2023 earnings call when Meta stopped paying creators directly for posting Reels.

"Currently, the monetization efficiency of Reels is much less than Feed," Zuckerberg said. "So the more that Reels grows, even though it adds engagement to the system overall, it takes some time away from Feed and we actually lose money."

However, the data shows that while Reels viewership share goes up, so does overall activity on the app. Instagram's daily active users figure is up 2% since last year, led by increased usage of Reels.

Analysts say the growing share of viewership on Reels can still translate into higher overall advertising revenue for Meta. "Even as you substitute some feed at a higher monetization rate than Reels, you still are growing, in totality, the amount of advertising dollars that advertisers are spending with Meta," said Neuberger Berman senior research analyst Dan Flax.

Zuckerberg announced in October that Instagram and Facebook Reels had surpassed a $50 billion annual run rate. Analysts will be looking to see how that has grown when Meta reports fourth-quarter and full-year results on January 28th.

Instagram launched Reels in August 2020 as a direct response to TikTok's growing popularity. Meta embedded the feature into Facebook the next year. In September, Meta announced that Instagram had amassed 3 billion monthly active users.

While Meta's Reels share continues to grow year over year, Sensor Tower's data showed YouTube's watch time for Shorts was flat last year. Nonetheless, YouTube continues to outpace both Instagram and TikTok on mobile, with daily active users growing 3% in 2025.

TikTok still leads in time spent, with users averaging 81 minutes per day on the app, compared with 80 minutes on YouTube and 55 minutes on Instagram.

Algorithm-driven vertical video has become a central battleground for how social media companies attract users, sell advertising, and sustain growth.

See more details here

Paid Media Evolution

AI Max and ChatGPT Shopping Are Rewriting the Rules for Paid Media

AI platforms aren't just conversational assistants anymore. They're becoming full sales engines.

Google's AI Max and ChatGPT's shopping features are reshaping how brands capture intent and guide customers toward conversion. These tools are potentially becoming the primary digital storefront, redefining how consumer demand is met and challenging traditional targeted campaign strategies.

Launched in May, AI Max was rolled out as part of Google Ads as an AI-driven tool created primarily to help advertisers create ads intended for Google's AI overviews. Using machine learning to predict creative assets, audience, and placement, the feature can adjust bids, budgets, and ad combinations in real time.

AI Max interprets context deeply, anticipates user needs, and delivers tailored assistance based on conversational cues. It helps brands reach the right user at the right moment without relying solely on manual targeting.

ChatGPT's shopping features create a guided AI experience that seamlessly weaves product suggestions within responses. Users don't have to leave the chat to purchase an item. By integrating with online retailers and marketplaces, the features allow users to search for items and see prices, availability, and reviews.

With the introduction of these products, paid search campaigns are becoming more nuanced and moving away from relying solely on traditional strategy elements. AI Max and ChatGPT's shopping features shift some of the power to AI as it interprets intent rather than exact search terms.

However, PPC professionals will keep firm control over excluded keywords, including URL, asset, and negative exclusions. Rather than replacing standard campaigns, these AI-driven formats serve as an additional tool in paid teams' marketing arsenal, allowing them to reach informational searches that were previously difficult to target.

Audience targeting and ad placement also change. Traditionally determined by interests, demographics, and habits, AI Max optimizes placements, creative combinations, and audience segments automatically, while ChatGPT's shopping features surface products based on relevance and context.

This flattens brand identity and differentiation. It also results in marketers losing some control over which ads are shown and when. Plus, traditional levers such as bid adjustments, match types, and scheduling may become secondary to AI's perception of relevance.

The future of paid media may be uncertain, but marketers who stay ahead will remain competitive. Success depends on partnership and personalization, using AI as a strategic aid rather than a replacement.

Paid media teams can optimize campaigns by focusing on data, content, and visibility within AI ecosystems. Campaigns should provide AI with rich, structured signals: accurate product feeds, pricing, descriptions, and reviews. Clarity, consistency, and relevance are critical for AI to recommend products effectively.

Teams should build campaigns around both intent signals and keywords, using AI to predict shopper needs and personalize messaging. Instead of tracking only clicks, marketers must measure how AI influences the shopper journey.

Brand identity remains king. AI-driven shopping can flatten brand tone, so teams should strengthen owned content, community engagement, and omnichannel presence to maintain distinctiveness. Brands that succeed will treat AI not as a competitor but as an integral part of planning, optimization, and measurement.

AI Max and ChatGPT's shopping features are transforming paid media from traditional targeting to AI-powered personalized browsing. Brands that optimize content, track intent, and integrate AI recommendations into strategy will maintain a competitive edge.

The future of paid media is conversational, intelligent, and results-driven. Those who adapt first will shape the next era of ecommerce and consumer decision-making.

Read more here

Opportunity Closing

Common Thread Collective Is Closing ADmission to the Public Forever On January 28th

Common Thread Collective is permanently closing public enrollment to ADmission on January 28th.

After that deadline, the only way to access CTC's agency resources is to become a client or receive an invitation to ADmission.

ADmission was designed to bridge the gap for 6-figure and early 7-figure DTC brand founders who are too big for courses but too small for agencies.

It gave them access to CTC's strategists, SOPs, coaching, and proven systems without paying agency prices.

Members get four live group coaching calls every month (media buying strategy, creative strategy, Q&A with CTC CEO Taylor Holiday, and a wildcard call on email, Google Ads, or other paid social platforms).

They also get in-depth video trainings, 50% off 1-on-1 consulting with CTC strategists, a 30-day free trial of Statlas (plus up to 40% off), and exclusive discounts from industry partners.

The program is closing because it works too well.

CTC now has 161 active members and we're committed to serving them at the highest level possible.

Which means we can't keep bringing in new people.

After January 28th, ADmission is invite-only. Period. No exceptions.

Current ADmission members get to keep their membership and their price as long as they stay active.

But if they leave, they can't come back. Public enrollment is closed forever.

We also hinted that current members will get first access to everything we build next, with offers that nobody else will ever see.

We didn't specify what that looks like or when it's happening, but made it clear that being inside ADmission when those opportunities roll out will matter.

For 6-figure founders who miss the deadline, the only options will be:

• Become a CTC agency client
• Wait for an invitation to ADmission (no guarantee when or if that happens)

The page is shutting down soon. After that the offer is gone. No exceptions.

Claim your spot (6 figure brands only)

Final Thoughts

What This Means for Founders

Platform fees are piling up. Shopify charging 4% on ChatGPT checkout sales (on top of existing fees) is just the beginning.

As AI platforms become primary storefronts, access to those channels will come with a price tag.

Brands need to factor these fees into their unit economics now, not after they've committed to selling through AI checkouts.

Consumer brands face mounting headwinds in 2026.

Rising acquisition costs, harder retention, platform dependency, and economic uncertainty aren't going away.

The brands that survive will be the ones that figure out how to acquire customers profitably, retain them effectively, and build enough resilience to weather platform changes and economic shifts.

Instagram's ad inventory is now dominated by Reels.

Over half of all ads run in short-form video, and time spent on Reels jumped 24% year over year.

Advertisers are following users where they're actually spending time. If your creative strategy isn't built around vertical video, you're missing the majority of available ad inventory on the platform.

AI Max and ChatGPT shopping are rewriting the rules for paid media. Traditional PPC levers like bid adjustments, match types, and scheduling are becoming secondary to AI's perception of relevance.

Brands that optimize product feeds, build campaigns around intent signals, and measure how AI influences the shopper journey will maintain a competitive edge.

Everyone else will keep running ads the old way and wonder why performance is dropping.

None of this is easy. But the operational gaps separating high-performing brands from everyone else are becoming more obvious. Speed of diagnosis and speed of response will determine who adapts to these changes and who spends the year playing catch-up.