On March 24, OpenAI announced it was stepping back from Instant Checkout. Hours later, Sephora announced its ChatGPT app — built for beauty advice, not purchases. The only AI commerce integration that currently works is advisory.

Instant Checkout’s collapse was structural. Modern Retail reported that Walmart found conversion rates inside ChatGPT ran three times lower than for click-out links; only around a dozen merchants integrated at all. OpenAI, as quoted by Modern Retail, attributed the failure to a “flexibility” gap. More precisely: no real-time inventory synchronization, no state sales tax infrastructure as of February 2026.

The Information’s finding, surfaced by Modern Retail, completes the picture: ChatGPT users were researching products but completing purchases elsewhere. That was not a conversion problem. That was users behaving exactly as intended — thinking with a language model, then buying somewhere they trust.

Sephora read that signal correctly. Its ChatGPT app, announced the same morning as OpenAI’s retreat and covered by Retail Dive, handles advice and discovery; checkout routes back to Sephora’s site, where Beauty Insider loyalty and samples travel with the transaction. Anca Marola, Sephora’s Global Chief Digital Officer, said at Shoptalk Spring: “The customer is seeking advice from people who know best.” The ChatGPT app extends that position; it does not compete with it.

Adobe Analytics data, cited by Lengow, showed generative AI drove a 693% year-on-year increase in retail site traffic during the 2025 holiday season. Sephora is building for that referral. Instant Checkout tried to stop the traffic in the channel and capture the transaction there.

OpenAI’s head of product partnerships Mahak Sharma told the same Shoptalk audience that more than half of ChatGPT queries are now problem-led, not transactional. Marshal Cohen, Chief Retail Adviser at Circana, put the retailer’s concern plainly: “Why would I want to give someone else control of my customer base?”

There is no good answer to that question inside the Instant Checkout model. Inside Sephora’s model there is a practical one: meet the customer in the consideration and route the purchase to where the loyalty lives.

Checkout is where margin is set, where loyalty data is captured, where the brand controls what happens next. Advisory AI cedes none of that. It creates intent; the brand closes it.

Etsy, Walmart, Lowe’s, and CarMax are all building ChatGPT apps that direct users back to their own platforms for purchase. Sephora is not the exception to the pattern; it is the one that stated the conclusion plainly, on the instructive day.

Advisory AI generates referral traffic. Transactional AI generated tax headaches and three-times-lower conversion rates. For now — and “for now” is doing real work in that sentence — the model that survives is advisory.