Good morning,

Retailers are increasingly using AI to predict what shoppers will buy next, and Sam’s Club is the latest to put that data to work. Its new AI tools use more than 400 intent signals to help brands identify future customers, predict their value, and even spot when shoppers may be ready to replace products such as TVs and gaming consoles.

Let’s dive into today’s edition.

Amazon is planning a major expansion of its same-day delivery network, targeting more than 1,000 same-day fulfillment centers by 2031, up from about 85 today, according to a Business Insider report.

Delivery Race: The plan, codenamed Project Mercury, is expected to require billions of dollars in investment. Amazon’s three-year operating plan budgets $6.8 billion for U.S. same-day capacity in 2026 and 2027, while an internal finance review estimates the project could generate $7.1 billion in economic value over 10 years and become cash-flow positive by 2030.

The smaller facilities, known as SSDs, are projected to handle 28% of Amazon-fulfilled volume by 2029 and 50% by 2035.

Big Picture: The expansion is aimed in part at closing Amazon’s physical-proximity gap with Walmart, whose stores put about 90% of the U.S. population within 10 miles of a Walmart or Sam’s Club.

Amazon is also developing roughly 100,000-square-foot Orbital facilities, each expected to process about 75,000 same-day and perishable units a day, with estimated capital spending of $48.4 million per facility.

Two U.S. senators are asking the Federal Trade Commission to investigate Amazon’s Alexa for Shopping and Walmart’s Sparky AI over claims that the chatbots may suppress information about U.S.-made products and fail to flag misleading “Made in USA” claims.

Study Findings: The study, led by a think tank headed by former FTC Chair Lina Khan, found that the AI assistants could identify potentially false “Made in USA” labels but were not consistently using that capability to flag suspicious listings.

In one example cited by the senators, Alexa reportedly said a Made in USA filter could “redirect significant sales away from their largest seller base,” referring to overseas manufacturers.

Key Details: Amazon rejected the suggestion that it intentionally withholds country-of-origin information, saying Alexa for Shopping currently directs customers who ask about origin to product-detail pages. The senators’ request follows FTC letters sent to Amazon and Walmart last year urging the companies to better police third-party sellers’ Made in USA claims.

The U.S. Postal Service has added one to two days to delivery estimates for some mail as it shifts more volume from air to ground transportation and redesigns its processing network. Some post offices have also ended afternoon or end-of-day collections, meaning mail dropped after the morning pickup can sit until the next business day.

Key Details: USPS has missed most First-Class Mail service targets since 2022, even after lowering its standards to account for the network changes. Rural customers are particularly affected because their post offices are often farther from regional processing centers.

Big Picture: The changes are part of USPS’s Delivering for America plan, which aims to reduce costs and move the agency toward financial self-sufficiency. The GAO said longer delivery times can affect time-sensitive mail, including medications, bill payments and tax filings, and recommended that USPS provide more detail on its planned service improvements and their expected impact.

U.S. retail sales rose 1.2% in August, the biggest increase since March, as households increased spending across a broad range of goods and at restaurants and bars

Key Details: The gain followed a revised 0.5% decline in July and exceeded economists’ forecast of a 0.8% increase. Sales were up 6.0% from a year earlier, while core retail sales, which exclude automobiles, gasoline, building materials and food services, jumped 1.4%, the strongest increase since September 2024.

The increase was broad-based, with nonstore retailers up 2.6%, clothing stores up 0.7%, vehicle and parts dealers up 0.6%, furniture stores up 0.9%, and electronics and appliance stores up 1.6%.

Future Outlook: The stronger sales data prompted economists at Goldman Sachs to raise their third-quarter GDP growth estimate to 3.0% from 2.5%, while JPMorgan lifted its estimate to 3.5% from 2.75%. But inflation pressures are building: import prices rose 0.7% in August and 7.0% year over year, the largest annual increase since August 2022.

FedEx has launched FedEx Authenticated Delivery, a premium service for eligible residential and commercial shipments in the U.S. and Canada that uses QR-code authentication to help prevent fraud, theft, and misdelivery. The service is aimed at high-value and sensitive shipments, including luxury goods, electronics, healthcare products, aerospace equipment, and collectibles.

What’s Happening? Under the new system, recipients receive a unique QR code and delivery instructions through FedEx notifications. The recipient must be present at delivery and show the code to the FedEx driver, who scans and validates it before releasing the package. Unlike traditional signature-required deliveries, no physical signature is needed.

Security Layer: The service adds another layer of control to FedEx's Proof of Delivery offering. Recipients can track delivery instructions and shipment information through FedEx notifications, while certain delivery changes—including Hold at Location, Redirect to Hold, and address corrections—are restricted to maintain shipment security.

Google is rolling out new tools to help retailers capture holiday shoppers as consumers increasingly use AI to discover products and make purchasing decisions.

Key Details: AI performance insights are now available in Merchant Center across Australia, Canada, India, New Zealand, and the U.S., giving businesses visibility into how their brands and products appear across AI Mode and AI Overviews.

Google is also testing a Business Agent for YouTube ads in the U.S., allowing shoppers to ask product questions and get tailored guidance without leaving YouTube.

Direct Checkout: Google is also expanding its Universal Commerce Protocol (UCP), which enables direct checkout across Google. Merchants using the UCP integration hub can now enable features including cart transfer to merchant websites and enhanced checkout-flow testing, with analytics coming later.

The European Union will introduce a new handling fee on each low-value item ordered directly from sellers outside the bloc, adding another cost for shoppers buying from platforms such as Temu, Shein and AliExpress.

New Fee: EU member states must begin collecting the fee by Nov. 1, although the European Commission has not yet set the amount. The charge will come on top of the temporary €3 customs duty introduced in July.

Companies that repeatedly violate the rules could face fines of 1% to 6% of the value of goods imported during the previous year, while a new EU Customs Authority in Lille will coordinate enforcement.

Change in Plans: The change could push platforms to rethink how they move goods into Europe. Under the new customs rules, companies will have an incentive to import products in bulk and store them in European warehouses, where goods shipped to customers would qualify for a lower handling fee.

The EU received about 5.8 billion low-value parcels in 2025, up 26% from the previous year, with the European Commission estimating that 65% were undervalued.

Uber and Costco have expanded their U.S. Uber Eats partnership to 47 states, up from 17, bringing delivery from nearly 600 Costco warehouses to members across the country.

What’s Happening? Costco shoppers can order the retailer’s full range of products through Uber Eats, and customers must verify their Costco membership before purchasing.

The expansion also gives some Costco members access to Uber One discounts, while customers can purchase Costco memberships directly through the Uber Eats app. For Uber, the deal expands its reach into everyday retail and grocery spending, while giving Costco another delivery channel as consumers increasingly expect goods from large-format retailers to arrive at home.

Big Picture: The move comes as competition in grocery and retail delivery intensifies. Instacart, DoorDash and Amazon Fresh remain major players, while Walmart has been expanding beyond its own store inventory with Walmart Restaurant Delivery, including partnerships with Subway and Dunkin’.