What Google's AI Overview Means for Local Retail Search

Google's AI Overview isn't coming. It's already here. And it's fundamentally changing how customers find products near them.

As of late 2025, AI Overviews appear in roughly 16% of all search queries and they peaked at nearly 25% mid-year. For retailers, the implications are massive. Traditional SEO tactics that worked for decades are losing ground to AI-generated summaries that answer customer questions before they ever click a link.

The question isn't whether this shift affects your business. It's whether you're positioned to win or disappear.

The Numbers Tell the Story

Recent research from Seer Interactive paints a stark picture. Organic click-through rates for queries with AI Overviews have dropped from 1.76% to just 0.61%. Paid CTR has crashed even harder, falling 68% from 19.7% to 6.34%. But here's what most retailers miss: brands that get cited in AI Overviews earn 35% more organic clicks and 91% more paid clicks than those that don't. Citation isn't just nice to have it's becoming the new currency of search visibility.

The data from Semrush shows dramatic growth in AI Overview presence across retail-adjacent categories. Between March 13 and 27, 2025, AI Overview appearances grew by 528% for entertainment queries, 387% for restaurant queries, and 381% for travel queries. Food and drink, once barely touched by AI summaries has seen the fastest category growth of the entire year.

What Google AI Overview Means for Local Retail

Local search is experiencing a paradox. Research from Local Falcon found that AI Overviews appear in 40.2% of local business queries, yet unlike traditional local packs, proximity barely matters for ranking within those results.

Think about what that means. For decades, local SEO was built on a simple premise: get your store info right, be close to the searcher, collect reviews, and you'd show up. That playbook is breaking down.

The correlation between distance and ranking position in AI Overviews is effectively zero. What matters instead? Content structure. Authority. Whether your information is formatted in a way AI can parse, summarize, and cite.

The Product-Location Gap

Most retailers still structure their digital presence around stores a store locator, location pages, maybe some local landing pages. But customers search at the product level: "Nike shoes Brooklyn," "gluten-free dog food near me," "iPhone 15 cases Manhattan."

This mismatch is where revenue disappears. When someone asks ChatGPT or Google's AI Mode where to buy a specific product nearby, the brands with product-location connections get recommended. Those with only store-level information get overlooked.

The stakes are enormous. 76% of "near me" searches result in store visits within a day. 88% of mobile local searches lead to visits within 24 hours. These are high-intent customers ready to buy, if they can find you.

The Rise of AI Mode and Multi-Platform Discovery

Google I/O 2025 introduced AI Mode, a fully AI-powered search experience rolling out across the U.S. But Google isn't the only player reshaping discovery.

According to the data, ChatGPT now has 800 million weekly active users. Perplexity processed 780 million queries in May 2025 alone. 58% of consumers trust AI to give product and brand recommendations. Your customers aren't just using Google anymore, they're asking AI assistants where to find products near them.

This is the shift from SEO to GEO (Generative Engine Optimization). The brands that adapt will own this new discovery layer. Those that don't will watch their visibility erode quarter by quarter.

What AI Needs to Recommend You

AI-powered search engines have different requirements than traditional search. They need:

Structured, crawlable content. Your product and store information must be formatted in ways AI can parse and summarize. Unstructured pages and PDFs don't get cited.

Local context at the product level. AI needs to understand which products are available at which locations. A generic product page with a store locator link isn't enough.

Fresh, regularly updated information. AI models favor sources that signal relevance through recency. Stale content gets deprioritized.

Authority signals. 97% of AI Overview citations come from sites ranking in the top 20 organic results. Building authority still matters but it's table stakes, not the whole game.

The Measurement Challenge

One uncomfortable reality: you can't easily track traffic from AI Overviews or AI Mode. Google isn't offering segmented analytics for these sources. Traditional rank tracking becomes unreliable when results are personalized for each user.

This forces a shift in how we measure success. Rankings alone don't tell the story anymore. What matters now: share of voice in AI responses, citation frequency, and whether AI systems understand your brand well enough to recommend it.

Where This Leaves Multi-Location Retailers

The retailers winning in this environment aren't tweaking their existing SEO tactics. They're building entirely new visibility infrastructure.

Instead of one product page and separate store pages, they're creating product-location connections at scale, thousands of search-ready pages that connect each product to each store. When customers search "Nike shoes Brooklyn," these retailers appear. When AI answers "where can I buy this nearby," these retailers get recommended.

This isn't traditional SEO. It's building a discovery layer that speaks the language of modern search behavior, structured for AI, localized to the product level, and updated continuously.

The Window Is Open For Now

Google AI Overviews expanded coverage to new countries and languages throughout 2025. AI Mode is rolling out. ChatGPT and Perplexity continue growing. The shift toward AI-powered discovery is accelerating.

But there's a window right now while competitors are still figuring this out to establish your brand as the answer AI systems recommend.

The math is simple. Your inventory multiplied by your locations equals your competitive advantage. Every product in every store represents a chance to capture high-intent local customers at the exact moment they're ready to buy.

The question is whether you're building the infrastructure to capture that opportunity or watching it walk past your door.