AI Agent Glossary: Key Terms for Conversational Commerce and Automation

AI Agent for Commerce

An autonomous software system that uses LLMs and APIs to interact with users, access real-time data, and take actions like processing orders or updating records.

Use case: An agent checks order status, updates inventory, or answers customer questions.

See also: LLM, API

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Chatbot vs AI Agent

• Chatbot: Rule-based, handles scripted flows.
• AI Agent: LLM-powered, understands complex queries, takes real actions.

Example: A chatbot might say "Click 1 for shipping info"; an AI agent understands "Where's my recent order?"

LLM (Large Language Model)

AI trained on massive text datasets to understand and generate human-like text.

Use case: Powering AI agents that understand complex customer requests.

Examples: GPT-4, Claude

NLU (Natural Language Understanding)

AI's ability to interpret human language, including intent, emotion, and context.

Example: Recognizing a user's request to "cancel my last order."

Prompt Engineering

Crafting precise inputs to optimize AI outputs.

Example: Using "Summarize this product description in 3 bullets" for agent-friendly content.

RAG (Retrieval-Augmented Generation)

An AI method where external documents are retrieved and used as context before generating a response.

Example: An AI agent pulls from your return policy FAQ to answer a question about refunds.

See also: Vector Database

AI Hallucination

When an AI generates information that sounds plausible but is incorrect.

Tip: Use RAG and well-structured data to minimize errors.

Example: An agent saying a product is "in stock" when it's not.

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Data & Infrastructure

Structured Data

Organized data in rows, columns, or schemas, such as SKUs, prices, and stock levels.

Example: {"sku": "123", "price": "$19.99"}

See also: Webhook Payload

Unstructured Data

Free-form content like reviews, messages, and product descriptions.

Example: "This hoodie is super soft and fits true to size."

Webhook

Real-time data delivery triggered by an event (e.g., new order, inventory update).

Example: Shopify sends a webhook when a new product is added.

Webhook Payload

The actual JSON-formatted data package sent via a webhook.

Example: {"product": "Classic Tee", "price": "$29"}

See also: Structured Data, Data Sync

Data Sync

Keeping data consistent across platforms in real-time.

Example: Product details updated in Shopify appear instantly in your AI agent.

See also: Webhook, API

Unified Data Layer

A merged format combining multiple data types into a single structure for AI systems.

Example: Product specs + long-form description in one object.

Vector Database

A database that finds similar content by meaning rather than exact words.

Example: Matching "affordable headphones" with "budget wireless earbuds."

See also: RAG

API (Application Programming Interface)

Rules that allow different software to communicate and exchange data.

Example: Shopify Catalog API lets AI agents fetch live product info.

See also: Data Sync, Webhook

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AI Platforms & Ecosystem

No-code Platform

Tools that allow users to build workflows or agents using visual interfaces, no coding required.

Example: Voiceflow lets you build AI flows with drag-and-drop blocks.

Voiceflow

A no-code design tool for creating conversational experiences for chat or voice.

Botpress

An open-source conversational AI platform for building scalable assistants.

Claude

A conversational LLM by Anthropic, focused on safe and intelligent dialogue.

ChatGPT

A conversational LLM by OpenAI, widely used to power AI agents for business tasks.

ChatGPT Shopping Feed

A system enabling merchants to list products in ChatGPT for conversational discovery.

Example: "Show me eco-friendly yoga mats" pulls results from your store catalog.

Shopify MCP (Merchant Center Platform)

Shopify's system for distributing product data to destinations like Google Shopping and ChatGPT.

See also: Shopify Catalog API

Shopify Catalog API

A programmatic interface to access, update, and sync Shopify product data.

Example: Used to populate the ChatGPT Shopping Feed automatically.

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AI Agent Applications

AI Customer Service

Agents that resolve customer queries in real-time without human support.

Example: A virtual agent tracking an order and providing ETA.

See also: Webhook, RAG

Personalized Product Recommendations

AI agents that suggest products based on preferences or behavior.

Example: "Customers who bought this also liked…"

AI Workflow Automation

Agents that perform repetitive tasks like inventory updates, order tagging, or status alerts.

Example: Automatically notifying customers when stock is replenished.