NEW YORK: The rise of artificial intelligence (AI)-led shopping is posing a conundrum for retailers like Walmart and Amazon: how to enable AI agents to shop on their websites, without threatening their lucrative advertising revenue and the customer data that fuels it.
Retail powerhouses Walmart and Amazon are also the world’s two largest retail media businesses, dominating the estimated US$74.4bil in US retail media spending with a combined 88% share of that market, according to projections from data firm Emarketer.
But digital assistants could soon disrupt that business.
AI-powered agents that can research and purchase products on consumers’ behalf – like Meta’s recently released Muse – could erode the highly profitable business of brands paying retailers to promote products on their websites and apps.
Morgan Stanley researchers said in July these agents could account for 10% to 20% of US eCommerce spending by 2030.
Amazon and Walmart are taking different approaches to agentic AI shopping. Amazon has blocked Muse, while Walmart is partnering with Meta’s agentic tool.
So far, there is no meaningful effect yet on Amazon ads from third-party agents, Amazon chief executive officer Andy Jassy said last week.
However, the company’s 11% year-on-year growth in advertising revenue for the third quarter was its slowest pace of growth in four years, LSEG data showed. — Reuters
