CONNECT WITH US
AI & Deeptech

AI & Deeptech

AI shopping agents could threaten Amazon and Walmart's ad business

IndiaTimes (ET) - AI logo

Published on

Add as a preferred source on Google
AI shopping agents could threaten Amazon and Walmart's ad business

Business News Tech AI AI shopping agents could threaten Amazon and Walmart's ad business

Retail powerhouses Walmart and Amazon are also the world's two largest retail media businesses, dominating the estimated $74.4 billion 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.

The rise of 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 $74.4 billion 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 e-commerce spending by 2030.

Amazon and Walmart are taking different approaches to agentic AI shopping. Amazon has blocked Muse, while Walmart is officially partnering with Meta's agentic tool. So far, there is no meaningful effect yet on Amazon ads from third-party agents, Amazon CEO Andy Jassy said last week. However, the company's 11% year-over-year growth in advertising revenue for the third quarter was its slowest pace of growth in nearly four years, LSEG data show.


Source link
Related Topics:AI & Deeptech

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We TheMorningPulse.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It's possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.