The growing use of artificial intelligence (AI) shopping agents is creating a major challenge for retail giants such as Amazon and Walmart, raising questions about how they can support automated shopping while protecting their lucrative advertising businesses and access to consumer data.
Amazon and Walmart are the world’s two largest retail media businesses, together accounting for an estimated 88% of the $74.4 billion US retail media market, according to projections from research firm Emarketer.
However, AI-powered agents capable of researching and purchasing products on behalf of consumers could disrupt this business model. These tools may reduce shoppers’ reliance on retailers’ websites and apps, where brands currently pay to promote their products.
Morgan Stanley researchers estimated in July that AI shopping agents could account for 10% to 20% of US e-commerce spending by 2030.
The two retail giants are taking different approaches to the emerging technology. Amazon has restricted access to Meta’s recently introduced Muse shopping agent, while Walmart has partnered with the company to support agent-driven commerce.
Amazon and Walmart take different paths
Amazon blocked Meta’s Muse from accessing its website in September, alleging that the tool had accessed its online store without authorization and captured and stored customer credentials. Meta declined to comment.
Amazon told Reuters that third-party shopping agents should operate transparently and respect service providers’ decisions about whether to allow them to access their platforms.
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The company has also been involved in a legal dispute over Perplexity’s Comet shopping agent. Amazon secured a court order blocking the tool in March, but the US Ninth Circuit Court of Appeals overturned the ban in August. Amazon said it disagreed with the ruling, and the case remains ongoing.
Walmart, meanwhile, has adopted a more open approach. On October 21, it introduced infrastructure designed to support third-party agentic commerce.
Under the system, Walmart creates a profile for an AI agent browsing its platform and links it to the shopper’s Walmart account. Customers can approve purchases or establish spending limits.
The strategy could help Walmart remain part of the shopping process even when consumers rely on external AI assistants.
Advertising revenue at stake
Retail media has become an important source of income for both companies. Walmart CFO John David Rainey told analysts and investors in August that advertising, including its Walmart Connect business, alongside membership and marketplace operations, contributed 45% of the company’s quarterly operating income growth.
Walmart does not separately disclose Walmart Connect’s financial performance in its earnings releases.
Amazon CEO Andy Jassy said last week that third-party AI agents had not yet created a meaningful impact on the company’s advertising business.
Nevertheless, Amazon’s advertising revenue increased 11% year over year in the third quarter, marking its slowest growth in nearly four years, according to LSEG data. Advertising consistently accounts for around 10% of Amazon’s total net sales.
Dan Marc, CEO of retail media platform Footprints AI, expects retailers to pursue multiyear advertising agreements with their largest brand partners to protect revenue. He also anticipates greater discounts on digital retail media advertising as shoppers increasingly use large language models and AI agents.
Walmart declined to comment.
Brands prepare for an AI-driven marketing shift
Despite the disruption, analysts believe retail media is more likely to evolve than disappear.
Morningstar analyst Brett Husslein described the development as an evolution rather than an existential threat to the industry.
Emarketer forecasts that brands will spend 22.6% more on retail media in 2026 compared with the previous year’s $60.7 billion.
Both Amazon and Walmart are also experimenting with advertising inside their AI-powered shopping services. Walmart has started testing advertisements within its Sparky shopping chatbot, while Amazon has incorporated advertising into its Alexa for Shopping assistant.
The shift could change how brands promote products. Instead of relying primarily on eye-catching images and emotional messaging, advertising may increasingly depend on accurate product information that matches shoppers’ specific questions and requirements.
Companies such as Procter & Gamble, Nestlé and L’Oréal are already working to make their product information easier for AI agents to understand and process.
Andrew Lederman, Mondelez’s vice president of global digital commerce, said AI agents are bringing brands closer to consumers. However, he noted in an April podcast that retailer media platforms still generate the vast majority of the company’s sales volume.
Amie Owen, chief client officer at digital commerce consultancy Flywheel, said brands should not immediately shift their retail media budgets but should prepare for changes in how consumers discover products and make purchasing decisions.
Could AI agents reshape retail advertising?
Katherine Black, a senior consultant at Kearney, expects retail media to potentially develop into a bidding-based system.
Under this model, AI agents could search for products that meet consumers’ budgets, while retailers establish minimum and maximum price limits.
The changing landscape is likely to push retailers to rethink how they engage with customers and advertisers.
For Amazon and Walmart, the challenge will be finding a balance between embracing AI-powered shopping and protecting the advertising revenue and customer relationships that underpin their businesses.
