AI Shopping Agents Challenge Retail Giants' Lucrative Advertising Models
Retail giants Amazon and Walmart face a major shift as AI shopping agents threaten their multi-billion dollar digital advertising and customer data businesses.
The rapid growth of artificial intelligence in retail is creating a complex challenge for major online marketplace operators like Amazon and Walmart. These retail giants have built massive digital advertising empires, dominating the US retail media sector. Together, Amazon and Walmart capture an 88% share of this market, which Emarketer projects will reach $74.4 billion in US spending. However, the emergence of automated AI agents capable of searching and buying items on behalf of consumers threatens this highly profitable foundation.
Promoted product placements on retail apps and websites generate significant revenue for these companies. Industry researchers at Morgan Stanley estimated in July that agentic AI systems could drive between 10% and 20% of all US e-commerce transactions by 2030. In response to this shifting landscape, Amazon and Walmart have chosen distinctly different strategies for managing automated digital assistants.
Contrasting Strategies from Industry Leaders
Amazon has taken a restrictive approach toward external AI shopping tools. In September, the company blocked Meta's AI shopping agent Muse, stating the tool accessed its platform without permission and handled user credentials. Amazon also previously sought a court order against Perplexity’s shopping agent Comet in March. Although an appeals court overturned that ban in August, the legal battle continues. Meanwhile, Amazon reported third-quarter advertising revenue growth of 11% year-over-year, which marks its slowest expansion pace in nearly four years, though the segment still represents about 10% of total net sales.
In contrast, Walmart has embraced a collaborative model. The company introduced infrastructure to support third-party agentic commerce, allowing agent tools to link securely with customer accounts while consumers maintain control over purchase approvals and budgets. Walmart executive John David Rainey noted in August that digital advertising, marketplace operations, and memberships drove 45% of quarterly operating income growth. While facing these technological changes, developers can try top AI models cheaply through one API at https://apixoai.online.
What it means for developers
For developers building agentic AI and automated e-commerce tools, the friction between retailers highlights the need for transparent protocols and respect for platform boundaries. As retail media evolves, developers must design agents that interact cleanly with retailer infrastructure, respect authorization rules, and handle user credentials securely. Furthermore, as brands adapt product data to be easily digested by language models, engineering teams will play a critical role in structuring product feeds so that AI systems can reliably parse specs, pricing, and availability across competing retail platforms.
Adapting to the Future of Retail Media
Industry analysts view the rise of AI shopping assistants as a gradual evolution rather than an immediate wipeout of traditional retail media. Emarketer projections indicate that overall brand spending on retail media will continue to rise. Both Walmart and Amazon have begun testing native advertising within their own proprietary AI tools, such as Walmart's Sparky chatbot and Amazon's Alexa for Shopping.
Brand manufacturers are currently working to format their product details so automated systems can easily process them. While traditional retail media sites still handle the bulk of current volume, consultancies advise brands to prepare for a future where discovery and purchasing happen primarily through conversational assistants and autonomous agents.
Source: AI shopping agents could threaten Amazon and Walmart’s ad business — Indian Express AI. Written by the Apixo team from that report.
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