Amazon and Walmart Revolutionize Online Shopping with Generative AI

Amazon Adds GenAI Shopping Guides to Personalize eCommerce Experience | PYMNTS.com

Amazon has implemented new generative artificial intelligence (GenAI) technology in an attempt to improve product research and personalize shopping recommendations on its eCommerce platform, joining a growing trend of AI adoption in online retail. The eCommerce giant introduced AI Shopping Guides on Wednesday (Oct. 9) to simplify product research for consumers. These guides, powered by GenAI, consolidate critical product information such as features, brands and customer insights. They appear in search suggestions and on the homepage, allowing shoppers to explore tailored recommendations based on their needs. "Retail and, more specifically, eCommerce, is a crucible for new technologies, in large part because the U.S. market is almost perfectly divided into Amazon vs. everyone else," Eric Best, CEO of retail data management company SoundCommerce, told PYMNTS. "This sets up a perpetual arms race in the industry, where Amazon uses its scale and technology to disrupt a category or feature -- which then gives rise to dozens or sometimes hundreds of venture-funded independent alternatives." Amazon's AI Shopping Guides compile product information and recommendations for various categories using GenAI. The guides can be used alongside Rufus, Amazon's AI assistant, to answer additional customer questions during product research. The competitive landscape for GenAI extends beyond retail. "Amazon Web Services -- and its investment in AI and generative models -- sets up an even bigger competitive duel," Best said. "The counterpoint is the self-proclaimed hundreds of billions being invested in the same capabilities by Microsoft, Google, OpenAI, Apple and Meta; data-focused cloud providers like Snowflake and Databricks; and the thousands of early-stage funded startups building new products on these platforms." Several companies are already making waves in the AI-driven retail space. "Examples of competitive players in the retail space are too numerous to mention, but some of the early winners include companies like SessionAI, which predicts the behavior of shoppers and serves them in-session offers to convert them to buyers; Optimonk also in conversion rate optimization; Octane AI for eCommerce gamification; and ManyChat for eCommerce customer service chatbots," Best said. Amazon's AI integration will likely have significant impacts on consumer behavior, according to Chris Pearce from digital search and content agency Greenpark. "The enhanced GenAI product listings will mean consumers see richer, more detailed product detail pages more quickly than before," Pearce told PYMNTS. "Hyper-personalized recommendations and product descriptions" surfaced throughout the shopping journey and could positively influence shopping behavior. The benefits of AI could be substantial for sellers on Amazon's platform. Pearce said a beta test of an Amazon AI assistant for U.S. sellers, Project Amelia, "looks of real value if it delivers on the claim to offer insights, strategies and even diagnose problems with inventory, revenue and conversion." The potential cost savings for retailers are notable. "Enhanced so-called 'A+ content' that uses GenAI to create engaging listings, lifestyle imager, and brand narratives is a real-time and cost saver," Pearce said. "The icing on the cake? Amazon's 'video generator' -- while a bit glitchy -- offers a potential massive uplift to engagement and conversion at a fraction of the traditional cost." Amazon's AI-driven changes may give the company a temporary edge, but it's likely to be short-lived. "Most eCommerce platforms are rolling out AI enhancement features almost weekly, so any advantage will be short-lived," Pearce said. He also pointed to changing consumer habits that could challenge Amazon's dominance. "At Greenpark, we have seen exponential growth in omnichannel search beyond the big marketplace and search engines. Consumers increasingly turn to social commerce platforms like TikTok shop and Instagram Shopping," he said. The rapid adoption of AI in eCommerce is reshaping the industry landscape. Amazon's moves may force competitors to accelerate their AI initiatives, leading to a new era of innovation in online retail.

Walmart and Amazon Turn to GenAI and Ditch the 'Search' Bar | PYMNTS.com

As Walmart and Amazon compete to provide the best online shopping experiences, both are increasing their use of generative AI (GenAI) to improve search offerings. The former announced Wednesday (Oct. 9) that it is using new AI and augmented reality, among other digital technologies, to offer more immersive and personalized retail journeys. "A standard search bar is no longer the fastest path to purchase -- rather, we must use technology to adapt to customers' individual preferences and needs," Walmart's global chief technology officer and chief development officer Suresh Kumar said in a statement. The company shared that it has developed large language models tailored to retail use cases as well as a more individualized update to its AI-powered customer support chatbot. The retailer also shared its intention to "create a unique homepage for each shopper" using its GenAI, set to launch in the United States before 2026. Amazon, for its part, shared Wednesday in a blog post that it is expanding its use of generative AI to enhance its eCommerce platform with the launch of AI Shopping Guides on its U.S. apps and mobile site. "Guides help you reduce the time spent researching before you make a purchase by proactively consolidating key information you need alongside a relevant selection of products, making it easier to find the right product for your needs quickly," Daniel Lloyd, the eCommerce giant's vice president of personalization, wrote. These guides, which are currently include more than 100 product categories, aim to simplify the product research process by compiling essential information and recommendations in one place. Using large language models, the system identifies key product attributes, features, and customer insights to generate tailored guides and product suggestions. The post came the same day as longtime Amazon exec Matt Woods, who had been with the company for 15 years and who most recently served as vice president of AI, announced his departure via LinkedIn post. Consumers, for their part, have mixed feelings about AI. The PYMNTS Intelligence study "Generation Zillennial: Voice Assistants and GenAI" revealed that most consumers (53%) feel that GenAI is "very open to misuse." Still, shoppers do want the kinds of personalized experiences that GenAI enables. Data highlighted in the March edition of the Payments Orchestration Tracker®, a PYMNTS Intelligence and Spreedly collaboration, revealed that 85% of consumers say that their favorite brands treat them like individuals. Businesses, for their part, see GenAI technology as being key to their future success. The "How Simple, Routine GenAI Use Can Remake Enterprise Marketing" installment of the PYMNTS Intelligence 2024 CAIO Report series drew from a survey of 60 chief marketing officers from U.S. firms with 2023 revenues of at least $1 billion. The findings showed that eight in 10 see GenAI as very or extremely important to the customer experience. As Walmart and Amazon intensify their use of generative AI, both companies are positioning themselves to shape the future of eCommerce. While consumers remain cautious about the technology's potential misuse, their desire for personalized shopping experiences continues to drive demand. With AI-powered search and tailored recommendations becoming central to the online retail journey, these innovations reflect the growing role of GenAI in meeting evolving customer expectations.