Walmart (WMT) may bring advertising to its Sparky shopping tool as it explores additional uses for its agentic AI search agent and new ways to monetize chat-driven shopping.
In an effort to stay ahead of online rivals and keep shoppers engaged, the retail giant is testing several types of ad placement and product recommendations that will enable Walmart online shoppers to navigate its e-commerce website more effectively and efficiently, while at the same time creating an additional revenue stream for the company.
According to The Wall Street Journal, Walmart (WMT) is developing a ChatGPT-like feature called “Sponsored Prompt” that can summarize customer reviews, compare products and suggest items to purchase through the Sparky shopping assistant.
The new ad format uses Sparky conversations for “brand engagement and personalized product recommendations,” according to a sales presentation viewed by The Wall Street Journal. Based on the user’s query, a sponsored prompt was served, enabling users to click on the prompt and receive an answer from Sparky. A click-to-buy ad for the product appeared below Sparky’s response.
The format is in the early stages of development.
The enhanced Sparky search tool closely mirrors a similar search agent used by Amazon (AMZN) shoppers called “Rufus.” According to Amazon (AMZN) CEO Andy Jassy, Rufus has had 250 million active customers this year. With shoppers 60% more likely to complete a purchase using Rufus, the search agent is on track to deliver over $10B in incremental annualized sales.
“Our generative AI-powered audio feature that combines product summaries and reviews to make shopping easier has expanded from hundreds of products at launch to millions of products, and millions of customers have used it, streaming almost 3 million minutes,” Jassy said on the company’s most recent earnings call.
Although Sparky engagement has been low, Walmart hopes to develop new ways to augment its high-margin ad business, and go head-to-head with Amazon (AMZN).