Two of America’s biggest retailers and longtime rivals—Walmart and Target—are betting big on how AI influences what people buy. But their strategies are significantly different, and give a glimpse into the state of AI commerce.
Retailers are jockeying for prime placement within AI shopping tools that consumers use to research and buy products. Retailers are building their AI efforts in two ways: by tracking brand visibility and opening up shopping capabilities within AI answer engines like OpenAI’s ChatGPT, Google’s Gemini, and Anthropic’s Claude; and by developing their own LLM-powered tools and chatbots for shoppers and employees.
Walmart and Target were once key rivals, but the retailers have diverged as Walmart has become a bigger tech company, a move evident in its switch last year from listing on the New York Stock Exchange to tech-heavy Nasdaq.
Still, Walmart and Target battle for similar consumers and sales with big-box stores.
Top executives from Walmart and Target recently laid out the retailers’ AI plans. While Walmart is developing its own AI tools for customers and employees, Target is betting on integrating with AI answer engines ChatGPT and Gemini.
ADWEEK asked a handful of retail experts to weigh in on the retailers’ strategies.
“The question for advertisers isn’t just who has AI, but who can turn shopper data into automated optimization the fastest,” said Kashif Zafar, CEO of retail adtech firm Xnurta.
“Right now Walmart is in a strong position because they’re building AI directly into their retail media stack and tying it to their scale in grocery and last-mile fulfillment—that gives them enormous volumes of transaction data to train against and optimize campaigns in Walmart Connect,” he said. “Target has strong first-party data and great engagement in discovery categories like beauty and apparel, but their strategy has historically leaned more on partners.”
Target’s digital transformation
Target is in the midst of a turnaround under new CEO Michael Fiddelke. After years of missed revenue, an investment in technology including AI is one of four priorities Fiddelke laid out earlier this month for growth. The goal of AI is to develop the retailer’s stylish and trend-based merchandise and improve the in-store experience.
