Target will spend $1 billion in 2026 on guest experiences, including AI and brand marketing.
Internally, Target has developed tools to help employees manage store operations. Another tool, called Target Trend Brain, helps designers synthesize trend data to create products more quickly, Prat Vemana, Target’s chief information and product officer, told ADWEEK.
The consumer-facing AI strategy heavily leans on partnerships with OpenAI’s ChatGPT and Google’s Gemini. In November, Target signed a deal to make an assortment of products shoppable through ChatGPT. Target and OpenAI’s design teams also quickly developed and launched a ChatGPT-specific app powered by AI in one month, Venama said. Target’s OpenAI deal also includes the ability for Roundel—the retailer’s ad arm—to sell ads as part of ChatGPT’s nascent advertising program.
“That is the speed that we are responding to them,” Vemana said. “You have to be at that pace and speed—otherwise it’s hard to innovate with them.”
The ChatGPT app is connected to Target accounts so that shoppers can buy additional products from Target, get personalized recommendations based on their shopping history, and choose either in-store pickup or having items shipped. Unlike Target’s mobile app, the ChatGPT version of the app shows more recommended products because of AI’s broader queries. For example, someone who searches for “things to bring on vacation” within Target’s ChatGPT app may first see snacks. After looking at the product page for the snacks, Target may recommend swimwear products or sunscreen.
“It takes you through the funnel very easily—you’re going from a chat world to a browse world,” Vemana said.
ChatGPT has recently changed its commerce strategy away from instant checkout to directing users to retailers’ apps, potentially benefiting Target’s ChatGPT-specific app.
“I would probably not write off anything yet—the reason I say that is they’re testing different ideas,” Vemana said. “We are switching from that search browse to a conversational paradigm.”
Separately, Target is also working with Google to make products shoppable through Google Search’s AI Mode and AI assistant Gemini.
Target’s Vemana said the retailer wants to be a first mover in AI commerce but that it’s unclear how retail transactions will take place within AI answer engines. AI-driven referral traffic is growing but primarily comes from consumers researching and discovering products. For example, people are asking AI answer engines for product recommendations for a trip or hosting a movie night, but they are not buying groceries—yet.
“Our early learnings are that people are still more in the upper funnel, in the inspiration space,” he said.
Walmart’s ecommerce push
Walmart’s AI strategy is an extension of the retailer’s ecommerce investment over the past few years that has helped it gain market share and become a bigger competitor to Amazon.
The bulk of Walmart’s AI work is developed in-house around four “super agents.”
