AI-powered shopping agents are reshaping online retail, creating challenges for Amazon and Walmart as retailers try to protect advertising revenue, customer data and brand partnerships.
The growing popularity of artificial intelligence-powered shopping agents is creating new challenges for major online retailers, including Amazon and Walmart. These AI tools can independently search for products, compare prices and complete purchases on behalf of consumers, potentially changing how people discover and buy products online.
However, this shift could threaten one of the most profitable parts of retail businesses: digital advertising. Retailers must now find ways to accommodate AI-driven shopping while protecting their advertising revenue and access to valuable customer data.
According to projections from research firm Emarketer, Amazon and Walmart together account for approximately 88% of the estimated $74.4 billion US retail media market. The growing adoption of AI shopping assistants could disrupt this established business model.
AI shopping agents are designed to understand consumer requirements, identify suitable products and make purchases with minimal human involvement.
Tools such as Meta's recently introduced Muse could change the traditional online shopping experience. Instead of browsing retailer websites and clicking on sponsored product listings, consumers may increasingly depend on AI assistants to recommend and purchase products.
This development could reduce the visibility of traditional advertisements on shopping platforms. Brands currently pay retailers to promote their products through sponsored listings, search results and display advertisements.
Research from Morgan Stanley suggests that AI shopping agents could account for 10% to 20% of US e-commerce spending by 2030.
If this prediction materialises, retailers may need to rethink their advertising strategies and find new ways to monetise AI-driven shopping activity.
Amazon and Walmart are approaching the growing agentic commerce market differently. While Amazon has restricted certain third-party AI shopping tools, Walmart is working with external platforms to support AI-powered purchases.
Amazon blocked Meta's Muse shopping agent from accessing its website in September. The company argued that the tool had accessed its online store without permission and collected and stored customer login credentials.
Amazon has maintained that third-party AI agents should operate transparently and respect the decisions of service providers regarding access to their platforms.
The company has also been involved in a legal dispute with Perplexity over its Comet shopping agent. Amazon obtained a court order restricting the tool in March, but the US Court of Appeals for the Ninth Circuit overturned the restriction in August. The legal dispute remains ongoing.
Amazon CEO Andy Jassy recently said that third-party AI agents have not yet had a meaningful impact on the company's advertising business.
However, the company's advertising revenue increased by 11% year-on-year in the third quarter, marking its slowest growth rate in nearly four years, according to LSEG data.
Walmart is taking a more collaborative approach. On October 21, the retailer introduced infrastructure designed to support third-party agentic commerce.
Under this system, customers using external AI agents to shop on Walmart can receive an individual agent profile connected to their Walmart accounts.
This arrangement allows consumers to approve transactions and establish spending limits, providing greater control over purchases made through AI assistants.
Walmart CFO John David Rainey previously highlighted the importance of advertising, membership programmes and marketplace operations. Together, these businesses contributed 45% of the company's quarterly operating income growth.
The growing influence of AI shopping agents could encourage retailers to reconsider how they generate advertising income.
Dan Marc, CEO of retail media platform Footprints AI, believes major retailers could introduce multi-year advertising agreements with their biggest brand partners to protect revenue.
He also expects digital retail advertising prices to face pressure as consumers increasingly use AI assistants and large language models to discover products.
Such changes could make advertising partnerships and product visibility more competitive in the coming years.
Despite concerns about disruption, industry analysts believe AI shopping agents could create new opportunities for retail media businesses.
Morningstar analyst Brett Husslein has described the development as an evolution rather than an existential threat to retail advertising.
Emarketer forecasts that brands will increase their retail media spending by 22.6% in 2026 compared with the $60.7 billion spent in 2025.
Retailers are also experimenting with advertisements within their own AI-powered shopping assistants.
Walmart: The company has started testing advertisements within Sparky, its AI shopping chatbot.
Amazon: The retailer has integrated advertising into its AI shopping assistant, Alexa for Shopping.
These developments suggest that retailers are exploring ways to keep advertising relevant even as shopping experiences become increasingly automated.
AI-driven shopping could also change how companies promote their products.
Traditional digital advertising often depends on attractive images, promotional messages and brand storytelling. However, AI agents may prioritise structured product information, specifications, prices and features when recommending products.
Major consumer brands, including Procter & Gamble, Nestle and L'Oreal, are working to make their product information easier for AI systems to understand and process.
Mondelez's Vice President of Global Digital Commerce, Andrew Lederman, has also highlighted how AI agents could bring brands closer to consumers.
Meanwhile, digital commerce consultancy Flywheel has advised businesses to prepare for changing product discovery and purchasing behaviour rather than immediately shifting their advertising budgets.
The long-term development of agentic commerce could fundamentally change the relationship between retailers, brands and consumers. Kearney senior consultant Katherine Black believes retail media could eventually evolve into a bidding-based system.
In this potential model, AI agents would search for products that match consumers' preferred prices and requirements, while retailers could establish minimum and maximum pricing limits.
Such a system could make product recommendations more personalised and price-focused, reducing the importance of traditional advertising placements.
Conclusion
AI shopping agents are creating a new competitive environment for Amazon, Walmart and other major retailers. Although automated shopping could challenge traditional advertising models, it may also create new opportunities through AI-powered promotions, personalised recommendations and product discovery. Retailers that successfully adapt their advertising strategies could remain competitive as agentic commerce expands.