Artificial intelligence shopping agents are posing a potential threat to the advertising businesses of major retailers such as Amazon and Walmart, according to a Reuters report. AI agents like Meta’s Muse can research and purchase products on consumers’ behalf, potentially eroding the highly profitable business of brands paying retailers to promote their products on websites and apps. According to Morgan Stanley, these agents could account for 10% to 20% of U.S. e-commerce spending by 2030.
Amazon and Walmart are also the world’s two largest retail media businesses, dominating the estimated $74.4 billion U.S. retail media market with a combined 88% share, according to projections from data firm eMarketer. However, digital assistants could soon disrupt this business.
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Amazon and Walmart are taking different approaches to agentic AI shopping. Walmart said it is introducing new tools that will allow AI agents to shop and complete transactions on customers’ behalf.
The agents will connect through new “Agent Profiles” within Walmart’s platform. By default, the retailer will require customers to approve all purchases made by AI agents, but users can also authorize agents to shop within a specified budget. Walmart has developed an “Agent Gateway,” currently available in beta, that connects AI agents through the Model Context Protocol (MCP), an open standard that allows AI systems to connect with external services and tools.
Meanwhile, Amazon banned Muse from its website in September, saying it appeared to have accessed its online store without authorization and captured and stored customer credentials. The e-commerce giant told Reuters this week that third-party agents should operate transparently and respect service providers’ decisions about whether to participate.
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So far, there has been no meaningful impact on Amazon’s advertising business from third-party agents, according to CEO Andy Jassy. However, the company’s advertising revenue grew 11% year over year in the third quarter, its slowest growth rate in nearly four years, according to LSEG data. The segment consistently accounts for about 10% of Amazon’s total net sales.
Walmart CFO John David Rainey told analysts and investors in August that advertising, which includes its Walmart Connect retail media business, along with membership and marketplace operations, accounted for 45% of the company’s quarterly operating income growth. Walmart does not separately disclose Walmart Connect’s financial performance in its earnings releases.
Dan Marc, CEO of retail media platform Footprints AI, said he expects companies like Amazon and Walmart to begin signing multiyear advertising agreements with their largest advertisers to secure revenue. He also expects greater discounts on digital retail media ads as shoppers increasingly turn to large language models and agentic AI tools.