AI-powered assistants that research products and make purchases on behalf of consumers could weaken the traditional retail advertising model, in which brands pay retailers to promote products on their websites and apps, Reuters reported.
Amazon and Walmart operate the world’s two largest retail media businesses, accounting for a combined 88% of the estimated $74.4 billion US retail media market, according to projections by research firm Emarketer.
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Morgan Stanley researchers estimated in July that AI shopping agents could account for 10% to 20% of US e-commerce spending by 2030.
The two retailers are taking different approaches to the emerging technology. Amazon has blocked third-party shopping agents, including Meta’s recently launched Muse, while Walmart has partnered with Meta to support agent-based shopping.
Amazon blocked Muse from its website in September, saying it appeared to have accessed the online store without authorization and captured and stored customer credentials. Meta declined to comment.
Amazon also told Reuters that third-party agents should operate transparently and respect service providers’ decisions about whether to allow them on their platforms.
The company previously secured a court order blocking Perplexity’s Comet shopping agent in March. However, the 9th US Circuit Court of Appeals overturned the ban in August. Amazon said it disagreed with the decision, and the case remains ongoing.
Walmart, meanwhile, introduced infrastructure on October 21 to support third-party agent-based shopping. Under the system, the retailer creates a profile for an AI agent that connects to a shopper’s Walmart account. Customers can approve purchases or establish spending limits.
Amazon CEO Andy Jassy said last week that third-party AI agents had not yet had a meaningful impact on the company’s advertising business. However, Amazon’s advertising revenue grew 11% year-on-year in the third quarter, its slowest rate in nearly four years, according to LSEG data. Advertising accounts for about 10% of the company’s total net sales.
Walmart’s advertising operations are also an important contributor to its financial performance. Chief Financial Officer John David Rainey said in August that advertising, alongside membership and marketplace operations, accounted for 45% of the company’s quarterly operating income growth. Walmart does not separately disclose revenue from its Walmart Connect advertising business in its earnings releases.
Industry experts expect retailers to adapt their advertising strategies as AI agents become more widely used. Some anticipate that Amazon and Walmart could offer major advertisers multiyear agreements to secure revenue, while competition from AI-driven shopping tools could put pressure on digital advertising prices.
Morningstar analyst Brett Husslein described the development as “an evolution rather than an existential threat” to retail media. Emarketer forecasts that brands will spend 22.6% more on retail media in 2026 than the $60.7 billion recorded last year.
Both Amazon and Walmart have also begun incorporating advertising into their own AI shopping tools. Walmart is testing ads within its Sparky chatbot, while Amazon has introduced advertising into its Alexa for Shopping assistant.
The shift could also change how brands market their products. Rather than relying primarily on visual presentation and emotional appeal, companies may increasingly focus on providing detailed product information that AI agents can easily process and match to consumer requests.
Major brands, including Procter & Gamble, Nestle and L’Oreal, are already working to make product information more accessible to AI systems.
However, industry consultants say brands should prepare for the changes without immediately abandoning existing advertising strategies.
“We are not recommending that clients fundamentally shift their retail media budgets overnight,” said Amie Owen, chief client officer at digital commerce consultancy Flywheel. “But we are advising them to prepare for how discovery and purchase decisions may evolve.”
Katherine Black, a senior consultant at Kearney, suggested that retail advertising could eventually develop into a bidding system in which AI agents search for products within consumers’ budgets while retailers establish minimum and maximum price levels.
