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Dive Brief: - Walmart U.S. President and CEO David Guggina says that advances in ambient AI automation and customer-facing applications like AI assistant Sparky are leading to marked gains in store execution, delivery speeds, average order value and conversion. - Guggina, who was appointed to his current role in February, touted the benefits not just of Walmart-built AI applications but also those of third parties such as OpenAI and Google, speaking at the Goldman Sachs Global Consumer and Retail Conference last month. - With Sparky seeing a dramatic increase in customer usage and driving 40% higher AOVs, Guggina hinted at opportunities to potentially integrate the homegrown AI assistant into other parts of the Walmart business, such as its Vizio and Onn electronics unit, for example, “helping you shop and navigate different applications on the TV.” Dive Insight: AI is rapidly transforming nearly every aspect of Walmart’s operations and customer experience, according to Guggina. “We have been leaning into AI for quite some time — we've had physical AI in our supply chain for over seven years — and you can see it reshaping our company, reshaping our customer value proposition,” Guggina said in a conversation with Goldman Sachs’ Katharine McShane. This reshaping, and the benefits of it, are most evident in the company’s e-commerce performance. Sales grew 24% year over year in Q2, marking the 10th-consecutive quarter of more than 20% growth, Guggina said. He attributed a large part of these gains to AI-driven efficiencies that have led to faster delivery speeds and cost savings, which were then reinvested into competitive pricing and customer experience. The result has been a deepening of the retailer’s appeal with today’s “resilient,” but “intentional” consumer, Guggina said. Sparky, which Guggina describes as “becoming more and more capable,” is a central piece of the retailer’s experience improvements. Weekly engagement with Sparky has grown 60% quarter over quarter, Guggina said, and Sparky’s new visual search capabilities have led to a 57% spike in conversion when compared to text-based searches. Outside its own AI ecosystem, Guggina also is “really happy” with the company’s partnerships with external AI agents like OpenAI’s ChatGPT and Google’s Gemini. “They are most often choosing to deep link out to us, meaning they send customers our way when they see applicable context, and when they do that, we're seeing fantastic conversion rates,” he said. Walmart’s approach to third-party AI shopping agents is in direct juxtaposition to that of Amazon, which last month moved to block Meta’s new AI assistant Muse from browsing and making purchases on its site, following similar actions against AI agents from Perplexity, OpenAI, Anthropic and Microsoft. For Walmart, allowing AI agents access to its site on the open web has been a net positive. Many customers coming through ChatGPT and Gemini are new or returning and have a “very high” organic repeat rate, Guggina said.
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