We’re joined this week by Terry Clear, director of Replenishment and Sales Insights at 8th & Walton, and we’re discussing how Walmart is seeing a lot of traffic through ChatGPT, unlike Amazon. In addition, we’ve learned that Target has partnered with OpenAI, indicating a broad embrace of AI across the retail industry.
Lainie: A big chunk of Walmart’s online traffic is now coming from ChatGPT.Why do you think Walmart is winning in that space?
Terry: Walmart has seen this as another channel, or method, for shoppers to purchase products, and has partnered with OpenAI ChatGPT to enable this functionality. Amazon is a little bit more focused on maintaining its ecosystem, and ChatGPT is outside of its ecosystem. Now we’ve seen the announcement where Target has also engaged ChatGPT. So this is yet another way for a shopper to make a purchase from a retailer without going to the retailer’s site. I could be asking ChatGPT questions, and it could make recommendations. Then I purchase directly from the response from ChatGPT.
Lainie: Yeah. It’s a deeper experience. It’s not just about plugging in keywords; you’re also sharing needs, wants, and pain points, and you’re getting a more customized recommendation.
Terry: Correct. And it’s interesting that Walmart and Target have slightly different approaches to how they’ll use ChatGPT, and this is all brand-new stuff. Both of these approaches are likely to evolve over the next few months, and nobody’s ever going to get this right the first time. Nobody’s website looked good in 1999. So this will all evolve and change over time.
At least for right now, it looks like the Walmart integration with ChatGPT is more tactical. It looks to be more focused on a single purchase, whereas the Target interaction appears to be more about relationship building and making a basket purchase rather than an individual purchase. There are a lot of different things going on. Both companies are just trying it out, and I applaud them for doing this. This is new technology; it’s going to impact all of our lives. We might as well see how to make it work for us.
Lainie: Absolutely. Now, as more shoppers begin a product search, it used to be that if you wanted a product, you might go on Google or Amazon—but now they’re starting in ChatGPT. How can Walmart suppliers leverage this new way of seeking out products?
Terry: We have talked about this in previous sessions a little bit, and that is to make sure your product listings are more likely to be found from the type of search that a user is initiating through ChatGPT. So think about how a user would search for a product on a Google search. They typically put in terms and just hope for the best, whereas this is more of a conversational type search that says, “Give me ideas for a 9‑year‑old’s birthday party.” It comes up with a list of things, and you then say, “That looks great. I’ll buy these five things from Walmart and have my birthday party for my 9‑year‑old.”
Okay, now: are your listings built in such a way that ChatGPT, when it’s searching, will say, “Oh, this is a good recommendation, and this is a good recommendation”? So a lot of suppliers will need to continually reevaluate their content on Walmart.com to make sure that they’re catching every possible sale.
Lainie: We talk about, in sales copy, features and benefits. Do you think that this is a time for suppliers to review the benefits aspect? Because people are often going to be asking questions about their need for something, which is where the benefits come in.
Terry: And also to think of product use cases. So instead of just saying, “I have a product, and this is its size and dimension and color,” think: “What does a shopper do with this product? Why would they want to buy this product?” That’s a little bit of the features and benefits. What is the need that the customer has that my product solves? And the need is not that it’s eight by four by seven and that it’s blue. That’s not the need.
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