Amazon and Walmart aren’t just fighting for the e-commerce throne. They are also in the race for artificial intelligence (AI) to attract third-party sellers.
In their quest, both retail giants are leveraging AI, a highly talked-about technology, to not only improve the shopping experience for customers, but to improve the sales experience for sellers.
This week, Amazon Ads introduced a generative AI solution aimed at helping advertisers enhance their ad campaigns and create more engaging content.
As Amazon announced in a press release on Wednesday (October 25), the image generation tool, currently in beta, allows brands to create lifestyle images that increase the effectiveness of their ads.
As an example, consider an advertiser who has individual product images, such as a toaster, set on a plain white background. But when this same toaster is integrated into a lifestyle environment, such as sitting on a kitchen counter next to a croissant, click-through rates can increase by up to 40% compared to ads with traditional product images. Amazon said that it is.
With that in mind, this launch aims to help individuals who don’t have access to in-house resources or agency support. For big brands, it provides a more efficient process for producing creative content.
read more: Amazon launches AI-powered image generation tool for advertisers
Meanwhile, Walmart is reportedly exploring ways to make shopping more convenient. In a blog post published earlier this month, the retailer revealed that he is using AI and augmented reality (AR) technology to achieve this goal.
By directing AI to generate search results tailored to specific scenarios, Walmart is streamlining the customer experience. For example, someone planning a Halloween-themed party can easily find all the products they need with a single search for the theme.
Additionally, Walmart emphasizes that it leverages AI to help customers make complex purchasing decisions. Walmart aims to simplify the decision-making process by providing personalized recommendations that take into account individual needs and preferences. For example, customers looking for a phone that is compatible with their current wireless provider can benefit from AI-powered guidance.
Walmart is also researching voice technology to enrich the shopping experience. Through the Mobile His app, customers can shop at her Walmart.com and talk to digital assistants with voice commands. This hands-free shopping feature also allows customers to reserve pick-up and delivery time slots.
Walmart uses AR tools for clothing and home goods. Walmart’s goal is to combine the power of generative AI and AR to provide personalized design assistance to its customers. Shoppers can communicate their budget, theme preferences and design preferences to receive tailored recommendations tailored to their room dĂ©cor, helping them envision the space they want before they buy.
The ongoing competition between Amazon and Walmart for third-party sellers has revealed significant differences, according to a recent September report from PYMNTS. PYMNTS highlighted the disparity in the geographic scope of these markets. While Walmart focuses on the United States, Canada, and Mexico, Amazon operates a vast network of sellers across 22 countries. This extensive global coverage includes markets such as Australia, Germany, Japan, and the United Arab Emirates, giving Amazon a distinct advantage in terms of global market penetration.
According to PYMNTS Intelligence findings, in the second quarter of 2023, third-party sellers on Amazon were responsible for 6 out of 10 sales. This share has shown slow but steady growth in recent years, increasing by 7 percentage points compared to the first quarter of 2019.
As a result, third-party sales account for 73% of Amazon’s total online sales.
read more: Walmart hopes third-party marketplaces will steal holiday spending from Amazon
But as both retail giants realize the potential of incorporating AI into their platforms for third-party sellers and seek to appeal to them, which retailer will be their preferred choice? The question arises.