Walmart and Target Are Battling to Show Up in AI Shopping Tools. Here’s How Their Strategies Compare

Editor’s note: This story was updated after publication to include news from Walmart.

Two of America’s biggest retailers and longtime rivals—Walmart and Target—are betting big on how AI influences what people buy. But their strategies are significantly different, and give a glimpse into the state of AI commerce.

Retailers are jockeying for prime placement within AI shopping tools that consumers use to research and buy products. Retailers are building their AI efforts in two ways: by tracking brand visibility and opening up shopping capabilities within AI answer engines like OpenAI’s ChatGPT, Google’s Gemini, and Anthropic’s Claude; and by developing their own LLM-powered tools and chatbots for shoppers and employees.

Walmart and Target were once key rivals, but the retailers have diverged as Walmart has become a bigger tech company, a move evident in its switch last year from listing on the New York Stock Exchange to tech-heavy Nasdaq.

Still, Walmart and Target battle for similar consumers and sales with big-box stores. 

Top executives from Walmart and Target recently laid out the retailers’ AI plans. While Walmart is developing its own AI tools for customers and employees, Target is betting on integrating with AI answer engines ChatGPT and Gemini.

ADWEEK asked a handful of retail experts to weigh in on the retailers’ strategies.

“The question for advertisers isn’t just who has AI, but who can turn shopper data into automated optimization the fastest,” said Kashif Zafar, CEO of retail adtech firm Xnurta.

“Right now Walmart is in a strong position because they’re building AI directly into their retail media stack and tying it to their scale in grocery and last-mile fulfillment—that gives them enormous volumes of transaction data to train against and optimize campaigns in Walmart Connect,” he said. “Target has strong first-party data and great engagement in discovery categories like beauty and apparel, but their strategy has historically leaned more on partners.”

Target’s digital transformation

Target is in the midst of a turnaround under new CEO Michael Fiddelke. After years of missed revenue, an investment in technology including AI is one of four priorities Fiddelke laid out earlier this month for growth. The goal of AI is to develop the retailer’s stylish and trend-based merchandise and improve the in-store experience.

Target will spend an incremental $2 billion in 2026 on guest experiences, including AI and brand marketing.

Internally, Target has developed tools to help employees manage store operations. Another tool, called Target Trend Brain, helps designers synthesize trend data to create products more quickly, Prat Vemana, Target’s chief information and product officer, told ADWEEK.

The consumer-facing AI strategy heavily leans on partnerships with OpenAI’s ChatGPT and Google’s Gemini. In November, Target signed a deal to make an assortment of products shoppable through ChatGPT. Target and OpenAI’s design teams also quickly developed and launched a ChatGPT-specific app powered by AI in one month, Vemana said. Target’s OpenAI deal also includes the ability for Roundel—the retailer’s ad arm—to sell ads as part of ChatGPT’s nascent advertising program.

“That is the speed that we are responding to them,” Vemana said. “You have to be at that pace and speed—otherwise it’s hard to innovate with them.”

The ChatGPT app is connected to Target accounts so that shoppers can buy additional products from Target, get personalized recommendations based on their shopping history, and choose either in-store pickup or having items shipped. Unlike Target’s mobile app, the ChatGPT version of the app shows more recommended products because of AI’s broader queries. For example, someone who searches for “things to bring on vacation” within Target’s ChatGPT app may first see snacks. After looking at the product page for the snacks, Target may recommend swimwear products or sunscreen.

“It takes you through the funnel very easily—you’re going from a chat world to a browse world,” Vemana said.

ChatGPT has recently changed its commerce strategy away from instant checkout to directing users to retailers’ apps, potentially benefiting Target’s ChatGPT-specific app.

“I would probably not write off anything yet—the reason I say that is they’re testing different ideas,” Vemana said. “We are switching from that search browse to a conversational paradigm.”

Separately, Target is also working with Google to make products shoppable through Google Search’s AI Mode and AI assistant Gemini.

Target’s Vemana said the retailer wants to be a first mover in AI commerce but that it’s unclear how retail transactions will take place within AI answer engines. AI-driven referral traffic is growing but primarily comes from consumers researching and discovering products. For example, people are asking AI answer engines for product recommendations for a trip or hosting a movie night, but they are not buying groceries—yet.

“Our early learnings are that people are still more in the upper funnel, in the inspiration space,” he said.

Walmart’s ecommerce push

Walmart’s AI strategy is an extension of the retailer’s ecommerce investment over the past few years that has helped it gain market share and become a bigger competitor to Amazon. 

The bulk of Walmart’s AI work is developed in-house around four “super agents.”

One super agent is the consumer-facing shopping assistant Sparky that helps shoppers find things within Walmart’s mobile app. Walmart is also testing ads within Sparky that direct to suppliers’ products sold on Walmart.

There is also a super agent called Marty that helps suppliers manage retail operations as well as advertising campaigns. Another super agent helps store associates track schedules and store data. And the final super agent is designed for developers to test and roll out technology.

Walmart CEO John Furner explained the internal AI push as a way to simplify Walmart’s operations and help shoppers during Walmart’s recent fourth-quarter earnings.

“The way we are using technology and AI is helping us create great customer solutions, reduce friction, simplify decision-making, and pinpoint where our inventory is—all while maintaining the trust we’ve earned from our customers and members,” Furner told investors. “And we aren’t just embracing the tools that are changing the way people shop—we are creating them.”

Walmart has partnerships with Google and OpenAI that enable consumers to purchase Walmart products from AI responses. Walmart began testing ChatGPT’s instant checkout feature in November and is now evolving its strategy. The next version of Walmart’s strategy will embed Sparky directly into ChatGPT. Embedding Sparky will allow shoppers to add multiple products to their shopping baskets, according to a Walmart spokesperson. Walmart will also embed Sparky directly into Gemini through the Google partnership.

Ecommerce analyst Juozas Kaziukėnas described Walmart’s AI investments as part of the retailer’s bigger race to catch up to Amazon in ecommerce.

“Given Walmart’s history of lagging in ecommerce for years to only eventually wake up to try to catch up in a market lost to Amazon, they are approaching AI differently,” he said. “As someone who is paying a lot of attention to the AI and commerce overlap, I’m only paying attention to Walmart—I don’t think other established retailers or even modern retailers like Instacart or DoorDash have made much progress.”