Earnings reports show how retailers seek to evolve their AI – eMarketer

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Recent earnings reports from the nation’s largest retailers gave a peek behind the curtain for how they aim to improve AI offerings, and where they value it most in their business.
In earnings calls from Walmart, Amazon, and Target, retailers expressed interest in improving the shopping experience with AI agents by unifying data under assistants to add broader context for consumers. Retailers and ecommerce merchants are also fueling AI with data for less customer-facing processes like inventory and employee support, all sharing the ultimate goal of improving customer experience.
Here are some notable takeaways from recent retailer earnings reports.
In its Q1 earnings report, Walmart officials said they are drawing on in-store data to improve the company’s AI assistant Sparky. More AI-powered data leads to better shopping experiences and faster delivery, according to the company.
“Being able to serve customers in real-time requires you to be close, local, to understand assortments, and the investments we’ve made in data powered by AI, so that we can make faster decisions and fulfill in the very best way possible, on top of the supply chain investments that we’ve made over the last few years is all coming together,” said John R. Furner, president, CEO, and director at Walmart Inc., on the company’s call.
“Our investments in AI have increased Sparky intelligence and response quality by 40% this year,” said Furner.
Company leaders said data from in-store interactions with associates, digital searches, and AI conversations can help shoppers find what they want more easily, even through Walmart’s growing roster of third-party ecommerce sellers.
“Customers and members are also shopping deeper into our catalog, as third-party marketplace sales growth in the US reached the highest level in two and a half years,” said John David Rainey, Walmart Inc.’s executive vice president and chief financial officer.
In its Q1 earnings call, Amazon leaders said its customers and sellers are both becoming more educated by the data used by Amazon’s AI systems as the ecommerce giant continues to evolve them.
New and enhanced features to the experience include expanded price history tracking for a full year, advanced cart-building and reordering capabilities, and agentic purchasing on other retailers’ sites via the “Buy for Me” option.
AI is also bringing more data to sellers’ fingertips on Amazon. On their April earnings call, the company announced the launch of a new AI experience in Seller Central, offering custom, personalized data visualization to help sellers meet goals.
Officials said the insights provided in AI conversations are relevant enough that in some cases they boost brand discovery. Just before retiring Rufus, Amazon said that nearly 20% of shoppers who encountered brand prompts in Rufus continued the conversation about that brand.
Target, in its Q1 earnings call and recent announcements, plans to enhance the shopping experience for consumers beyond AI assistants. It’s also supporting inventory, making popular items available to shoppers when they purchase them.
“One thing we’re excited about is that the fastest improvement that we saw were in our most important items, the top items that our guests are shopping most frequently with Target…categories like food, essentials and beauty,” said Lisa Roath, Target Corp’s executive vice president and chief operating officer, on the company’s May earnings call.
While top sellers are fueling Target’s turnaround, improving inventory reliability remains a focus.
“You’re not going to hear a hint of real satisfaction from us until we continue that progress in the quarters and years to come, but we’re encouraged by the progress that we’ve made,” said Target Corp CEO and director Michael Fiddelke, on the earnings call.
In 2024, Target launched a generative AI chatbot, Store Companion, to support store employees, coach new team members, and improve in-store customer experience.
“We’re working to use AI to improve our demand forecasting, which helps reduce some of the volatility that can lead to some of those in-stock issues,” Roath said. “The investments we’re making to improve data and network visibility will help us to drive greater consistency and flow throughout our network.”
 
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