Omni Talk Retail – Walmart's Brilliant Move: Bringing Ads to AI Shopping

Episode Date: December 4, 2025
Hosts: Chris Walton and Anne Mezzenga
Topic: Walmart’s new ad strategy on its AI shopping agent, Sparky, and broader implications for retail and AI-powered commerce.

Episode Overview

This episode dives into Walmart's latest test: integrating ads, specifically "sponsored prompts," into conversations with Sparky, its generative AI shopping assistant added to the Walmart app in June 2025. The hosts explore why this move is innovative, how it positions Walmart in the evolving retail media landscape, and what it says about the future of AI in commerce.

Key Discussion Points and Insights

1. Walmart’s “Sponsored Prompt” Ads on Sparky

• What’s happening: Walmart is experimenting with a new ad format in Sparky called "sponsored prompt," allowing brand engagement and personalized product recommendations directly during AI chats. Clicking a prompt generates an AI-powered answer and a “click to buy” ad beneath.
  • (00:00)

2. The Case for Retailers Owning Their AI Shopping Experience

• Chris Walton: Extremely supportive of Walmart’s move. He argues retailers benefit most by building their own AI-powered search and commerce platforms, rather than relying on external tools like ChatGPT or Google.
  • “I don't think I could be more pro on anything actually...this is exactly where retailers should be focusing their efforts, creating a great generative AI search experience on their own sites because we know generative AI searches convert higher already.” — Chris Walton (00:54)
• Emphasizes incremental value:
  • Improved site conversion.
  • Additional high-margin ad revenue.
  • More control over traffic without relying on third-party chat platforms.
  • Walmart’s ad business is already growing almost 100% per year. (00:54)
• Key strategic insight: Retailers need to monitor how much traffic comes from outside AI platforms vs. their own tools to inform further partnerships.

3. Consumer Adoption and the Burn Rate of Agentic AI Platforms

• Anne Mezzenga: Sees Walmart’s move as logical since users are getting accustomed to conversational commerce. She notes that to offer these tools free to consumers, someone must underwrite the cost—enter retail media.
  • “Just based on the burn rate of all of the agentic platforms right now, like we're going to have to see somebody support the tools that we're being offered for free right now as consumers.” — Anne Mezzenga (02:14)
• Stresses the importance of discovery: Retailers must focus on making products easily discoverable and offering deals at key decision moments within the AI chat.

4. Comparing AI Shopping Experiences: Walmart vs. Amazon

• Anne references Amazon’s Rufus Chatbot:
  • “Consumers using the Rufus Chatbot on Amazon are converting 60% more. And that's a great indication of what the possibility is for other retailers when you can capture them with the right deal at the right place at the right time… it feels additive. It doesn’t feel intrusive.” — Anne Mezzenga (03:22)

5. Challenging the Role of General AI Platforms (ChatGPT, Google) in Commerce

• Chris’s critical question: If Amazon and Walmart successfully integrate agentic AI for commerce, do retailers still need to depend on platforms like ChatGPT or Google?
  • “Why do we even need ChatGPT and Google for commerce? ...if I'm the retailers, I have more power here than I think we're realizing.” — Chris Walton (03:56)

6. The Broader Utility of Everyday AI Conversational Platforms

• Anne’s perspective: The line between commerce and general use isn’t rigid; people are integrating AI chat into their everyday lives, asking everything from product advice to parenting tips, which makes the AI touchpoint different from traditional retail search.
  • “I think we're dealing with something that's not just relevant to us when we're looking to, you know, do the seek and destroy, I need this thing mission. It's...what you should feed your kid and then where the best gifts are.” — Anne Mezzenga (04:32)

7. Reflections on Shifting Power Dynamics in Retail

• Chris (History lesson): Even as new platforms emerge, retailers historically have found ways to carve out power. He reiterates that retailers may have more leverage now than typically acknowledged.
  • “It was Google, Google was the search place for that and Amazon carved out a bit of it… I just think the retailers have more power here than… we’re probably leading to believe.” — Chris Walton (05:23)

Notable Quotes & Memorable Moments

• “If anyone out there at the retailers can disprove that [that traffic through generative AI platforms is small], wants to send me a private message, please let me know. But my hunch is it’s probably not very big.” — Chris Walton (00:54)
• “How are you making your products as discoverable, as pro as possible, and then how are you in the moment in a way that we’ve really never been able to do as retailers and brands before?” — Anne Mezzenga (02:14)
• “It feels additive. It doesn’t feel intrusive like, like some of the other ads that I think we’ve been served up in previous years through traditional retail media. So I love it.” — Anne Mezzenga (03:22)

Timestamps for Key Segments

• 00:00 – Introduction to Walmart’s “sponsored prompt” ads in Sparky.
• 00:54 – Chris’s strong endorsement of Walmart’s strategy.
• 02:14 – Anne on the need for retail media to support free consumer AI.
• 03:22 – Statistics on Amazon’s Rufus Chatbot boosting conversions.
• 03:56 – Chris questions the future role of ChatGPT and Google in commerce.
• 04:32 – Anne discusses AI as part of everyday, not just retail, experience.
• 05:23 – Chris’s historical perspective and power dynamics for retailers.

Summary

The hosts emphatically support Walmart’s innovative approach to retail media by placing ads directly within its AI shopping assistant, Sparky, seeing it as a win for conversion, user experience, and retailer control. They debate whether this shift means general AI platforms like ChatGPT and Google will become less central in commerce and stress the importance of making shopping as seamless and relevant as possible within retailers’ own ecosystems. With examples from Amazon and larger industry data, they demonstrate that integrating personalized, context-specific ads in AI agents is likely the future for all major retailers.