U.S. retail chain Walmart (WMT) has OpenAI to thank for chatty new customers popping up on its websites.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
That’s because ChatGPT, the AI conversational chatbot developed by OpenAI, is now the source of one in five of Walmart’s referral clicks.
AI Referrals
According to data from Similarweb (SMWB), a web traffic analytics company, 20% of referrals came from the chatbot in August, up 15% from July.
Other retailers are also seeing a lift with ChatGPT driving over 20% of referral traffic to Etsy (ETSY), nearly 15% to Target (TGT) and 10% to eBay (EBAY).
The numbers are still small, with referral clicks accounting for less than 5% of total site visits at Walmart. The dominant sources are still direct traffic, paid channels and search engines.
However, the increase in the use of ChatGPT could be a sign of the future and a signal of how much AI is impacting how customers shop online.
A study earlier this month from OpenAI’s Economic Research team and Harvard economist David Deming found that around 2% of all ChatGPT queries involve shopping — about 50 million queries per day.
Researchers noted that users are often asking for recommendations like “recommend a good laptop under $1,000” or “How much are Nikes,” suggesting AI tools are challenging the role once reserved for Google (GOOGL).
New Era
According to the website Modern Retail, unlike its peers, Amazon (AMZN) has blocked many AI crawlers from scraping its site. That means ChatGPT can’t provide real-time Amazon product links, nudging consumers toward rival retailers instead. In August, referral traffic from ChatGPT to Amazon fell nearly 18% to less than 3% month-over-month.
Walmart is making its own strides in conversational retail AI with the launch earlier this year of a new GenAI-powered shopping assistant called Sparky.
According to Walmart, customers can access Sparky via a smiling ‘Ask Sparky’ button in the Walmart app. The new system helps customers search for items, synthesize reviews and helps them to “prepare for any occasion.”
This could include finding the right top to wear for a particular celebration or the perfect toy for a nephew’s birthday.
It is all helping boost Walmart’s online and e-commerce demand – see above – in a range of categories.
Is WMT a Good Stock to Buy Now?
On TipRanks, WMT has a Strong Buy consensus based on 30 Buy ratings. Its highest price target is $129. WMT stock’s consensus price target is $114.86, implying an 11.86% upside.
