AI chatbots could redefine shopping. This retailer is well-positioned to benefit, Cowen says

Artificial intelligence could redefine how consumers discover products and make purchasing decisions in the future. As consumers grow more comfortable shopping through AI chatbots like ChatGPT, companies that optimize their offerings to work with generative AI—just like how they did with search engines—are best positioned to capture the flow, wrote TD Cowen analyst Oliver Chen in a Friday note.

“Chat is the new checkout," wrote the analyst.

Over the 12 months ended on Sept. 25, Amazon and Walmart combined captured 88% of the incoming traffic from ChatGPT, according to Chen. In that window, Etsy received the largest percent of its traffic from AI chatbots compared to retailers Walmart, Costco, Ulta, and Target.

But the race is wide open. Across the board, AI chatbots only make up less than 1% of total web traffic to major retailers—leaving enormous untapped potential.

For years, AI in retail has been mostly predictive, helping forecast demand based on consumer demographics or shopping behavior. The new generation of so-called “agentic AI" would be more prescriptive and could automatically turn those insights into actions such as adjusting prices, reordering products, or tailoring marketing messages, said Chen.

Walmart is a leader of this transformation, said Chen. Its “Sparky" chatbot—a generative AI-powered shopping assistant—helps customers find products, compare options, and even plan for specific events. Supported by the large Walmart+ membership base of roughly 30 million, Sparky can make personalized suggestions and even handle post-purchase tasks like returns.

“If you’re visiting Northwest Arkansas and you want to know where a great place to fish is and what equipment you could get delivered to your home from Walmart to then go on that fishing trip, Sparky can help you with that," said David Guggina, Walmart’s chief e-commerce officer in the U.S., at the company’s latest earnings call.

Walmart also uses AI to manage inventory, forecast demand, and improve fulfillment speed. Some of its newer fulfillment centers are reportedly twice as productive thanks to AI-driven automation. The retailer has been integrating different AI across departments and allows natural language control—which turns complex data into conversational tools for human workers, according to Chen.

The battle is about who owns the data. By keeping ownership of first-party consumer data, Walmart can link its AI ecosystem with its advertising business and loyalty programs to create a unified feedback loop. The data-centric strategy could position Walmart ahead of many competitors, according to Chen.

AI could prove a strong catalyst over the long term for Walmart stock, which rose 0.1% on Friday. Shares have gained 13% in 2025 and 27% over the past 12 months.

Write to Evie Liu at evie.liu@barrons.com