Walmart is relying on AI to help it negotiate prices with vendors, revealing some surprising insights.
AI is the new darling of the tech industry, with OpenAI, Microsoft, and Google leading the way. Walmart may not be the first company that springs to mind in the context of AI, but Bloomberg is reporting that the retailer is using it for vendor negotiations. The company has tapped Pactum AI, using its chatbot for the process.
“We set the requirements and then, at the end, it tells us the outcome,” says Darren Carithers, Walmart’s senior vice president for international operations.
Carithers went on to tell Bloomberg that the AI has reduced negotiation times from weeks or months to mere days. What’s more, the bot has saved an average of 3% on contracts, with a 68% success rate in reaching deals.
Perhaps most surprisingly, three-quarters of the company’s suppliers prefer negotiating with the AI.
“Some really like it and are like, ‘This is the best way to do it,’” Carithers continued. “But I would relate that to people using self-checkout in stores. Some customers love it, but guess what: Some customers want to go to a manned checkout and see a person.”
The AI is currently only being used to negotiate contracts for equipment the company uses, such as shopping carts, and not goods being sold on shelves. Given the success Walmart is experiencing, however, it’s likely only a matter of time before AI negotiators are tasked with more responsibility.
