In a move that may revolutionize the way companies negotiate with suppliers, Walmart is now using artificial intelligence to conduct vendor negotiations. According to a recent report by Bloomberg, the Bentonville, Arkansas-based retail giant has partnered with California-based AI technology company Pactum to develop a chatbot that communicates with human vendors to hammer out mutually beneficial deals.
The process is simple but effective. Walmart communicates its budget and priorities to the software, and the chatbot negotiates with human vendors to finalize deals. According to Bloomberg, three out of four suppliers prefer dealing with the chatbot to a human negotiator.
Walmart’s head of International Operations, Darren Carithers, saw similarities between the experience of using the chatbot and self-checkout machines in stores; some people love them, while others prefer a human interaction. But there’s no denying that AI has significantly streamlined the negotiation process, helping Walmart close deals in days instead of weeks or months.
Pactum’s chatbot can negotiate discounts, prices, and payment terms for individual products. The AI can also compare current vendor deals to historical ones and what other companies are paying, helping Walmart make informed decisions.
This isn’t the first time Walmart has embraced AI technology. In 2022, the company rolled out a text-to-shop tool that allows customers to text the retailer the names of products they want to purchase. The shopping app also features a chatbot that provides information to shoppers online and through the app. However, Walmart has also shown some concerns regarding AI chatbot technology and has warned employees not to share any confidential information about the company with chatbots.
While AI is still in its nascent stages, Walmart’s usage of the technology is an exciting development. It remains to be seen how other companies will adopt this technology, but the potential benefits for speed, efficiency, and cost savings are substantial. As such, the use of AI chatbots for supplier negotiations might become commonplace in the near future.