How Amazon and Walmart Are Using Generative AI to Challenge Google

Amazon and Walmart versus Google

Google dominates search, but when it comes to product searches, Amazon has a commanding lead. Amazon’s popularity with product searches is a competitive advantage for the company. When people search for products, they’re searching with intent to buy. This makes Amazon more appealing to retailers to sell their products on Amazon and to advertise on Amazon. As a result, Amazon is challenging Google’s leadership of the online advertising market. Meanwhile, Walmart’s own online ad operation, Walmart Connect, is a fast-growing business.

Both Amazon’s and Walmart’s ad businesses are flourishing because both companies can tap into the first-party data they collect from the shoppers who visit their websites, mobile apps, and physical stores (including Walmart’s vast network and the stores that Amazon owns, such as Whole Foods). With that data, they can place highly targeted ads for businesses that want their products to appear through paid placements when people search on Amazon and Walmart.

So, it behooves those companies to improve the search experience on their sites, and that’s exactly what they are doing.

Walmart and Amazon Level up with Generative AI

Walmart’s AI-powered tool, developed in collaboration with Microsoft, is designed to understand and respond to broadly defined, non-branded searches. For instance, a shopper could search for items for a “football watch party” or a “unicorn-themed party for my daughter,” and the AI would provide a curated list of relevant products, including chips, wings, balloons, and more, without the need to search for each item individually. This feature, initially available to iOS users, will soon extend to Walmart’s website and Android app users.

In addition, Walmart introduced the “Walmart InHome Replenishment” tool. This system uses AI to automate the process of re-ordering frequently purchased items, which Walmart believes will make shopping more convenient. This service, part of the InHome delivery program, fills online shopping carts with regularly ordered items and delivers them directly into customers’ homes.

Walmart’s splashy roll-out at CES followed Amazon’s similar move in 2023. While it hasn’t yet used AI for automated replenishment like Walmart is going to do, in 2023 Amazon launched a generative AI chatbot to improve product discovery on its site. This includes summarizing product reviews, highlighting key attributes, and aiding in finding clothes that fit well. These AI-driven features are designed to connect customers more efficiently with the products they seek, but mixed results to date show that it is a work in progress. In addition, just as this blog post was being published, Amazon announced that its mobile app contains a feature that answers shoppers’ questions about specific products (not just product categories).

Recently, there have been concerns about Amazon’s search functionality, particularly regarding the overwhelming presence of sponsored listings, which has made it challenging for users to efficiently find and distinguish between advertised and organic product listings. The introduction of a chat feature aims to address this issue by streamlining the search process, enabling users to more directly find products that meet their specific needs. This feature also aims to reduce the need for users to navigate through each product page individually to gather details and read reviews. 

What Is Google Doing?

Google has been busy upgrading its own product search capabilities. As we blogged on our site, in 2022 the company: 

• Introduced a slew of features such as product feeds for a shoppable experience on YouTube and more visually appealing ad formats in Google Search. 
• Launched 3D shopping and more intuitive product search. 

Those improvements, though important, happened before generative AI changed everything. But Google has been incorporating generative AI in search, too, notably through the launch of Search Generative Experience, which uses generative AI to provide improved search results in a conversational fashion. Google says that for product searches, generative AI creates a snapshot of noteworthy factors to consider and a range of product options. Search Generative Experience also provides product descriptions that include relevant, up-to-date reviews, ratings, prices, and product images. How? By tapping into Google’s Shopping Graph, a dataset of constantly changing products, sellers, brands, reviews, and inventory.

What Brands Should Do

Optimize for AI

As these platforms increasingly use AI for product discovery, it’s important to optimize product listings for AI algorithms. This means using clear, descriptive titles, detailed product descriptions, and high-quality images. Keywords are still important, but the focus should shift to natural language and contextually relevant phrases that customers might use in conversational searches.

Take a Critical Eye

As we have noted, Google’s own Search Generative Experience is imperfect. Walmart’s generative AI search tool and Amazon’s AI features depend heavily on the quality and breadth of data they can access. The accuracy and usefulness of AI-generated results are directly tied to the data fed into these systems. As such, there might be initial limitations in accurately understanding and responding to more complex or niche queries. Furthermore, the success of these AI tools in creating a seamless shopping experience hinges on their ability to evolve and adapt to the diverse and changing needs of consumers.

Adapt to Visual Searches

As AI capabilities evolve, visual search is becoming more prominent. Ensure your products have high-quality, clear images. Consider using multiple images that showcase the product from different angles and in various use cases.

Put Data to Work

Deploy the data and analytics tools provided by these platforms to understand customer behavior and preferences. This information can guide you in tailoring your product listings and ads to better match what customers are searching for.

Focus on Customer Reviews and Q&A

With AI integrating user-generated content like reviews in search results, it encourages customers to leave reviews and actively engage with them. Answering questions in the Q&A section of your product page (assuming you have one) can also provide valuable context for AI-driven searches.

Stay Informed and Agile

The AI landscape is rapidly evolving. Stay updated on the latest developments and be ready to adapt your strategies accordingly (tip: follow our blog!). This might involve investing in new technologies or adjusting your marketing tactics.

Improve Personalization

AI enables a more personalized shopping experience. Tailor your product recommendations and ads to individual customers based on their browsing and purchase history.

Use AI for Your Own Insights

Use AI to gain insights into market trends, consumer behavior, and competitive analysis. This can help in making data-driven decisions for your product listings and advertising strategies. (For more on that, read this super helpful blog post from my colleague Paul Headley.)

Contact IDX

The IDX commerce team knows how to drive growth for any business. Explore our website to learn more.