Negotiating a Vendor Deal With Walmart? You May Be Talking to AI
Walmart is supplementing its buying team with a chatbot.
The retail giant has teamed up with California-based Pactum AI Inc. to automate vendor negotiations. As Bloomberg reports(Opens in a new window), Walmart inputs its budgets and needs, and leaves the AI to bargain with human sellers and close deals.
"We set the requirements and then, at the end, it tells us the outcome," Darren Carithers, Walmart's senior VP for international operations, tells Bloomberg.
The AI software—so far used only for equipment like shopping carts, not in-store goods—has cut negotiating time from weeks or months to days. According to a Pactum blog post(Opens in a new window), the chatbot improved terms of 68% of Walmart's business deals, generating an average savings of 3%.
"In addition to cost savings, an AI-based approach to negotiations, when used properly, can improve supplier relationships," the company says, pointing to opportunities for a broader set of suppliers, as well as negotiations that move at vendors' own pace. Plus, "AI chatbots can give companies a competitive advantage and help them be recession ready."
With more than 100,000 total suppliers, Walmart is not yet replacing its human negotiators; rather, it's looking for more ways to squeeze out savings from smaller contracts—haggling over discounts, payment terms, and individual product prices.
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