Walmart Suppliers Prefer AI-Driven Negotiations Over Human Interaction

Walmart is leveraging AI in a new way — not for storytelling, but to secure better deals. The retailer is utilizing a chatbot from Pactum AI to streamline negotiations with suppliers. This technology is delivering an average savings of three percent on contracts, and surprisingly, 75% of suppliers prefer negotiating with the AI over human representatives.

Pactum's system allows Walmart to input its budget and specific requirements, such as desired discounts and payment terms. The AI then analyzes supplier demands against market trends, commodity values, and competitor pricing. As a result, the AI can finalize deals within days, significantly faster than the traditional negotiation process.

Initially piloted in Canada, Walmart has expanded the use of Pactum’s technology to the US, Chile, and South Africa. Currently, the AI focuses on negotiating contracts for shopping carts and other store essentials rather than the products on shelves. It's important to note that while Pactum's AI assists in negotiations, it doesn't eliminate the human element; real-person interactions remain essential to the process.

This approach aims to ease the workload for busy procurement teams rather than replace them. However, the rise of AI in negotiations raises concerns for those worried about job security, especially as many companies are instituting layoffs amidst economic pressures. While Walmart is exploring AI solutions to mitigate the impact of job cuts and hiring freezes, the role of human employees remains vital, even as the company increasingly relies on technology for efficiency.