Meet Sparky—the AI Chatbot Walmart Says Is a Whiz at Sales

Key Takeaways

• Shoppers who use Sparky, Walmart’s AI chatbot, spend an average of 35% more than others, Walmart executives said Thursday.
• The retailer plans to further develop Sparky, while also collaborating with AI bots from tech specialists, such as Gemini and ChatGPT.

Sparky is cranking up sales at a massive retailer.

Walmart’s AI chatbot—named for the company’s yellow logo—is bolstering its shoppers’ spending, company executives said Thursday. About half of Walmart (WMT) app users have tried the 20-month old tool, CFO John David Rainey said on a conference call on the company’s fourth-quarter results, and those who engage with Sparky place, on average, a 35% larger order.

“Simply put, Sparky is helping customers find the things they need,” Rainey said, according to a transcript made available by AlphaSense. “It’s strengthening our digital unit economics as it scales.”

Why This News Matters to Investors

Tech companies are eager to show investors that they will be able to capitalize on AI. If their technology is used in online sales, tech companies may be able to charge a commission, incorporate ads or find other ways to make money.

Walmart plans to expand Sparky’s abilities and introduce the tool abroad. But it’s also collaborating with Alphabet’s Google (GOOG) and OpenAI to ensure Walmart products are easily available to those using their AI chatbots—Gemini and ChatGPT, which pull from multiple sites and platforms. The company, which has lately acquired a market value of $1 trillion, has sought to establish itself in investors’ minds as a tech powerhouse as well as a retail giant, recently moving to the Nasdaq 100 index viewed as a technology stock benchmark.

“We’re approaching AI development through partnerships,” Rainey said. “This lets tech companies do what they do best—develop innovative technology—and it provides us clarity to do what we do best—to translate the best of tech to retail experiences.”

Other new technology, including the automation of distribution and e-commerce facilities, should boost productivity, Rainey said. That’s built into Walmart’s forecast of a 3.5% to 4.5% year-over-year increase in sales for the year ahead, Rainey said. The outlook takes into account a "somewhat unstable” backdrop, given concerns about limiting hiring, student loan delinquencies and downbeat consumer sentiment, he said.

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Consumers may benefit from larger tax refunds, CEO John Furner said. But so far, they remain “choiceful,” with many looking to save, but being willing to pay for the convenience of delivery, Furner said. Households with an annual income of $50,000 or less are showing “some stress,” Furner said.

“We continue to see that wallets are stretched and, in some cases, people are managing spending paycheck to paycheck,” Furner said, according to the transcript.

Walmart U.S. reported a 4.6% year-over-year boost in comparable sales, excluding gasoline, in the fourth-quarter, while Sam’s Club U.S. reported a 4% increase, according to a press release. The company narrowly beat headline expectations, with $190.7 billion in sales and $0.74 in adjusted earnings per share.

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