Walmart is using ARTIFICIAL Intelligence in the form of a bot to negotiate and communicate with its vendors.
Walmart implemented AI chatbots in partnership with Pactum AI Inc. to make communication easier and save money.
Pactum AI Inc., a Californian software company, helps companies automate negotiations with vendors. Walmart will be its first client in 2021.
ChatGPT is a popular AI service.
Walmart gives the AI software the budgets and needs of the business. The AI then contacts vendors to negotiate a deal.
“We set the requirements and then, at the end, it tells us the outcome,” Darren Carithers, Walmart’s senior vice president for international operations told Bloomberg.
Pactum’s software can handle an array of negotiating services including discounts, payment terms, and prices for individual products.
The service is currently only being used with Walmart for purchasing store equipment such as shopping carts but not for products just yet.
This is replacing a human team on Walmart’s side instead of buying a team to do the negotiating.
Walmart’s suppliers reported that three of the four vendors prefer to negotiate with an AI bot over a human team.
AI-based solutions have reduced the closing time of these deals from months to a few days.
Bloomberg reports that Walmart has said AI is responsible for closing 68% of the deals with suppliers.
Walmart also saved an average of 3 % on its contracts from 2021.
“There’s so much data, so much back and forth, and so many variables that can be tweaked,” Pactum CEO Martin Rand told Bloomberg.
“The AI bot with a human on the other side will find a better combination than two people can over email or on the phone.”
Walmart insists the use of AI chatbots is to achieve extra savings on contracts and is not a threat to human negotiators – at least for now.
“Some really like it and are like, ‘This is the best way to do it,’” Carithers added.
“But I would relate that to people using self-checkout in stores. Some customers love it but guess what: Some customers want to go to a manned checkout and see a person.”
Walmart was contacted for comments by the U.S. Sun regarding their use of AI chatbots.