Walmart Reportedly Finds 75% of Vendors Prefer Negotiating With Chatbot

Add procurement manager to the list of jobs being aided by artificial intelligence (AI) tools.

Walmart is using a chatbot developed by Pactum to negotiate cost and purchase terms with some of its vendors, Bloomberg reported Wednesday (April 26).

The retailer uses the AI-powered tool to negotiate only for smaller contracts and only with suppliers that provide equipment it uses, rather than goods it sells, according to the report.

Walmart has found that the chatbot closes deals in days rather than weeks and that nearly three out of four suppliers prefer negotiating with the chatbot, the report said.

Pactum reported in a Jan. 11 press release that its technology enables Walmart to negotiate with 2,000 suppliers at once.

The company also said that Walmart’s experience has been that 83% of suppliers find the chatbot easy to use, that the chatbot closes deals with 68% of the suppliers with which it’s used and that it generates an average savings of 3% for the retailer, according to the release.

Walmart has found that the chatbot frees up procurement teams to focus on larger contracts, according to the Bloomberg report.

The retailer provides its budget and needs to the AI tool, and the AI then negotiates with vendors’ human representatives about discounts, payment terms, prices and other issues, the report said.

During the back-and-forth with vendors, the AI can calculate the price it should pay by taking into account historical trends, estimates of what competitors are paying and the cost of materials used to produce the item, per the report.

Automation could affect two-thirds of the jobs in the United States, according to a report by Goldman Sachs.

The report found that 7% of U.S. workers are in roles where AI could automate at least half of their jobs, and thus replace them, and another 63% are in positions where less than half of their tasks could be automated, so they could probably keep their jobs while having time freed up so they could do other tasks.

The remaining 30% of U.S. workers have physical or outdoor jobs unlikely to be touched by AI, according to the report.

In the case of procurement, another benefit of automation technology is that it can integrate with enterprise resource planning (ERP) systems to apply and enforce the new agreements, Pactum CEO Martin Rand told PYMNTS in an interview posted in April 2020.

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