Wesfarmers and Microsoft Forge Strategic Alliance to Pioneer Agentic Commerce in Retail

In a significant development for the retail technology landscape, Australian conglomerate Wesfarmers has announced a multi-year strategic partnership with Microsoft. This collaboration marks a decisive shift towards "agentic commerce," aiming to embed advanced artificial intelligence across Wesfarmers' extensive portfolio, which includes household names such as Bunnings, Kmart Group, Blackwoods, and Priceline.

The partnership focuses on leveraging Microsoft’s full stack of AI capabilities—including the Microsoft Cloud, Azure OpenAI Service, Microsoft 365 Copilot, and Microsoft Copilot Studio—to drive digital transformation. By doubling down on these technologies, Wesfarmers intends to move beyond simple automation, fostering an ecosystem where AI agents actively assist in decision-making, supply chain management, and customer engagement.

The Dawn of Agentic Commerce

At the heart of this announcement is the concept of "agentic development." Unlike passive AI tools that wait for user prompts, agentic AI implies a level of autonomy where software agents can perform complex sequences of tasks to achieve specific goals. For Wesfarmers, this translates into exploring Copilot digital storefronts and integrating AI agents directly into the commercial flow.

This move signals a departure from traditional e-commerce models. Instead of static product pages, future digital storefronts under this partnership could feature dynamic, AI-driven interfaces that understand customer intent, manage transactions, and curate personalized shopping experiences in real-time. By combining high-quality enterprise data with AI agents embedded within the Microsoft ecosystem, Wesfarmers aims to reduce the friction often associated with online retail, offering a more intuitive and responsive customer journey.

Managing Director of Wesfarmers, Rob Scott, emphasized the tangible benefits already being realized. "Our partnership with Microsoft is supporting our increased use of AI across the Group and we are already seeing the benefits, particularly at a team member level with the use of Copilot," Scott noted. The focus now shifts to scaling these benefits, using cloud services to unlock new value streams in priority areas of the business.

Revolutionizing Supply Chain and Operations

Retail giants live and die by the efficiency of their supply chains. The partnership addresses this critical operational backbone by deploying AI to optimize demand forecasting, inventory management, and product availability.

The integration of Azure OpenAI allows for the analysis of vast datasets to predict market trends with greater accuracy. This predictive capability is crucial for brands like Bunnings and Kmart, where inventory turnover and availability are key customer satisfaction metrics. The goal is to reduce operational complexity and cost while ensuring that the right products are on the shelves—or available for delivery—exactly when customers need them.

Furthermore, the collaboration targets core business functions such as engineering, finance, and marketing. Wesfarmers plans to deploy AI agents to automate and augment workflows in these departments. By providing teams with secure access to AI tools and establishing necessary guardrails, the company aims to drastically reduce the time spent on manual, repetitive tasks, freeing up human talent to focus on strategic initiatives and creative problem-solving.

Empowering the Workforce: The Copilot Expansion

A central pillar of this agreement is the substantial expansion of the Microsoft 365 Copilot footprint within Wesfarmers. The company aims to more than double the number of Copilot licenses, signaling a massive vote of confidence in generative AI as a productivity tool.

This decision is backed by proven results. In 2025, Wesfarmers already reported tangible time savings through the use of Copilot. The technology helps employees navigate organizational information, analyze data, and generate insights more quickly.

Case Study: Bunnings Store Teams
The partnership builds on successful pilot programs, most notably at Bunnings. Store teams have been equipped with an AI-powered team member assistant. This tool provides:

• Fast access to organizational knowledge.
• Instant retrieval of detailed product information.
• Real-time operational updates.

By reducing the time team members spend searching for information on terminals or in back offices, the AI assistant enables them to spend more time on the sales floor, engaging in quality conversations with customers. This direct application of AI to the frontline workforce demonstrates the practical, human-centric approach Wesfarmers is taking toward digital transformation.

Strategic Implementation and Governance

Adopting AI at the scale of a conglomerate like Wesfarmers requires robust infrastructure and governance. Microsoft is not merely acting as a software vendor but as a strategic partner providing embedded engineering expertise.

The collaboration includes the establishment of enterprise deployment frameworks and governance models designed to transition AI initiatives from experimental pilots to full-scale production safely. This is particularly important when dealing with "agentic" capabilities, where autonomous actions by AI require strict oversight to ensure alignment with corporate policy and brand values.

Jo Dooley, Vice President of Enterprise at Microsoft Australia and New Zealand, highlighted the transformative potential of the deal. "By harnessing the power of Microsoft’s AI, data, and cloud technologies, we are proud to support Wesfarmers’ mission to unleash productivity, improve customer experience, and enrich customer loyalty across the enterprise," Dooley stated. She added that the partnership aims to set a "new benchmark for transformation across the retail sector."

Key Pillars of the Partnership

To better understand the scope of this multi-year agreement, the following table outlines the primary areas of focus and the technologies being leveraged to achieve them.

Building a Future-Ready Retail Ecosystem

The partnership also places a strong emphasis on skills and capability development. Recognizing that technology is only as effective as the people who use it, Wesfarmers and Microsoft are rolling out training programs focused on Microsoft AI. This initiative ensures that teams across the Wesfarmers group are equipped to adopt these new tools effectively and responsibly.

This focus on education is critical as the nature of work in retail evolves. By demystifying AI and providing hands-on training, Wesfarmers is preparing its workforce for a future where human-AI collaboration is the norm rather than the exception.

Conclusion: A Benchmark for Retail Innovation

The collaboration between Wesfarmers and Microsoft represents more than just a software contract; it is a blueprint for the future of retail in the Asia-Pacific region. by aggressively adopting agentic AI and integrating it deeply into both customer-facing and back-end operations, Wesfarmers is positioning itself to lead the market in efficiency and customer satisfaction.

For the broader AI industry, this partnership serves as a validation of the "agentic" future. It demonstrates that large enterprises are ready to trust AI agents with complex, autonomous tasks, provided there is a strong foundation of governance and secure infrastructure. As these initiatives move from pilot to production, the retail sector will be watching closely to see how agentic commerce redefines the shopping experience.

For Wesfarmers, the message is clear: the future of retail is intelligent, autonomous, and built on the cloud. With Microsoft as a partner, they are well-placed to navigate this exciting new chapter of innovation.