Wesfarmers, Microsoft deepen AI & cloud retail pact

Wesfarmers and Microsoft have agreed to a multi-year strategic partnership to expand the retailer's use of artificial intelligence and cloud services across its Australian and New Zealand portfolio.

The arrangement covers digital initiatives, including broader adoption of Microsoft AI, data and cloud products across Wesfarmers divisions such as Bunnings, Kmart Group, Blackwoods and Priceline.

Wesfarmers plans to expand its use of Microsoft Cloud services, Azure OpenAI, Microsoft 365 Copilot and Microsoft Copilot Studio. The work will also explore "agentic" development-software agents that can carry out tasks on behalf of users within defined guardrails.

The partnership builds on an existing relationship. Recent work has included Copilot licences and training for multiple teams, and the rollout of an AI-based assistant for Bunnings store teams.

Rollout scope

At Bunnings, the assistant provides staff with faster access to organisational knowledge, product information and operational updates. Wesfarmers said it reduces the time team members spend searching for information and increases time spent with customers.

As part of the agreement, Wesfarmers aims to more than double its Microsoft 365 Copilot footprint. It cited time savings recorded in 2025 from Copilot use and said a broader rollout would improve productivity and day-to-day experiences across the group.

Focus areas include experiments with "Copilot digital storefronts" as part of a shift to agentic commerce. This sits alongside supply chain optimisation efforts covering demand forecasting, inventory management and product availability.

The supply chain work will use enterprise data and AI agents embedded in Microsoft's ecosystem. Wesfarmers expects it to improve product availability while reducing operational complexity and cost.

Another focus is applying AI tools across core business functions such as engineering, finance and marketing. The plan includes deploying AI agents to automate and augment workflows, supported by measures for secure access and guardrails.

The partnership also aims to improve access to organisational information and insights, using tools designed to help teams find answers faster, analyse data and make decisions using internal information.

Implementation support

Microsoft will provide embedded engineering expertise, deployment frameworks and governance models, with the aim of moving AI initiatives from pilots into production.

Skills and capability development is also included. Training programs will focus on Microsoft AI tools, with an emphasis on effective and responsible adoption.

Wesfarmers managing director Rob Scott linked the partnership to existing Copilot deployments across the group.

"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 said.

He also highlighted cloud services as a priority for the expanded collaboration.

"This agreement continues our collaboration with Microsoft including, critically, expanding innovative cloud services in priority areas. This will help support our team member productivity and improve the customer experience," Scott said.

Microsoft described the agreement as a retail-focused initiative across Australia and New Zealand, aimed at applying AI across the business.

"This expanded partnership with Wesfarmers opens a new chapter for retail innovation for Australia and New Zealand. 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. Together, we aim to deliver scalable, responsible and secure AI solutions that improve employee and customer experience and set a new benchmark for transformation across the retail sector," said Jo Dooley, vice president of enterprise at Microsoft Australia and New Zealand.

The collaboration is expected to evolve through deployments across Wesfarmers' divisions as it expands cloud adoption and tests AI agents in areas such as commerce, supply chain and corporate functions.