Courtesy of Walmart
Walmart Doubles Down on People-First Digital Transformation
At the Consumer Electronics Show (CES), Walmart detailed how new AI, GenAI, and AR technologies are reimagining the discounter’s role as a shopping destination. However, Doug McMillon, president and CEO, stressed that Walmart’s “people-led, tech-powered” approach continues.
“Technology is powering new experiences,” said McMillon at the event. “But don’t miss that this is a story about people and their willingness to learn and change, a willingness to adapt, and our ability to imagine tomorrow and bring it to life.”
Among the innovations unveiled at CES, Walmart showcased an upgraded GenAI-powered search experience that uses large language models, including Microsoft’s Azure OpenAI, to let customers search by specific use cases. For example, when planning a Super Bowl party, Walmart’s customers in the past ran numerous searches for chips, wings, drinks, and big-screen TVs. Now, a “Super Bowl Party” search generates relevant, cross-category results.
McMillon said, “Our new search fundamentally changes the way customers engage with us. We become a partner in accomplishing a broader goal like throwing a great party.”
Also online, a new feature, “Shop with Friends,” taps AR to let customers share virtual outfits they create with friends and get feedback on their fashion finds. At the store level, Walmart’s Sam’s Club chain is introducing a technology that lets Scan & Go users avoid waiting in line for receipt verification when exiting the club.
For associates, the My Assistant GenAI tool rolled out in North America in August is being expanded internationally.
Around delivery, Walmart is adding replenishment to its InHome service that delivers goods straight to the customer’s garage or kitchen refrigerator. Whitney Pegden, VP and GM, Walmart InHome, said at Walmart’s CES presentation, “It learns a customer’s purchase patterns to determine the perfect cadence to restock their essentials.”
Walmart further announced that it is expanding drone delivery to 1.8 million additional households in Dallas-Fort Worth, reaching 75% of the area.
Suresh Kumar, Walmart’s EVP and global CTO, said technology is particularly supporting omnichannel behavior across three areas: discovery, purchase, and receive. “This is adaptive retail, meaning that every engagement is interconnected. It’s frictionless and it exceeds expectations,” said Kumar. “We are agile. We are predictive. We are responsive. We are not thinking separately about e-commerce or in-store. We are designing one adaptive, seamless experience for the customer.”
Walmart’s tech investments come as both consumers and firms share concerns about an increasingly digital retail experience, particularly with GenAI’s arrival. A survey of more than 400 C-suite and IT professionals from Portal26 and CensusWide from last fall found that 85% are concerned about GenAI’s privacy and security risks.
Speaking at the Walmart session at CES, Satya Nadella, Microsoft’s CEO, said that as with all technologies, “one has to be mindful that you want to be able to amplify the opportunity with it. And then also be very mindful of the unintended consequences of this technology.”
However, he talked up GenAI’s potential to “empower” both associates and consumers with more intuitive tools that incorporate greater insights and predictive power. Nadella remarked, “At Comdex in 1990…Bill Gates first talked about something called ‘information at your fingertips.’ What we now in 2024 have is ‘expertise at our fingertips,’ and that’s what’s exciting for all of us.”
“We build technology to serve people and not the other way around,” emphasized McMillon. “Walmart’s purpose is to help people live better, and today, more than ever, advances in technology make it feel like anything is possible. Our technology roadmap is compelling and we’re very excited about it, but we’re clear that we are a people-led, tech-powered company. People, our customers and associates, come first and we’ll put technology to work to serve them better than ever.”
Discussion Questions
Does Walmart’s “people-led, tech-powered” approach to digital transformation become more critical with GenAI advances? Which of Walmart’s new technologies unveiled at CES hold the most promise?
Poll
Loading …BrainTrust
Ananda Chakravarty
Vice President, Research at IDC
Harley Feldman
Co-Founder and CMO, Seeonic, Inc.
Walmart’s “people-led, tech-powered” strategy remains crucial amid GenAI advances. The company, at CES, highlighted AI, GenAI, and AR innovations, emphasizing their role in enhancing customer experiences. These include a GenAI-powered search, InHome Replenishment with AI-driven restocking, and AR-enabled “Shop with Friends” for virtual fashion sharing.
Walmart’s approach prioritizes human adaptability and customer satisfaction while leveraging technology for seamless, predictive, and adaptive retail experiences. This strategic balance ensures technology serves people, aligning with Walmart’s commitment to improving lives.
Among the technologies unveiled at CES by Walmart, the GenAI-powered search experience appears promising. This innovation, enabling customers to search by specific use cases and providing relevant, cross-category results, enhances user convenience and personalization.
Now, a “Super Bowl Party” search generates relevant, cross-category results. Uh-huh: while I certainly don’t disagree with, nor dislike, anything I read here, the…well, banality of the above comment, together with the Poll listing, supports my view that AI (and related tech developments) will be much more of an evolutionary – as opposed to revolutionary – change for retail. (And I’m 100% fine with that, as it’s the historical norm…frequent breathless headlines notwithstanding). As for drone delivery, well they’re cute, and have already proven their value: mentioning them allowed Mr. McMillon to fill out his allotted few minutes
These innovations show Walmart seeks to understand, anticipate and serve consumers’ and associates’ evolving needs.
Walmart’s smart, streamlined approach to search is a consumer’s dream. Rather than searching by across multiple categories, Walmart offers holistic, relevant solutions to the shopper’s bigger objective.
The truth is, as technology gets smarter, no one really knows what’s on the other side of possible. The most companies can do today is precisely what Walmart is doing by putting technology in place to serve people, not the other way around.
This people led, tech-powered approach is not only smart but also responsible. Privacy and security risks are real, especially the more companies learn about household consumption and replenishment patterns, as with Walmarts InHome Replenishment; that’s very personal data and Walmart will be held accountable.
Still, as responsible advances are made in retail with AI, both consumers and retailers can benefit. For example, Walmart’s AI powered search that will return everything needed for a SuperBowl party with just one query is a convenient, time-saver for conumers and an efficient basket-building play for Walmart.
Walmart has consistently shown itself to be willing to try and experiment with new technology. What I like most about Walmart’s approach is that the applications are practical and people focused, rather than being fanciful. At the same time as investing in tech, Walmart is also investing in physical stores and other elements of its day-to-day proposition. That’s a recipe for success.
Thankfully, technology remains a little short of completely replacing humans (hype aside), but it continues to exhibit its insane ability to improve human life and make humans better at what they do when properly applied (hype aside). The “Super Bowl Party” search is a great example of technology humanizing an otherwise human less, digital interaction and continuing the trend toward blurring the line between the physical and digital worlds (phygital) in concert with other tech like livestream shopping, shoppable video, VR, AR and yes, even the metaverse (hype aside)…maybe there’s even room for crypto tech (hype aside). The key is to be entertained by the hype because it will never go away but look beyond the hype to see what the “real tech” can do – what real problems it can solve and what real needs it can meet, all profitably, of course.
“Relevant, cross-category results” jumped out at me. Despite all the innovations and convenience options cited, digitally-siloed categories have hampered upside opportunities. The “mix shifts” that Walmart has repeatedly mentioned in earnings reports are a euphemism for “selling-too-many-groceries.” Cross-category recommendation engines, and the ability to (literally) deliver on the results, will help restore balance and plump up margins.
Walmart has its priorities and mission well aligned. Others might well be going for Gen AI under the rubric of “reducing expenses” This approach said otherwise is to enable every Associate to perform at the level of the best Associates. and raise the bar on customer service. That’s a laudable objective.
Yesterday I was at Whole Foods. I used shelf checkout and used the palm of my hand to pay. COOL. How many of us ever imagined waving our hand to pay? Last month, I entered the country simply with facial recognition. How many of us imagined entering the U.S. without using our passports?
The Walmart “Let’s do it” philosophy is perfect. The strategy is focused in the correct place, and they understand the possibilities are broad. It certainly takes a company with resources like Walmart, but it also takes a company with the right mindset to lead the way. Others will never get there.
The future state will have an invisible AI and tech component- that is the key goal- because after all, Technology is not the end state- human productivity is. Walmart embracing tech as a tool and GenAI as a fast moving and evolving one fits this story well. Walmart won’t be bogged down with thinking of replacing labor, but instead making their labor more valuable.
Perfect read: “Walmart won’t be bogged down with thinking of replacing labor, but instead making their labor more valuable.”
Disclosure: I work for Microsoft.
I feel like a few years ago some had written Walmart off – suggesting Amazon were going to eat their lunch. At the same time there was talk about companies need to become technology companies to survive. The fact that they have such a big session at CES illustrates their transformation in focus.
Walmart have done an amazing job and I love how they are using Generative AI – really blazing a trail.
More than that I love their mission – ‘We are a people-led, tech-powered omnichannel retailer dedicated to helping people save money and live better.’ This really resonated with me – encompassing everything that is needed to thrive.
Walmart has always been a leader in testing, innovating and operationalizing technology. The GenAI search is my personal favorite here because most web based and in store search…well it stinks. Horrible user experience. In these large stores search can really make a difference. Get this right and I will probably go there more often!
Walmart’s positioning of AI is strong. It’s there to augment humans and make them more productive, and it’s great to see they are looking at it how it can benefit both their end customers and employees. But it’s early days yet. It may take time to see the impact of AI on key KPIs. In the meantime, the decision to expand scan and go to Sam’s club is clearly based on data from Walmart stores, so more likely to provide quantifiable short term results.
Walmart has low prices, and the more it moves to helping consumers through product recommendations and speedy checkout, in-store or online, the more its business will grow. Using GenAI looks like it will provide Walmart customers as to the best products to buy to meet their needs and help Walmart manage its product selection and inventories. Having said that, people-led strategies will put the consumer in the middle of the Walmart planning instead of just relying on technology.
I my view, Walmart’s commitment to being “people-led, tech-powered” becomes more significant with GenAI advancements. As technology transforms the retail landscape, Walmart’s dedication to people’s adaptability becomes crucial. The upgraded GenAI-powered search, enabling customers to search by specific use cases, holds the promise of enhancing the shopping experience. The “Shop with Friends” AR feature, encouraging customers to share virtual outfits and seek feedback, adds a social and interactive touch. Amid concerns about GenAI’s privacy and security, Walmart’s focus on prioritizing people over technology fosters confidence. This approach ensures that technological advances, like expanded drone delivery and the InHome service, meet the needs of customers and associates while maintaining a people-centric focus.
Walmart’s approach to digital transformation, keeping the people it serves and employees top-of-mind, is a smart strategy. It puts customer-driven tech innovation first.
Their new Scan & Go technology shows an understanding of how consumers want to shop today – quickly and efficiently. By saving them the extra step of waiting in line to check out and get their receipt, they’ve removed a point of friction from the overall customer journey.