Today’s Walmart is different. We are led by people and powered by technology.

A statement of intent from Walmart CEO Doug McMillon. And as Walmart advances technologically in 2024, it inevitably means that generative AI must be at the heart of your corporate strategy. Walmart has made no secret of its ambitions to use this technology and McMillon argues that the retailer delivers on these promises by emphasizing:

We’re finding concrete ways to use generative AI to improve the experience of customers, members and partners. We’re leveraging data and large language models from others and building our own.

For example, we used generative AI to improve our product catalog. The quality of the data in our catalog impacts nearly everything we do, from helping our customers find and buy what they’re looking for, to how we store inventory across the network, to how we deliver orders. We used multiple Large Language Models to accurately create or improve over 850 million records in a catalog. Without the use of generative AI, this work would have required nearly 100x the current headcount over the same period of time.

This 100 times more productive concept is crucial, adds John Furner, CEO of Walmart US:

That’s really important in the context of the marketplace, where we’ve really expanded both the number of sellers and the number of items in the assortment. So we feel more and more that Walmart can sell customers anything they’re looking for. And for the new sellers, it’s an exciting time because there’s so much momentum in the business overall.

So the AI ​​product that we used helped us understand the attributes and properties of hundreds of millions of items. That would have taken, as I said, 100 times longer if we tried to do that manually. So if we really want to understand the intent of a customer in every session when they’re on the website or in the store, we can tailor the catalog to their intent much more effectively because the details of each item and the product display pages have gotten so much better. So that’s an example of how we’re using the latest technology to try and improve the customer experience.

This in turn improves potential sales, notes McMillon:

One of the questions we were often asked was, “How do you feel about e-commerce in terms of impulse purchases? People go into stores and clubs and buy things that they didn’t necessarily have on their list when they walked in. Is that possible with e-commerce?” And one of the interesting developments with generative AI is that cross-category search is more effective, offers more general merchandise, and increases e-commerce profitability.

He adds:

Because we’re doing everything we can to help our sellers grow their business, we’re testing a new feature for select sellers in the U.S. that will allow them to ask us any question they may have. We want our sellers to focus on selling, so the more seamless we can make the experience, the better. The new assistant quickly summarizes and gives the seller concise answers without having to wade through lengthy articles or other materials.

There are also clear benefits for Walmart employees, says McMillon:

Associates picking up online orders can find what they’re looking for faster by displaying high-quality images of product packaging. Customers and members already benefit from AI-powered search in our app and website. And now they’ll get even more help with a new shopping assistant that offers advice and ideas and answers questions like which TV is best for watching sports. In the future, the assistant will be able to respond with more specific follow-up questions, such as, “What’s the lighting like in the room where you’re going to put the TV?”

My opinion

The use cases for this technology are diverse and affect nearly every area of ​​our business. We will continue to experiment with and deploy AI and generative AI applications around the world.

Aside from the AI ​​hype cycle, another technology-related point worth noting is the performance of Walmart’s e-commerce business, which currently has a 21% year-on-year growth rate globally and 22% in the US. That doesn’t mean the online retail arm is making a profit yet, although global losses are reportedly “continuing to decline.” McMillon doesn’t want to go into too much detail about when a profit might actually be made, explaining:

On the e-commerce profitability, I’ve been trying to get everybody to understand for some time now not to get too hung up on it. We have a business here with a lot of variables and we’re going to manage them all and it’s going to be new businesses that we’re investing in that aren’t making money in the short term but are making money in the medium to long term. And at some point we’re going to tell you that we’ve crossed a threshold and that e-commerce is profitable… But at Walmart, I wouldn’t get too hung up on one metric, whether it’s advertising revenue or membership fees or e-commerce profitability, look at the total. We have a great and huge store and club business around the world that is profitable. We make money on groceries. We make money on consumer goods. We make money on general merchandise. And we’re going to make money on e-commerce at some point. And we’re getting to the zone where it’s going to cross a threshold. And we’re going to talk about that at some point and then we’ll put that aside and talk about something else.

There will likely be many questions about whether generative AI is measurable in the end result.

But that’s for another day.

Further.