Dive Brief:
- Personalization for customers, associate operations and supply chain optimization represent three areas of opportunity in Walmart's AI strategy, according to CEO Doug McMillon, speaking during the retailer’s Q2 2024 earnings call, for the period ending July 28.
- "Our approach to new tools like generative AI is to focus on making shopping easier and more convenient for our customers and members, and helping our associates enjoy more satisfying and productive work," said McMillon. "Ultimately, the power of generative AI or any technology is only as good as the data that powers it."
- The company exceeded Wall Street earnings expectations this quarter, fueled by a 24% year-over-year increase on ecommerce sales. The company will continue to invest in technology, including automation, according to McMillon.
Dive Insight:
Businesses across industries are working on relevant ways to leverage generative AI. In retail especially, the focus is on how the emerging technology can boost customer experiences.
"There's a great opportunity for us to be more anticipatory, and to be more relevant to [customers] and communicate in a way that shows that we know who they are, in a healthy way, while protecting privacy," said McMillon.
The company is already using AI to estimate demand and respond accordingly. With AI, Walmart runs simulations of customer patterns during Black Friday to anticipate bottlenecks and bolster its supply chain readiness.
Additionally, Walmart has turned to augmented reality to strengthen its fulfillment capabilities. An augmented reality tool called Vizpick, rolled out last year, helps workers move products from the backroom and onto the sales floor more efficiently.
In June, Walmart joined the chorus of companies interested in generative AI applications, launching a GenAI Playground, which functions as an internal hub for employees to familiarize themselves with the technology.
The retailer is also working to customize large language models that can fulfill its needs.
"We're taking large language models developed by our partners and by the broader tech community and adding retail context to create models that are uniquely suited to the needs of our customers, our associates and our supply chain," said McMillon.
But before AI can help operations, systems must be fed the necessary data, a step Walmart is working to improve.
"We've been working for a few years now to try and get our data in better shape so that we can really put it to work," McMillon said. "We still have room to improve there, but we have made progress."
