Walmart CEO Doug McMillon gave the keynote speech on the first day of the Consumer Electronic Show (CES) in Las Vegas. CES expected 130,000 attendees and 4,000 exhibitors to attend this year’s four-day event, based on pre-show registration. Those numbers include retailers, technology vendors, journalists and others gathered to discuss the latest trends in technology. 

In the keynote, McMillon shared how Walmart will use AI to improve the Walmart and Sam’s Club apps. He described plans for a more efficient supply chain and the launch of drone delivery.

“Business leaders are standing at a fork in the road,” he said of how to approach advancing technology, particularly AI. He asked Microsoft CEO Satya Nadella how Walmart and other companies can use generative AI for societal good.

“With all new technology, one has to be mindful that you want to amplify the opportunity with it, and be mindful of unintended consequences,” Nadella said. 

Walmart ranks No. 2 in the 2023 Digital Commerce 360 Top 1000, a ranking of North America’s leading retailers by online sales. It also ranks No. 9 among global marketplaces by gross merchandise value.

Microsoft is one of the leaders in AI technology and is the largest shareholder of OpenAI, the company behind ChatGPT. The technology company provides a variety of services to retailers in the Top 1000, including web analytics, online advertising, and cloud services.

Walmart works with Microsoft on generative AI

Walmart released a new generative AI-powered search capability in its app, available immediately for iOS users. The retailer plans to release it to all app users by the end of the quarter.

McMillon invited Nadella on stage to share that Walmart’s app uses Microsoft’s Azure OpenAI. The new search function uses Microsoft’s large language model (LLM) alongside Walmart’s data to give consumers relevant results across product categories. McMillon gave the example of a shopper hosting a Super Bowl watch party. Rather than searching for a new TV, chicken wings, chips, and other essentials, one search would generate all of these items, he said.

The generative AI search will also take into account factors about the specific app user. A consumer’s location, search history, and other relevant information will be used to further refine their results, McMillon said. 

Walmart’s apps get AI features

The big box retailer announced several other updates to its Walmart and Sam’s Club apps on Tuesday afternoon.

“We have a digital relationship with [Sam’s Club] members,” even when they’re physically shopping in the store, said Megan Crozier, chief merchant at Sam’s Club. 

Members can skip checkout by scanning items and paying on their phones. As consumers shop, the Sam’s Club app also has an AI-powered feature to remind them of items they might have forgotten that are typically purchased with the products in their carts. Customers will no longer have to wait in line while an employee checks their receipts to confirm purchases, Crozier announced. Sam’s Club is rolling out an AI and computer vision technology that will automatically confirm purchases so consumers can walk right out of the store.

Walmart also unveiled a feature called “Shop With Friends.” App users can use AI and AR to create a model and virtually try on outfits. They can then send them to contacts in their phone and get feedback through the app.

Walmart+ customers also got an update courtesy of AI. The retailer announced InHome Replenishment, which will use AI to restock members’ essentials and deliver them directly into their refrigerators or pantries. The feature uses AI to learn what products a customer regularly repurchases and how quickly they go through it, to automatically reorder more when needed. It’s different than a subscription, Walmart says, because deliveries aren’t for a static time period. Instead, the replenishments will adjust to the user’s needs.

Walmart’s supply chain and fulfillment

Supply chain was the other key topic for Walmart speakers at CES.

“There’s never been a period of change in our supply chain like the one we’ve started,” said chief technology officer Suresh Kumar.

Walmart previously had three separate supply chains to carry non-grocery items, perishable items, and ecommerce items. Now, it is combining them into one supply chain as consumers increasingly shop across all three categories.

Now, Walmart is implementing automated machine learning into Walmart Fulfillment Centers to predict customer behavior and allocate the right products to the right locations, Kumar said. The models use dozens of types of data, including historical sales data, weather forecasts, and how an item is trending on social media. 

A more efficient supply chain allows customers to receive the products they want faster, he says. The next way Walmart will deliver these items is with drone delivery, working with Wing and Zipline. Walmart will expand drone delivery to 75% of households in the Dallas-Fort Worth metro area by the end of 2024. Drone deliveries will be Walmart’s fastest delivery option, promised in under 30 minutes and sometimes taking just 10 minutes, Walmart says. About three-quarters of items in a Walmart store meet the delivery requirements for drones, which can deliver in a 10-mile radius.

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