Walmart’s Generative AI Investments Fuel E-commerce Impulse Purchases
Walmart says its early generative AI investments are paying off through both customer- and employee-facing applications, and the company has plans to deploy the technology globally.
The retailer is using generative AI to improve consumer, seller, and associate experiences within both Walmart and Sam’s Club, leveraging large language models developed in-house and those from strategic partners, said Walmart CEO Doug McMillon in an earnings call last week.
In one example, using multiple LLMs helped create or improve over 850 million product attribute data points in their catalog — a task McMillon said would have required nearly 100 times the current headcount to complete in the same amount of time.
Walmart is ahead of the retail pack when it comes to generative AI. Neil Saunders, managing director of retail at GlobalData, tells CGT. “It is not the leader in the space, but it is broadly ahead of the curve.”
Jon Harmon, senior analyst at Coresight Research, notes that being able to create its own language models if needed is "a huge differentiator."
Regarding the headcount comparison, Saunders says many retailers are looking at how many labor hours they can save by using AI, as the repetitive tasks can add up to a lot of saved hours and money.
“Of course, it is also important to assess the quality of the work done by AI and how it is impacting things like customer perceptions, loyalty, and other aspects of the operation,” says Saunders. “That can be more difficult as the impacts are often nuanced.”
While Harmon says the productivity gains are an order of magnitude higher that what they've seen, the figure "seems plausible since generating product attributes and tags is a tedious, highly detail-oriented process, and GenAI excels at finding relationships among and summarizing data, leveraging large amounts of computing power."
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Data Cleanup ROI
As part of their 21% global e-commerce growth in the second quarter, generative AI played a supporting role by helping spur digital impulse purchases, per McMillon.
“One of the interesting things that's happening with generative AI is that cross-category search is more effective, which serves up more general merchandise items, and it helps drive e-commerce profitability,” he said.
“We're in this situation where we've got the best e-commerce food offer, and new tools are helping us connect impulse items that are general merchandise in some cases, which helps us improve both sales and profitability.”
Saunders describes Walmart’s use of generative AI as “classic,” such as aiding customer searches, providing associates with more information, analyzing customer data, and updating product pages online.
“A lot of the AI functions are tied to improving the online experience, which is not surprising as Walmart is very focused on driving sales via its marketplace,” he adds.
Indeed, as part of its efforts, Walmart is testing a generative AI assistant to provide information summaries for sellers on Walmart’s third-party marketplace.
“We want our sellers focused on selling, so the more we can make it a seamless experience, the better,” said McMillon.
The technology is also helping display accurate product packaging images to help associates when picking online orders.
“The quality of the data in our catalog affects nearly everything we do, from helping customers find and buy what they're looking for, to how we store inventory in the network, to delivering orders,” said McMillon.
The retailer’s AI-enabled shopping assistant, already in use with consumers for product search, will soon be able to provide shopping advice and more personalized recommendations by asking shoppers more specific follow-up questions about their needs. McMillon cited the example of a consumer asking about the best TV for sports, and the assistant countering with a question about the lighting in the room.
For Your Radar
Analytics Unite 2025 — held April 28-30 in Chicago — will gather top retail and consumer goods technology leaders to explore how to integrate generative AI across the enterprise. To learn more about this event, catch up on last year’s happenings.
