Walmart is developing its own artificial intelligence language models to improve supply chain efficiency and better connect with customers, CEO Doug McMillon said Thursday during the company’s second quarter earnings call.
The retail giant is currently developing its own generative AI language models and utilizing those developed by the broader tech community, McMillon said, according to a transcript from financial services site Sentieo.
“As it relates to technology, 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,” McMillon said. “Ultimately, the power of generative AI or any technology is only as good as the data that powers it. Our data assets are unique, and we're excited about the potential to leverage them in new and impactful ways.”
The language models Walmart is developing will “unlock value for shareholders through the combination of our physical automation work with our data and increasingly intelligent software,” McMillon added.
He said the company has been focused for the last few years on getting Walmart’s data “in better shape so that we can really put it to work.”
Strengthening Walmart's ability to personalize content for customers “effectively still living in an EDLP (every day low prices) world” is a “winning strategy” for the company, he said. “I’m really excited about what’s possible,” McMillon added.
He said generative AI provides an opportunity for Walmart “to be more anticipatory and to be more relevant to them and communicate in a way that shows that we know who they are in a healthy way, while protecting privacy.”
McMillon added that AI provides a number of opportunities to assist the company’s associates.
“The supply chain is the third area that comes to mind,” he said. “So, I think this will be an opportunity for us for a really long time to try and grow top line and be more efficient as a company by putting that technology to work,” he said.
Walmart did not immediately respond to a WGB request to comment on the AI initiatives.
The company has already made progress in its use of AI.
Walmart announced in May 2022 that its partnership with robotics firm Symbotic would enable the company to automate 42 of its distribution centers. About a month later, Walmart purchased a majority stake (62.2%) in Symbotic.
Walmart has focused much of its attention on improving supply chain efficiency, and the work is paying off, McMillon said in early April during Walmart’s first quarter earnings call.
“We’re now able to fulfill customer needs with a flexible, connected omnichannel network enabled by data. Membership is the customer’s preferred way to pay for delivery, and it creates a lot of opportunity for us. It deepens engagement, helps enable personalization and enables us to offer more services to our members,” McMillon said.