In a groundbreaking collaboration that is reshaping the retail landscape, Microsoft and global retail giant Walmart have joined forces to integrate cutting-edge AI generative search capabilities into Walmart’s platform. The announcement, made at CES 2024, showcased not only the new AI-driven features but also the enduring commitment between the two industry leaders, a partnership that originated in 2018 when Walmart selected Microsoft as its preferred and strategic cloud provider.
This enduring alliance has proven highly fruitful, particularly at a time when Walmart’s online sales are witnessing remarkable growth. In the third quarter of 2023 alone, Walmart’s online sales in the United States surged by an impressive 24%, while global online sales increased by 15%.
Microsoft’s Pivotal Role in Retail Innovation
Microsoft’s influence extends beyond its collaboration with Walmart; it has also forged partnerships with various other retail enterprises to deliver advanced technological capabilities. The tech giant initiated a partnership with the British retailer Marks and Spencer (M&S) in 2018, aiming to test AI capabilities in a retail environment. Additionally, Microsoft has strategically collaborated with consumer goods companies like Unilever, Coca-Cola Bottling Company, Nestlé, Pepsico, and more. Notably, Carrefour announced its collaboration with Microsoft and OpenAI last year to implement an AI-driven chatbot, enhancing the overall customer experience.
Microsoft’s Dominance in Cloud and AI for Retail
In the realm of retail, Microsoft has found a niche with its cloud-based business applications, specifically Dynamics 365, ranking second in usage after the tech sector itself. The integration of ChatGPT into retail enterprises, especially for creating personalized chatbots, positions Microsoft’s Azure OpenAI Service as a frontrunner.
While Microsoft is making strides in the retail sector, it faces a formidable competitor in Amazon. The renewed collaboration between Microsoft and Walmart, leveraging Azure OpenAI Service along with Walmart’s proprietary data, aims to enhance the search experience and provide a more personalized shopping experience—a domain where Amazon has already showcased its prowess.
Fantastic to be at #CES2024 to talk about our longstanding partnership with @Walmart, and how they are applying the power of Azure OpenAI Service, along with their own proprietary data and models, to transform the digital shopping experience.https://t.co/28ff4tMBxs
— Satya Nadella (@satyanadella) January 9, 2024
Evolving Future of Technology in Retail
As major tech companies continue expanding their presence in the retail industry, novel partnerships between tech firms and retailers are emerging. IBM and SAP recently joined forces to develop AI solutions for the packaged consumer goods and retail sectors, aiming to enhance operational and logistical processes.
Time and money are two of the most valuable resources for individuals, and one popular way for Americans to save on both is through online shopping. According to the U.S. Bureau of Labor Statistics, American households dedicate six hours per week to household planning and shopping, with many opting for digital purchases on Walmart, the world’s largest retailer, known for its competitive prices. With over $82 billion in e-commerce sales in fiscal year 2023, Walmart consistently grows its active digital customer base.
In 2024, the company plans to elevate the digital shopping experience further by incorporating generative AI into its search function. This innovative approach, combining Walmart’s proprietary data and technology with large language models available on Microsoft Azure OpenAI Service, promises a curated list of personalized items for each shopper.
Unveiling AI-Driven Generative Search
Walmart introduces a new generative search feature powered by AI, accessible on iOS, Android, and the company’s website. This unique capability is designed to understand the context of a customer’s query and generate personalized responses. Soon, customers can anticipate a more interactive and conversational experience, receiving specific answers to their queries and personalized product recommendations.
For instance, a parent planning a unicorn-themed birthday party for their child can simply ask, “Help me plan a unicorn-themed party for my daughter,” avoiding multiple searches for unicorn-themed balloons, napkins, streamers, and more.
One key reason why Walmart and other leading retailers choose Azure OpenAI Service is the ability to access the world’s most advanced AI models while being backed by Microsoft Azure’s enterprise-level capabilities, including security, compliance, and regional availability. Generative AI in retail is particularly exciting as it marks the shift from “scrolling search” to “goal-oriented search,” making the digital shopping experience smoother and more intuitive.
Walmart’s new generative search function will be available on iOS, Android, and the company’s website. Photo courtesy of Walmart.
Both Walmart and Microsoft share a aligned vision regarding how AI can enhance productivity, job satisfaction, and problem-solving for organizations and their people. Walmart, during the summer, introduced a groundbreaking tool—its new “My Assistant” app, granting its 50,000 non-store associates access to a unique application built on Walmart’s proprietary data, technology, and large language models through Azure OpenAI Service. In just a few months, the app has significantly impacted associates, aiding in various tasks from summarizing lengthy documents to assisting in content creation.
A Success Story in Continual Evolution
This represents the latest evolution in the enduring partnership between Walmart and Microsoft, established in 2018 to drive Walmart’s digital transformation. As a preferred and strategic cloud provider, Microsoft has supported Walmart in diverse cloud projects, from facilitating access to electronic health records in its in-store clinics to centralizing, democratizing, and optimizing data. The collaboration between these two industry giants remains strong, committed to accelerating innovation.
Diverse Applications of AI
While Walmart’s approach to generative AI utilizes a combination of large language models, retailer-specific models, and proprietary data on Azure OpenAI Service, other retailers may have distinct scenarios requiring alternative approaches. Microsoft offers a wide portfolio of pre-designed, low-code, and professional-code solutions that can benefit retailers and shoppers alike, regardless of where they are on their respective journeys.
A Long-Standing Commitment: Walmart and Microsoft’s Journey Since 2018
CEO Doug McMillon and Microsoft’s CEO Satya Nadella took the stage at CES 2024, not only unveiling the new AI-enabled features but also emphasizing their enduring commitment dating back to 2018. Walmart’s choice of Microsoft as its preferred cloud provider six years ago paved the way for innovative cloud projects, focusing on AI and machine learning solutions.
See also: Walmart and Unity To Bring Immersive Commerce to Games, Metaverses and Apps
Walmart’s Digital Shopping Enhancement in 2024
In 2024, Walmart is set to further enhance the digital shopping experience by incorporating generative AI into its search function. This innovative approach, combining Walmart’s proprietary data and technology with Microsoft Azure OpenAI Service, aims to offer a curated list of personalized items.
For more insights into Microsoft’s offerings for the retail sector, visit Microsoft Cloud for retail
Conclusion
As technology giants forge deeper into the retail realm, partnerships like Microsoft and Walmart’s exemplify the transformative power of AI. The integration of generative AI in shopping experiences not only marks a shift from scrolling searches to goal-oriented ones but also promises a seamless and intuitive digital shopping journey.
FAQs
How does Walmart’s generative AI-powered search differ from traditional search functions?
Walmart’s generative AI understands context, offering personalized and interactive responses, enhancing the overall search experience.
What sets Microsoft’s Azure OpenAI Service apart in the retail sector?
Azure OpenAI Service provides access to advanced AI models while ensuring enterprise-level security, compliance, and regional availability.
How has Walmart’s digital transformation impacted its online sales?
In the third quarter of 2023, Walmart’s online sales in the U.S. saw a remarkable 24% increase, showcasing the positive impact of digital transformation.
What tasks can associates accomplish using Walmart’s “My Assistant” app?
Walmart’s associates leverage the “My Assistant” app for tasks ranging from summarizing documents to aiding in content creation.
Why is the collaboration between Walmart and Microsoft considered a success story?
The partnership, established in 2018, has consistently driven digital transformation, cloud innovation, and data optimization, making it a testament to ongoing success.
What is the significance of the collaboration between Microsoft and Walmart in the retail industry?
The collaboration between Microsoft and Walmart is a game-changer in retail, revolutionizing the shopping experience through cutting-edge AI generative capabilities. It brings a personalized touch to online shopping, enhancing customer satisfaction and engagement.
How does Microsoft contribute to the retail sector beyond its partnership with Walmart?
Microsoft goes beyond Walmart, forging partnerships with various retailers and consumer goods companies. Its influence extends to AI applications, cloud-based solutions, and innovative collaborations, making it a key player in advancing retail technology.
What sets Microsoft’s Azure OpenAI Service apart in the retail landscape?
Azure OpenAI Service by Microsoft stands out for providing access to the world’s most advanced AI models. Its integration with Walmart’s proprietary data ensures a secure and efficient platform, marking a significant step in reshaping the future of retail.
How does Walmart’s generative AI search function enhance the digital shopping experience?
Walmart’s generative AI search transforms the online shopping journey by understanding customer queries and generating personalized responses. This innovative feature shifts the paradigm from traditional scrolling searches to goal-oriented searches, creating a more fluid and intuitive experience.
Can you share a success story stemming from the collaboration between Walmart and Microsoft?
Certainly! One remarkable success story is Walmart’s introduction of the “My Assistant” app, benefiting 50,000 non-store associates. This app, built on Walmart’s data and technology through Azure OpenAI Service, showcases how AI can significantly impact tasks, from document summarization to content creation.
How does Microsoft cater to different AI needs in the retail sector?
Microsoft recognizes the diverse AI requirements of retailers and offers a broad portfolio of solutions, including pre-designed, low-code, and professional-code options. This ensures flexibility, addressing the unique scenarios and challenges faced by retailers in their AI journey.
In what ways does the collaboration between Walmart and Microsoft contribute to the future of retail technology?
The collaboration accelerates innovation, paving the way for future advancements in retail technology. It sets the stage for a more interactive, personalized, and emotionally resonant shopping experience, anticipating and meeting the evolving needs of consumers.
How does Walmart’s AI generative search benefit customers in real-life scenarios?
Walmart’s AI generative search simplifies real-life scenarios. For instance, a parent planning a themed party can ask specific questions like “Help me plan a unicorn-themed party for my daughter,” receiving tailored suggestions and eliminating the need for multiple searches.
How does Microsoft’s influence in Dynamics 365 contribute to its role in the retail sector?
Microsoft’s Dynamics 365, ranking second in usage after the tech sector itself, plays a pivotal role in retail. Its integration with ChatGPT for personalized chatbots positions Azure OpenAI Service as a leader in providing advanced AI capabilities to retailers.
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