How Walmart is using AI to update key functions like search

Cale Guthrie Weissman hosts John Alfernis, Walmart's Chief Product Officer, discussing Walmart's strategic use of technology, particularly AI, to enhance both customer and associate experiences. Alfernis highlights initiatives like guided search, which simplifies product discovery, and tools that streamline store operations, such as digital shelf labels and RFID-enabled inventory management. He emphasizes Walmart's omnichannel approach, integrating e-commerce and physical stores to meet customer needs efficiently. Alfernis also touches on future innovations, including predictive subscriptions and AI-driven automotive services, underscoring Walmart's commitment to leveraging technology for improved service and efficiency.

• John Alfernis is the Chief Product Officer and Executive Vice President at Walmart.
• Discussion about the busy nature of retail, especially as the holiday season approaches.
• Alfernis has been with Walmart since 2022, previously worked in product management at Varro, Lyft, and Google.

"It's our job to really act as a nexus point, to bring together, whether it's folks in design, engineering, the business science, to solve customer problems that deliver against the business goals and the business outcomes at scale."

• Explanation: The role of a Chief Product Officer is to integrate various departments to achieve customer and business goals.

• The role involves understanding resources, prioritization, and looking at things from the customer's perspective.
• Alfernis leads a team of about 500 product managers and sets the framework for product management within Walmart.

"My goal isn't to dictate that this is the way that we do things, my way or the highway, but it's how do we figure out the smallest set of things that we can do consistently as product managers across the board."

• Explanation: Emphasizes a collaborative approach to product management, focusing on consistency across the board.

• Alfernis spent his first year listening and learning before making any changes.
• The aim is to improve existing processes without drastic changes.
• Focus on defining charters for product management teams to ensure clarity and reduce overlap.

"One of the things that we've looked at is how do we better define the units or the segments of work that each of our product management teams is taking on by clearly defining and enunciating charters around."

• Explanation: Defines the importance of clear charters to streamline work and improve efficiency.

• Walmart aims to integrate various points of view while making singular decisions to avoid bureaucratic delays.
• Charters help in preventing overlap and ensuring reusable technology components are built.

"Instead of building wholly separate teams and running them separately and then building the same thing over and over again, how do we bring that work closer together so that we can build common, reusable pieces of technology and deploy them in those two separate places?"

• Explanation: Highlights the strategy to avoid redundancy and promote efficiency by integrating similar work efforts.

• Separate teams for e-commerce and retail, but efforts are made to integrate these two closely.
• The goal is to provide a seamless experience for customers, whether online or in-store.

"One of the really exciting things that Walmart has done over the course of the last four or more years, this happened before I got there, was not looking at the world in channels anymore, in e-commerce or online and offline, but really to put everything under one umbrella."

• Explanation: Walmart's strategy to unify online and offline channels to create a cohesive customer experience.

• Omnichannel DNA is a core operational philosophy.
• Teams are kept close together and share roadmaps to integrate efforts.
• Example: Last mile delivery integrates physical in-store and digital e-commerce experiences.
• Unique differentiator: Ability to ship products from stores to customers within hours.

"It's bringing to life this physical in-store experience, but also this digital e-commerce experience so that as a customer, you can buy whatever you would like online at Walmart. And if we have it available in a store, we can get that shipped to you the same day, oftentimes within hours."

• Explanation: The omnichannel strategy enhances customer experience by combining in-store and online shopping, enabling quick delivery.

• Importance of e-commerce to merchants and overall business health.
• Regular meetings (e.g., trade meetings on Mondays) to discuss business health and customer impact.
• Holistic and integrated approach to both in-store and online operations.

"The boundaries between the in-store piece and the online piece really have been broken down. And it's what not just makes this business and opportunity exciting, it's one of the things that makes it challenging as well, because you have to approach it from this way if you're going to win."

• Explanation: Success requires a seamless integration of in-store and online operations, making it both exciting and challenging.

• Feedback from multiple channels: customer surveys, emails, direct feedback to executives.
• Nuanced metrics for evaluating customer experience, such as search optimization and abandonment rates.
• Direct interaction with customers and in-field experiences to gather insights.

"We bring in feedback information from our customers from all angles, all dimensions that we have. So things like customer surveys, feedback forms. Absolutely. Things like emails to myself, to the team, to my bosses, to Doug McMillan."

• Explanation: Feedback is collected from various sources to understand customer needs and challenges.

"We also, with our design teams, we have panels of customers. We'll sit in front of customers and we'll watch them interacting with the products."

• Explanation: Direct observation of customer interactions helps identify unexpected issues and improve product design.

"We get out in the stores very frequently. We do jobs alongside our associates in the stores, whether it's picking for last mile delivery or operating cash registers on the checkout side of the world to understand what works and what doesn't."

• Explanation: Hands-on experience in stores provides practical insights into operational effectiveness and customer satisfaction.

• Focus on leveraging AI and large language models to solve customer problems.
• Examples include guided search to better understand customer intent.

"In 2024, I think one of the big focuses for us has been around leveraging artificial intelligence, large language models, all of that emerging technology in ways that really solve problems for our customers, customers in just really magical kinds of ways."

• Explanation: AI and emerging technologies are prioritized to enhance customer experience and operational efficiency.

"One of these things is guided search. So instead of making the customer do all of the work..."

• Explanation: Guided search aims to simplify the customer experience by understanding and anticipating their needs.

• Guided search simplifies the customer experience by breaking down broad tasks into specific queries.
• Customers can input broad intents, and the system will suggest relevant products and steps.
• The process is designed to make shopping easier and more efficient.

"I'm planning a birthday party for a seven-year-old who's really interested in dinosaurs. Okay, well, I'm guessing you want some dinosaur-themed cups and plate ware, and maybe these would be appropriate balloons and these could be appropriate toys for others to bring to the party, et cetera."

• Example of how guided search can break down a broad task into specific product suggestions.

• Generative AI and large language models are used to summarize dense information.
• These tools help customers quickly access key highlights and reviews of products.

"We're also looking at summarizing item highlights, review highlights, almost synopses of this dense information that we have available on our site."

• AI tools are employed to condense and present essential information efficiently.

• MIAT is a comprehensive tool used by over a million associates for various tasks.
• It assists with payroll, clocking in/out, and identifying the next best action to take.
• AI helps associates provide better customer service by informing them of product availability.

"On the associate tools side of the world, we have this overall framework tool called MIAT. So our a million-plus associates use MIAT as a tool on their phones that helps them with everything that they would need to do to do their job."

• MIAT is a multifunctional tool designed to streamline associate tasks and improve efficiency.

• RFID and augmented reality technologies help associates manage inventory more effectively.
• Associates can use their phones to identify the contents of boxes and manage stock more efficiently.

"Imagine the back of a Walmart is full of just many, many large cardboard boxes, but you need to know what's in the box in order to be able to unload it and be able to bring those things out."

• Advanced technologies are deployed to simplify and expedite inventory management.

• AI is used to improve traditional search and product page results.
• The focus is on solving customer problems and enhancing their shopping experience without emphasizing the AI aspect.

"If you do it right, you shouldn't be branding it as AI. You should just bring the magic to customers. They'll be delighted and come back to it time and time again."

• The goal is to integrate AI seamlessly into the customer experience, making it more intuitive and effective.

• Strong partnerships and processes ensure smooth integration of new technologies for associates.
• AI tools are designed to complement, not replace, the human touch in customer service.

"One of the things that makes Walmart really special is the way that you are treated as a customer inside a Walmart store with respect to the associates being greeted on your way in."

• The integration of AI tools aims to enhance the existing customer service experience.

• Traditional binders with store procedures are replaced by AI-driven assistants.
• Associates can quickly access information through their phones, saving time and improving efficiency.

"We've taken those binders and we've ingested them using large language model technology, and we've built a lightweight assistant, or whatever you want to call it for our store associates."

• AI-driven assistants provide quick access to procedural information, enhancing associate productivity.

• New tools and technologies are tested on a small scale before being rolled out widely.
• Feedback from associates is crucial in refining and scaling these tools.

"We start small and we scale and we listen for feedback, and we take that feedback seriously. Sometimes the feedback suggests that we shouldn't be doing what we're doing."

• The iterative process ensures that new technologies are effective and well-received by associates before full-scale implementation.

• Walmart employs a cautious and iterative approach to rolling out new products and innovations.
• Initial deployment is limited to select stores or regions, allowing for feedback and necessary adjustments.
• The decision to scale up is taken seriously due to the complexity of reversing widespread changes.
• Emphasis on direct interaction with associates and customers to ensure the relevance and effectiveness of new ideas.

"We take that decision pretty seriously, because once you start rolling it out broadly across the United States, it's a much harder thing to put the genie back in the bottle."

• Highlights the importance of careful consideration before large-scale deployment.

"It's thoughtfully, it's carefully. This is also why it's so important for folks on my team to spend time with the associates and the customers one on one."

• Emphasizes the role of direct feedback from associates and customers in the iterative process.

• Walmart has initiated AI-driven projects, starting with small traffic experiments.
• Examples include product comparisons in specific verticals like electronics.
• Metrics and feedback are closely monitored before scaling up.

"We've started small with small traffic experiments. Sometimes we'll start it and we will do it for only select verticals."

• Describes the initial small-scale approach to AI implementation.

"We're able to look at the metrics, we're able to listen for the feedback, and if that feels kosher, if that feels okay, then we scale up from there."

• Underlines the importance of metrics and feedback in deciding to scale up AI initiatives.

• Walmart is exploring the use of digital shelf labels to streamline price changes and reduce associate fatigue.
• Initial deployment is in test facilities and select stores to assess readability and other functional aspects.
• Potential applications include aiding associates in locating items for online pickup and delivery.

"We're looking at deploying digital shelf labels in certain cases to help reduce some of the otherwise annoying task of associates running around and changing prices."

• Explains the motivation behind adopting digital shelf labels.

"One of the great applications here, for example, is helping when folks are looking for or picking items for online pickup and delivery."

• Highlights a practical application of digital shelf labels to improve efficiency.

• Focus on ensuring that existing solutions meet customer needs during the holiday season.
• Enhancements in search functionality and product descriptions are expected.
• Tools for associates aim to improve in-store customer interaction and expedite product delivery.

"We try to do across the product teams at Walmart is not really necessarily bring any bespoke solutions to life just for the holiday."

• Indicates a preference for consistent, year-round solutions rather than holiday-specific innovations.

"We have been leaning in very heavily on that immediacy, on making sure that the entire inventory of what's available in a store near myself or UKL is something that you can get delivered to your home within that same day very, very quickly."

• Emphasizes the importance of quick delivery during the holiday season.

• Walmart is exploring AI applications beyond product search, including vehicle maintenance and predictive subscriptions.
• Potential for customers to receive alerts and recommendations for vehicle maintenance through Walmart.
• Predictive subscriptions aim to optimize delivery frequencies based on customer usage patterns.

"Imagine being able to take a photo of that, bring it into Walmart, or send it into Walmart, or provide it to us in some way and allowing us to say, hey, it's this, you need oil fluid."

• Illustrates the potential for AI to assist in vehicle maintenance.

"With subscriptions, one of the things that we can start to do over time is we can get predictive about it as well."

• Highlights the goal of making subscriptions more personalized and efficient.

• Walmart aims to make subscription services more personalized and adaptable to customer needs.
• Customers can modify subscription frequencies and delivery schedules easily.
• Predictive capabilities aim to prevent overstocking and ensure timely deliveries.

"Oftentimes, the way that we're approaching subscriptions is to make it easy for you to modify the subscription, make it more frequent, less frequent."

• Describes the flexibility offered in subscription services.

"We want to make it as easy as possible for you to say, whoa, whoa, whoa, whoa. I only need it twice as often as I thought I needed it."

• Emphasizes the goal of preventing overstocking through predictive adjustments.

• The conversation highlights Walmart's strategic approach to innovation, emphasizing careful, feedback-driven iterations.
• AI and digital technologies play a significant role in enhancing customer experience and operational efficiency.
• Future plans include expanding AI applications and making subscription services more personalized and predictive.

"This has been an amazing conversation. We're sadly out of time, but I really appreciate you taking the time to chat with me."

• Concludes the discussion, reflecting on the insightful exchange of ideas.

"Likewise. This has been my pleasure. I've really enjoyed it. I look forward to doing it again someday."

• Expresses mutual appreciation for the conversation and interest in future discussions.