EXCLUSIVE: Walmart Debuts 'Adaptive Retail' Strategy at CES
The annual CES Show in Las Vegas is known for being the place to learn where technology is going to innovate next. But Walmart seized the CES stage this year to tell us where it sees the future of food retail going next.
CEO Doug McMillon stepped up to greet a packed CES ballroom audience in the Venetian hotel on Jan. 9 and began his presentation by saying that business leaders are standing at a fork in the road, with two paths ahead.
“One path is to completely prioritize technology. To maximize what's possible without considering the people implications,” McMillon said.
While he was speaking, McMillon flashed the words "technology," "people-led," and "tech-powered" on the giant Walmart-blue screen behind him.
“Then there's the other path. It's more nuanced. It's one where the benefits of technology are pursued, but people are considered along the way. This is by our heads and our hearts. The underlying principle is that we should use technology to serve people, and not the other way around. This path enables people to do things in more efficient and enjoyable ways. We're choosing the second path,” he added.
It was the first time this year that McMillon so eloquently made clear that Walmart, which over the past few years has invested heavily in tech initiatives, intends to continue founder Sam Walton’s servant leadership legacy of “people first” even in the face of relentless transformation – and competition – in the industry.
“Sam challenged us to design our business to make a bigger, more positive difference in our world,” McMillon said. “That's what inspires us to solve problems and address our own imperfections. Making a real difference for so many families is what gets us up, and fires us up, every morning. … We love what technology can do, but we're building it in a way that creates better careers at the same time it creates the best customer experiences, and a stronger business.”
To tell the Walmart future story, McMillon used the opportunity of his keynote address – a first for the retailer at CES – to serve up the best and brightest minds from his executive leadership team. They each gave a glimpse of how the retailer sees the future of food retail.
Hitting the CES stage were Megan Crozier, chief merchant at Sam’s Club; Latriece Watkins, EVP and chief merchandising officer of Walmart U.S.; Donna Morris, chief people officer; Suresh Kumar, EVP, global chief technology officer and chief development officer, Walmart; Whitney Pegden, VP and GM, Walmart InHome; Vishal Kapadia, SVP, energy transformation at Walmart, and a few others.
Sam's Differentiation
Crozier, who recently celebrated 20 years with the company, gave an overview of a new Sam’s Club offering AI that allows members to exit the store without having to show their receipt to an associate.
“At Sam's Club, we care about every second a member spends with us, so eliminating even the few seconds it takes to scan a receipt at the exit door is well worth it,” Crozier said. “We're live in Dallas with this exit technology and our plan is to roll it out nationwide at the end of the year. And the journey continues. We'll keep finding the ways to give our members what they want most. Great ideas, unmatched convenience, and time back for the more important things in life.”
Next up Watkins, who was elevated to chief merchant last year and who also has decades of service with the company, appeared on stage to explain Walmart’s next evolution when it comes to generative AI (GenAI) and AR innovations. In addition to improving and expanding its grocery assortment to satisfy consumer demand for products with "more flavor, variety and natural ingredients," Watkins said Walmart is also expanding its elevated brands. The retailer is launching new GenAI-powered search, InHome Replenishment and a beta social commerce Shop with Friends platform. The technology supporting Walmart's GenAI offerings will be powered by large language models made available through a partnership with Microsoft.
“We're investing in search and discoverability, and we're making exciting progress,” Watkins said. “We have a new feature called 'Shop with Friends,' which is just one more way we're creating an engaging and interactive experience for our customers and for their friends.”
Replenishment 2.0
Watkins then introduced Pegden to talk about how the company is ramping up its in-home grocery delivery service.
“Customers who are Walmart Plus InHome members will soon have access to replenishment,” explained Pegden. “It's a feature we're building using AI to get a personalized replenishment algorithm. It learns the customer's purchase patterns to determine the perfect cadence to restock their essentials. So the long list of things you purchase frequently, whether it's the ones you need every week, or the things you need every 17 days, they'll be there the moment you open the fridge or pantry. And you don't have to lift a finger.”
Pegden made sure to emphasize that the new Walmart service is not a subscription (like Amazon's Subscribe & Save program, for instance).
"It's not a subscription," Pegden said. "For example, I know in my house, we consume a lot of yogurt, waffles, milk, some other things, but how much? And what exactly are those other things? Our replenishment service solves that. It's personalized and adjusts based on your changing needs. Not only are we going to get you what you need, we're going to get it to you when you need it, and even where you need it, right to your refrigerator."
"What if I change my mind, or I'm out of town," Watkins asked Pegden.
"You can adjust for that if, say, you know you'll be away for vacation, and you don't want more milk showing up," Pegden answered. "That's all in your control. Bottom line, the entire shopping experience is automated, from filling the basket to delivery to your refrigerator, whether that's in your kitchen or your garage."
Adaptive Is the New Omni
A little later in the keynote session, Walmart's chief technologist, Suresh Kumar, showed up to explain the company's new customer strategy as “adaptive retail.”
“While omnichannel retail has been around for decades, this new type of retail – adaptive retail – takes it a step further. It’s retail that is not only e-commerce or in-store, but a single, unified retail experience that seamlessly blends the best aspects of all channels. And for Walmart, adaptive retail is rooted in a clear focus on people,” Kumar said.
Another highlight of the presentation happened when McMillon brought out surprise guest Microsoft CEO Satya Sadella, who offered his thoughts on the AI revolution poised to take retail by storm in 2024.
“I think with all new technology, one has to be mindful that you want to be able to amplify the opportunity with it, and then also be really mindful of the unintended consequences of this technology,” Sadella said.
Meanwhile, Walmart energy expert Kapadia hit the stage to talk about Walmart’s journey to reduce the impact of its operations on the environment.
By the end of 2030, the company aims to advance its transition toward emissions-free energy by enabling up to 10 gigawatts of new clean energy projects into service on- and off-site – the equivalent of the annual power consumption of more than 2 million households. This will enable tens of thousands of U.S. households to save on their electricity bills.
“We're on track to power more than 50% of our operations with renewable energy by 2025,” Kapadia said. “But we need to do more. It's a start, but we want to accelerate our journey to decarbonize our operations and be powered by 100% clean energy well before our 2035 target. We're significantly expanding our portfolio to offset clean energy, focusing on high-impact, high-quality projects that deliver the right outcomes in the right places."
[Read more: "10 Most Sustainable Grocers"]
Toward the end of the keynote session, chief people officer Morris appeared on stage to talk about the retailer’s GenAI tool for U.S. and Canada campus-based associates called My Assistant, which was created in-house by Walmart’s Global Tech team. She announced plans to expand the tool. In the year ahead, campus associates in 11 countries will be able to interact with My Assistant in their native language. From speeding up the drafting process, to serving as a creative partner, to summarizing large documents, My Assistant is changing how associates work and solve problems.
“Today, in the United States, we have over 250,000 frontline associates that are powering our online pickup and delivery business," said Morris. "That's four times larger than we had in 2019 in this area of business. The roles, responsibilities and skills of our 2.1 million associates across the globe will continue to change. They'll be leveraging technology, but most importantly, our humanity, for impact."
Morris continued: “As customer expectations have changed, we've also accelerated the digital journey for our own associates, and we built an app called Me@Walmart. Me@Walmart gives our associates the ability to manage their schedules, gain new skills that can assist them in moving across these roles in the company, and even make changes to personal benefits, such as their 401(k) or stock purchase plan. We're on a journey to combine nearly 300 disparate systems into Me@Walmart. For our campus associates, this includes MyAssistant, which is powered by generative AI. It contributes to productivity that includes deploying and creation of documents, calculations and product specs. Since launching MyAssistant late last year in the United States and in Canada, we're super excited to be rolling it out to our associates in many other locations, including Mexico, Central America, Chile, South Africa and India.”
During CES, Walmart also announced another step in its goal to offering customers the ultimate convenience of getting items in as soon as 30 minutes by expanding drone delivery to 1.8 million additional households in the Dallas Fort-Worth metroplex – 75% of the area. Of the 120,000 items in a Supercenter, 75% meet the size and weight requirements for drone delivery.
At the end of the CES keynote, McMillon re-appeared on stage to wrap up the company’s vision for 2024.
"Today, we focus a lot on the technology that's powering adaptive retail, and we described the future of shopping," McMillon said. "But remember that this is a story about people who are learning and adapting to make that future real. We all have a choice, to choose a future that puts people first. If we keep doing that, we can help people around the world live a better life. That's what we want. That's the world we want to help create."
