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Here's why Walmart is betting on Microsoft's AI to challenge Amazon in online and physical retail (WMT, MSFT)


Walmart employees

  • Walmart is partnering with Microsoft to use artificial-intelligence technology for the retail giant's e-commerce site, price adjustments, and expanding its online grocery program.
  • Walmart also uses robots in 50 of its stores to scan shelves for missing items; it plans to use artificial intelligence to improve these robots.
  • Walmart is experimenting with voice commerce to be used on voice assistants like the Google Home, and it believes its partnership with Microsoft will help this take off.

Walmart and Microsoft have shared more details on their plans to team up and take on their mutual rivals at Amazon.

"We want to be the world's most trusted retailer," Fiona Tan, the senior vice president of customer technology and artificial intelligence at Walmart, said at a Microsoft event held this week.

At the event, Tan discussed how a Microsoft-Walmart engineering team would migrate the retailer's internal business applications to the Microsoft Azure cloud. She also announced plans to use Microsoft's AI technology in ways meant to improve online and in-store shopping.

Walmart fiercely competes with Amazon for dominance in the retail sector, while Microsoft Azure is generally seen as the greatest rival to the market-leading Amazon Web Services cloud.

Tan said Walmart considered multiple options for AI technology but chose Azure because of Microsoft's track record in the field of AI.

"They had a good amount of research," Tan said. "We've always had a good strong partnership with Microsoft. They have a lot of good tools. It's a good fit."

Walmart plans to use Microsoft's AI technology to help with product search and recommendations on its recently revamped website. That tech could help Walmart provide more relevant recommendations to its customers on its site and improve customer experience, Tan said. It also wants to use AI to help scale its online grocery program and predict which groceries customers want to order.

With AI, Walmart can also figure out the best models to price an item, especially seasonal items, Tan said. Throughout the year, prices vary by location and availability, but AI can create models that predict these changes.

It's not just about pricing and online shopping though. Walmart plans to use Microsoft tech to improve one of its must futuristic initiatives: a robot that moves up and down the aisles to scan the shelves. The robot can recognize when people misplace items and alert associates to put the items on the right shelf.

With the robot also counting items on the shelves and making sure they're in stock, the human associates can focus on helping customers.

"Our associates can spend more time doing what they like to do, which is to sell products," Tan said. "These are the kinds of things to allow them to have time to interact with our customers."

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Walmart is also looking into voice commerce, which can be used in conjunction with assistants like the Google Home, Tan says. For example, a customer can tell a voice assistant to add milk to a shopping cart. This is in beta.

The robot is already being used in about 50 Walmart stores across the US, and Walmart plans to leverage Microsoft's AI technology to improve these bots.

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