Walmart is entering the drone, AI, and technology races. It won’t be simple, though, to fulfill the promise of a high-tech retail future in a market where others have failed.
For the first time, the bigbox retailer included Microsoft CEO Satya Nadella in addition to CEO Doug McMillon and a slew of other executives in a keynote address at the Consumer Electronics Show in Las Vegas.
Throughout the hour-long presentation, the main message was that customers would find shopping at Sam’s Club and Walmart to be more faster and more convenient.
The biggest consumer technology conference of the year, CES also doubles as a big sales event where businesses showcase their newest products in an attempt to draw in investors and buyers, frequently before they begin to use them in production.
Consequently, the theme of this year’s meeting was artificial intelligence.
The fundamental idea is that people should serve technology, not the other way around. People can accomplish tasks more effectively and enjoyably by taking this route, according to McMillon.
For now, Walmart is embracing the AI trend. The business claimed to be integrating it into every aspect of its operations, including its supply chain, app, drone delivery, and Sam’s Club purchasing.
delivery by drone
Walmart is all-in on the Dallas-Fort Worth Area in 2024, despite having previously made 20,000 drone deliveries in the previous two years. The superstore revealed that it will be providing drone delivery for up to 1.8 million homes, or up to 75% of the population in the Dallas area.
However, the idea of drone delivery is not new, and Walmart’s Dallas launch window is unusually short.
Amazon founder Jeff Bezos disclosed delivery drones on “60 Minutes” than a decade ago, but the technology has long faced regulatory, technological and financial challenges for tech corporations.
Even while businesses like UPS and Volkswagen were first enthusiastic about utilizing drones for their supply chains, obstacles have persisted and hindered the delivery of technology to both tiny startups and major shops like Amazon or drugstore chains.
There’s a lot of money on the line: According to a Fortune Business Insights analysis, by 2029, the commercial drone market is expected to grow to around $47.4 billion.
But first, businesses have to deal with rules, skeptical customers, and the real safe return of their technology.
Commercial drone deliveries are governed by the Federal Aviation Administration, and they must adhere to strict guidelines.
For instance, last year CNBC reported that the FAA mandated that, following approval for testing, Amazon’s Prime Air complete hundreds of hours of incident-free flight and submit data to the agency before to a wider rollout.
Walmart has plans that are just as ambitious. Thirty towns and municipalities are part of its delivery expansion, which the company claims will lead the retail sector.
According to the corporation, drone deliveries take anywhere from 10 to 30 minutes. According to Walmart US’s senior vice president of innovation and automation Prathibha Rajashekhar, over 75% of the 120,000 items in the superstore fit the weight and size specifications for a drone delivery.
By the end of 2024, Amazon’s Prime Air plans to extend drone delivery to a third US state in addition to Italy and the UK.
A news statement states that Walmart is collaborating with drone firms Wing and Zipline.
New exit technology for clients
One of the most universal experiences of Sam’s Club shopping — showing your receipt before leaving the store — will soon be no more.
Using AI and computer vision technology, the new exit tech builds on its established “Scan & Go” feature on Sam’s Club’s app. In Scan & Go, customers scan their items on the mobile app as they go through the store and pay on the app, bypassing the checkout line.
Walmart didn’t specify how AI would be used, but said it would be “working in the background to continually speed the process.”
A similar idea was introduced by Amazon in 2016 with its Go shops, whose checkout-free approach was heralded as the way of the future for retail. However, eight of its 29 cashier-free locations had closed by March 2023—another indication of the tech giant’s cost-cutting measures from the previous year.
At the exit, technology uses photographs of carts to instantly verify that every thing has been paid for. Currently, the technology is being tested in ten Sam’s Club locations, but by the end of the year, the firm hopes to roll it out across all of its sites.
Artificial Intelligence
Walmart said that it is rethinking its use of generative AI through a cooperation with Microsoft. The technology that powers ChatGPT and related tools, known as generative artificial intelligence, is the newest fad in technology, but its usefulness is still unknown.
The company stated it was leveraging AI to improve its current app and InHome service, but it made no announcements about any new projects.
Customers of Apple who have the most recent version of the app can now search with GenAi at Walmart as of Tuesday.
According to the firm, clients who need to purchase for a Super Bowl party typically look for products individually on the Walmart app. Instead, they can use GenAi search to search for “football watch party” and find every necessary item.
Additionally, Walmart disclosed improvements to its InHome program, which began in 2019 and delivers goods directly to customers’ refrigerators.
When Walmart staff enter customers’ houses, they wear cameras so the customers may observe the procedure in real time. Customers are required to utilize either an InHome smart lock, an existing smart lock, or a garage keypad.
The program has had a few glitches.
With regard to its internal Spark delivery networks, which it stated in June 2023 function in all 50 states, Walmart already uses a network of independent contract drivers. Drivers for Spark were questioned by Business Insider, and they stated that consumers would ask them to carry the things inside the house when they were delivered for InHome delivery.
AI is used by InHome’s new replenishment technology to predict orders and demands. According to the firm, their “algorithm learns what customers regularly purchase, how much of these items they purchase, and how frequently they purchase those items.”
Rival in-garage delivery offered by Amazon Key is only available to Prime subscribers and works with specific smart garages. The service has a one- to two-day delivery window and costs $1.99 each order.