Walmart CEO Doug McMillon and Microsoft CEO Satya Nadella walk out during the 2024 CES event on Tuesday, January 9, 2024 in Las Vegas, Nevada, USA. .
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Planning purchases for special occasions, such as the recent Super Bowl party or Valentine’s Day celebration, typically requires consulting multiple online sources, or even Google’s primary source. But that will change in the future if Walmart establishes its own method.
Walmart is talking about its ability to use generative AI as a one-stop shop for people to search for when they need to plan an event, rather than searching for individual products online. Walmart CEO Doug McMillon talked about the app’s Gen AI search feature during a post-earnings call with analysts in February.
“What we’re most excited about that’s already happening is that search has improved and generative AI has helped us actually improve the solution-oriented search experience for our customers and members.” Mr. McMillon said this at a financial results conference. “And it happened quickly.”
It also raises questions about the future use of search engines like Google.
walmart It long ago established itself as a major tech company and has successfully fended off years of uncertainty. Amazon And it remains a leader in the retail industry, with its stock currently trading at an all-time high. This technology story, which Forrester vice president and principal analyst Sucharita Kodali has been weaving ever since the company acquired his Jet.com, was written by former Amazon executive Mark Kodali. It was started by Mr. Lore. As a technology company, Walmart has to experiment a lot, but when adding generative AI search capabilities, the cost of failure is very low, he said.
“This allows them to establish themselves as innovators in this field,” Kodali said. “They’re better off being leaders than being followers in their position. They’re acting from a position of strength.”
However, experiments can fail. alphabet Recently, when the Gemini generation AI was brought to market before it was ready. Google co-founder Sergey Brin, who rarely appears in public and said the company had “failed” in its launch, dismissed concerns about the company’s prospects.
“We expect the business model to evolve over time,” Brin said. “And advertising will probably continue to be advertising, because advertising can work better and AI can tailor advertising better.… Personally, I think advertising will continue to be advertising. We feel that as long as significant value is being created, we will find a business model.”
AI and changes in search and shopping business models
Walmart isn’t the only company investing in this type of search in retail. AI-enabled Instacart “Ask Instacart” Rather than searching by item, you can search based on themes such as dinner or dates. Amazon’s AI shopping assistant Rufus allows users to have a conversation with the platform about what they need, rather than just searching for products directly. Powered by Shopify’s AI “Semantic search” Help sellers find the right products to sell to potential customers and make search results more accurate.
“This is going to become the norm for online retailers,” said Jacob Bourne, an analyst at Insider Intelligence. “What Google is concerned about is search in general, and the question this raises is: Will it translate into a 1,000 reduction for Google Search?” Vaughn said.
Kodali views threats from a non-existential perspective. In many ways, the world remains heavily dependent on Alphabet’s core search business, and the success of the retailer’s early generations of AI is unlikely to change that.
“You use Google for everything, so you get used to it,” Kodari said. “We use it for everything else[other than shopping]and everything else is like 90 percent of search. So unless Amazon and Walmart get into the business of the other 90 percent of search, That’s not what’s going to happen. “
Alphabet continues to invest heavily in Gemini and other retail ecosystems, including Google Cloud’s Vertex AI Search for Retail and conversational commerce tools that allow businesses to deploy virtual AI-powered customer service. We also continue to invest heavily in more specific AI tools to embed ourselves within. Agent on your website or app. Customers of Google Cloud AI products include Victoria’s Secret, Macy’s Ikea, Lowe’s, Rainbow Shops, and more.
Alphabet cites more than 35 billion product listings on Google from retailers around the world, and unique AI-powered tools that make finding the right product easy. A spokesperson said: “People shop on Google more than a billion times a day. We’re improving the shopping journey across Google and equipping retailers with generative AI tools to create great experiences for their customers. We are investing in providing services to
Traditional search engines are in a period of change. They suggest thousands of results based on a prompt and people have to sort through them to find the correct answer. With content creation at an all-time high, there’s more information out there than ever before, and not all of it is accurate or relevant. Advertising, especially in search products, is also the main way companies like Google make money.
Instead of researching what to buy on a search engine like Google and then heading to a retailer’s website for those items, the retailer’s generated AI finds specific answers and narrows down your choices to a few. , which can save people time and at the same time allow businesses to own the product. Deliver an experience and build loyalty directly, rather than appearing at the top of search results.
A Walmart spokesperson told CNBC: “Creating a great customer and member experience is our top priority, and Gen AI-powered search makes online shopping even more intuitive and convenient.” Told. “A single query for themed parties provides relevant recommendations across categories, eliminating the need to search for each item individually. This saves a lot of time and creates a more positive experience. It leads to.”
At the very least, this is something Google should be concerned about, said Stefano Puntoni, a marketing professor at the Wharton School and co-director of an executive education course on generative AI and business transformation. “Perhaps if a retailer has a powerful generative AI engine on its platform, customers won’t feel the need to use his Google at all,” Puntoni said. “Maybe you can find out what you need directly on a retailer’s platform.”
This also gives companies the opportunity to offer more products.Brands like L’Oréal are using AIo Let people try on makeup virtually, can show shoppers products they may not have had on the market. In theory, digital celebrities could sell to customers through AI-powered personalized customer conversations instead of pre-programmed chatbots.
“The role of generative AI search is to democratize and create opportunities for brands and businesses,” said Elaf Horwitz, executive vice president and head of applied innovation at McCann Worldgroup. This means that we will be able to do so.”
Alphabet also owns many of the brands people rely on every day and valuable advertising real estate that delivers more relevant results than ever before.
“Tech companies continue to experiment with new features every day,” Horwitz said. “Google is openly talking about it. The SEO and SEM model will change. But perhaps he’s also generating more searches and recommendations in his other Google products like Gmail, Google Drive, Google Photos, YouTube, etc.” I think we’ll start to see a lot more.”
