Walmart is betting big on new technology. But can it offer what others haven't?

New York
CNN
—

Walmart is joining the AI, drone and technology race. But fulfilling the promise of a high-tech shopping future — where its competitors have failed — won't be easy.

Big retailer A keynote was held at the Consumer Electronics Show in Las Vegas for the first time, with the participation of CEO Doug McMillon, a large number of executives, and even Microsoft CEO Satya Nadella.

My overarching pitch during the hour-long presentation was this: Consumers will have a faster, more convenient shopping time at Walmart and Sam's Club.

CES is the biggest consumer technology conference of the year — but it's also a major sales conference, where companies make flashy presentations to attract both investors and customers, often before effectively implementing new technology.

In this sense, this year's conference was, of course, all about artificial intelligence.

“The basic 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,” McMillon said.

Walmart is jumping on the AI ​​trend right now. The company said it is implementing it in everything from its supply chain to its app, along with developments and even drone delivery and shopping at Sam's Club.

It's important to note that Walmart has not yet rolled out its plans nationally. Many of its ads are currently in select markets, though the company has said it plans to roll them out this year.

Walmart has already delivered 20,000 drones in the past two years, but in 2024 it will move to the Dallas-Fort Worth area. The supermarket announced that it is offering drone delivery to up to 75% of the Dallas area's population, or about 1.8 million homes.

But drone delivery as a concept isn't new, and Walmart's timeline for launching in Dallas is remarkably short.

Amazon founder Jeff Bezos unveiled delivery drones on “60 Minutes” nearly a decade ago, but the technology has long faced regulatory, technical and financial problems for tech companies.

While companies from UPS to Volkswagen initially started out optimistic about using drones for their commercial supply chains, obstacles have remained and hindered the delivery of the technology to both small startups and large retailers like Amazon or drugstore chains.

The money at stake is big: A Fortune Business Insights report estimated that the commercial drone market will swell to nearly $47.4 billion by 2029.

However, first, companies must navigate regulation, consumer skepticism, and the actual safe return of their technology.

The Federal Aviation Administration regulates commercial drone deliveries, and has high standards to meet.

For example, CNBC reported last year that the FAA required Amazon's Prime Air to complete hundreds of flight hours without incident and submit data to the agency before rolling it out more widely, and that was after it cleared the test.

Walmart has similarly ambitious plans. Its delivery expansion includes 30 cities and municipalities, which the retailer says will lead the retail industry.

The company said drone deliveries take between 10 and 30 minutes. About 75% of the 120,000 items in the supermarket meet size and weight requirements for drone delivery, Prathibha Rajashekar, senior vice president of innovation and automation at Walmart US, said during the presentation.

Amazon's Prime Air said it wants to expand drone deliveries to Italy and the UK by the end of 2024, as well as a third US state.

Walmart is partnering with drone companies Wing and Zipline, according to a press release.

One of the most universal experiences of shopping at Sam's Club — showing your receipt before leaving the store — will soon be gone.

Using artificial intelligence and computer vision technology, the new checkout technology is based on the “Scan & Go” feature found in the Sam's Club app. At Scan & Go, customers scan their items on the mobile app as they pass through the store and pay via the app, bypassing the checkout line.

Walmart did not specify how the AI ​​would be used, but said it would work “in the background to continually speed up the process.”

Amazon launched a similar concept in 2016 with Go Stores in 2016, and its free payment system has been hailed as the future of shopping. But by March 2023, it had closed eight of its 29 cashier-free stores, another sign of the tech giant's cost-cutting efforts in the past year.

Technology in the take out Photos of carts and payment verification for all products in real time. It's currently running as a pilot program at 10 Sam's Club locations, but the company plans to expand the technology to all of its locations by the end of the year.

By partnering with Microsoft, Walmart said it is revamping its generative use of artificial intelligence. Generative AI — the technology that powers ChatGPT and similar tools — is the latest buzzword in technology, but its practical applications remain untested.

The company did not announce any new projects, but said it is using artificial intelligence to build on its existing app and InHome service.

Walmart launched the GenAi search experience for Apple customers on Tuesday who have the latest version of the app.

Customers who need to shop for a Super Bowl party typically search for items in the Walmart app individually, the company said. Using GenAi search, they can instead search for “football watching party” and shop all the related items they need in the search.

Walmart also announced advancements to its InHome service, which debuted in 2019 to deliver groceries directly to customers' refrigerators.

Walmart employees wear a camera when they enter Clients' homes, allowing the client to watch the process live. Customers must use an existing smart lock, garage keypad, or InHome smart lock.

The program encountered some pitfalls

Walmart already uses a network of independent contract drivers on its in-house Spark delivery platforms, which Walmart said in June 2023 operates in all 50 states. Business Insider interviewed Spark drivers, who said customers would be confused about the InHome delivery process, asking drivers to bring products inside the home.

InHome's new replenishment tool uses artificial intelligence to anticipate needs and requests. “Its algorithms learn what customers regularly buy, how much of those items they buy, and the frequency of those purchases,” the company said.

Amazon Key has a competing in-garage delivery service, which is exclusive to Prime members, and is compatible with some smart garages. The service costs $1.99 per order for a delivery time of 1-2 days.

Walmart's InHome service currently costs $19.95 per month or $138 per year.