Walmart's new AI predicts grocery substitutes for shoppers

The tech considers hundreds of variables in real time

Big-box retailer Walmart is using artificial intelligence (AI) to aid customers and personal shoppers and better handle still-surging online demand for groceries amidst the COVID-19 pandemic.

In a blog post Thursday, Srini Venkatesan, Walmart's global tech executive vice president, noted that as Americans increasingly turned to the internet to shop for essentials, stores like Walmart were presented with a "unique challenge."

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The alternate shopping method combined with the volume of in-store shoppers – especially in the months of March and April – resulted in popular items quickly selling out.

Last July, Walmart corporate affairs said the company had hired more than 400,000 new associates to mitigate the sudden "customer rush on essentials as lockdowns spread across the U.S."

"Walmart’s solution was to use artificial intelligence to help both customers and Personal Shoppers choose the best substitute for an out-of-stock item," said Venkatesan.

An illustrated video included in the blog post shows a Walmart personal shopper who needs to make a substitution for an online order.

Deciding what's closest to the item they had initially selected is a complex and "highly personal" process, Venkatesan said, with nearly 100 different factors into making that decision. 

In addition, he said that wrong choices can negatively impact customer satisfaction and increase costs and that manual processes are difficult and time-consuming.

The "technology solution" to this problem uses "deep learning AI" to consider the hundreds of variables in real time, including size, type, brand, price, aggregate shopper data, individual customer preference and current inventory.

Shoppers wait in line to pay for their purchases at a Walmart store in Los Angeles on Nov. 24, 2009, a few days before Black Friday, the day after Thanksgiving, which kicks off the holiday shopping season. (ROBYN BECK/AFP via Getty Images)

The next step is to ask the customer for approval of the substituted item, which Venkatesan said is an "important signal" fed back into learning algorithms to better the accuracy of future recommendations. 

Additionally, the use of AI is aimed at making Walmart associates' jobs easier and the tech shows where each item is located in the store to decrease time spent on an order.

Venkatesan said that as Walmart updates and enhances the AI, customers are responding positively and the system is "learning and getting smarter" based on data.

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WMT WALMART, INC. 142.34 -0.26 -0.18%
AMZN AMAZON.COM, INC. 3,334.37 +6.78 +0.20%

"Our goal is never to be out of stock and never to have substitutions. But, when it happens, the technology we’ve built helps ensure customers get the next best thing," he concluded.

Walmart offers more than 150,000 different grocery-related products, according to Tech Crunch.

Around 220 million customers and members visit approximately 10,500 stores and clubs in 24 countries and e-commerce websites, according to Walmart's website.

In March, its corporate office announced it would drop the $35 minimum order requirement for Express delivery.

In a release detailing the move, the company said it had 170,000 trained personal shoppers in its arsenal and that Express delivery is currently offered in nearly 3,000 stores, reaching nearly 70% of the U.S. population.

Earlier this month, Walmart Global Tech unveiled the Me@Walmart app for its U.S. store associates and announced it would distribute a new Samsung Galaxy XCover Pro smartphone, case and protection plan to more than 740,000 associates.

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Amazon Inc. – a top competitor – is reportedly on Walmart's heels, and analysts at JPMorgan projected the Jeff Bezos-founded e-commerce giant "should surpass" Walmart as the largest U.S. retailer as soon as next year.