Here's why Walmart is betting on Microsoft's AI to challenge Amazon in online and physical retail

Gunnar Rathbun/AP Images for Walmart

Walmart plans to use Microsoft's AI technology to improve customer experience in stores and online.

• Walmart will partner 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 currently has in-store robots in 50 of its stores that scan shelves for missing items and items to restock, and Walmart plans to use artificial intelligence to improve these robots.
• Walmart is currently 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," said Fiona Tan, SVP of Customer Technology and AI at Walmart, at a Microsoft event held this week.

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

Of note is that 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 that Walmart considered multiple options for AI technology, but it went with Azure because of Microsoft's established 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 can provide the most relevant recommendations to its customers on its site and improve customer experience, said Tan. It also wants to use AI to help scale its online grocery program and predict what groceries customers want to order.

With AI, Walmart can also figure out the best models to price an item, especially seasonal items, Lin 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 goes up and down the aisles to scan the shelves. When people misplace items and put them on the wrong shelves, this robot can identify it and send associates to put the item back in the right place.

While the robot is counting items on the shelves and making sure they're in stock, the human associates can focus on helping customers. Meanwhile, the robot can figure out what items to replenish.

"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 currently in beta.

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

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