Walmart uses artificial intelligence for online grocery substitutions

Walmart uses artificial intelligence (AI) to make sure customers get what they love from online grocery orders.

Srini Venkatesan, Executive Vice President of Walmart Global Tech, said in a blog post yesterday that the company developed AI-based technology to help its personal buyers and customers make smarter substitutions for out-of-stock products.

The solution is designed to help identify the next best item for a customer if the product they originally ordered is not in stock, Venkatesan said. Deep learning AI takes into account hundreds of variables – size, type, brand, price, aggregate buyer data, individual preferences, and current inventory, among others – in real time to determine the best next available item. Then, customers are asked to approve or reject the substituted item. The decision is fed back into the learning algorithms to improve the accuracy of future recommendations.

“The decision to replace is complex and very personal for each client. If the wrong choice is made, it can negatively impact customer satisfaction and increase costs. In the past, our personal shoppers followed a manual process to determine the best way to handle a substitution. But there are almost 100 different factors that can go into this decision. Trying to take all of this into account would not only be too difficult, but it would also take a tremendous amount of time, ”explained Venkatesan. “To ensure a substitution that will result in a satisfied customer, our team created a technology solution to help identify the next best item for customers if an item they selected is out of stock. “

Walmart

Walmart’s solution identifies the next best item for customers if the product they originally ordered is not in stock.

Venkatesan illustrated the complexity of online order substitutions with an example: a personal shopper looking for cherry yogurt for an online grocery order but, once it got to the yogurt aisle, the cherry yogurt was gone.

“You see strawberry, raspberry and blueberry yogurt. Does the customer want any of these options? Maybe another flavor, like vanilla? Fat free? Skip the yogurt all together? ” he said. “How can a personal shopper decide what is the best option for a customer they may never have met? “

Situations like this really presented a challenge last year, when the COVID-19 pandemic sparked a boom in consumer demand for food and groceries. Venkatesan noted that the sudden increase in in-store shoppers and online volume has resulted in some popular items selling quickly.

“The solution is also designed to facilitate the work of our employees. Instead of having to guess, the personal shopper can be told precisely what the customer might prefer, ”he said. “If our personal shoppers are preparing orders and come across an item that is not available, our system offers the alternative product. Our technology even shows our personal shopper where the item is in the store, simplifying the decision-making process for our team and allowing them to prepare orders quickly and efficiently.

Since deploying the AI ​​solution, customer acceptance of online grocery substitutions has climbed by more than 95%, Venkatesan reported.

“We continue to iterate and improve this technology, and our customers are responding positively,” he added. “The best part is, throughout the process, the system learns and becomes smarter based on customer feedback and actions. Our goal is to never run out of stock and never have substitutions. But, when that happens, the technology we’ve developed helps ensure that customers get the right thing to do. “

This ability in the grocery store will be critical for Walmart in its e-commerce battle with online retail giant Amazon. According to Austin, Texas-based Jungle Scout, which provides an e-commerce platform for selling on Amazon, 51% of consumers shopping at Walmart.com in the first quarter purchased groceries, up from 23. % for Amazon. The percentage of first-quarter grocery purchases for Amazon was down from 31% in the fourth quarter of 2020.

In addition, in the second quarter of 2021, 25% of consumers plan to shop at Walmart stores and 20% at Walmart.com, compared to 17% for Amazon and 12% for other online retailers, according to the Jungle study. Scout. In the past three months, 54% of consumers shopped in-store at Walmart, followed by 30% at Target. Online, 71% of them shopped on Amazon during this time, compared to 39% on Walmart.com.

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