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Walmart’s AI Push Drives Google Cloud Deeper Into Its Organization

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Most companies talk about digital transformation in poetic terms, but getting there can be a difficult, complicated affair. That’s why some brands and retailers invest major resources in building up tools and data intelligence, while others latch onto tech partners like Google Cloud, or some mixture of both.

The latest to sign on the dotted line is Walmart Inc., in a new Google Cloud partnership revealed Tuesday at its virtual Next ’21 conference.

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“This is the first time we’re publicly speaking about our partnership with Walmart. And what they’re doing is what a lot of retailers are doing — focusing on using the cloud and AI and ML to build out new customer experiences, optimize business performance and modernizing the technology below that,” Carrie Tharp, vice president of retail and consumer for Google Cloud, told WWD.

“What’s interesting is, they’re focused on using analytics at scale and into actionable things that can change the customer’s experience.”

The goals amount to tentpoles of an execution plan formulated by Suresh Kumar, Walmart’s global chief technology officer and chief development officer. With that, Walmart has effectively positioned Google’s cloud division more deeply at the center of its most critical initiatives.

“Each of these three priorities are individually important, but when you bring them together at the scale of a business like Walmart, it has a massive impact,” Kumar said during Tuesday’s announcement. “If you move at speed, you can completely transform global operations and disrupt entire industries.”

One of the main propositions of Google’s cloud business lies in artificial intelligence, machine learning and other data-driven services that are tailored for sectors like retail. A gem in that crown is a tool called BigQuery, an enterprise data warehouse that manages and analyzes partner data using ML, geospatial analysis and business intelligence.

Walmart runs its most data-intensive, critical “decisioning” processes on BigQuery, so it can act on practical insights and make its operation more efficient. Its digital rivalry with mega e-tailer Amazon makes the initiatives fundamentally important, and so far, it has seen concrete results.

According to Kumar, BigQuery has had a direct impact on the business, allowing Walmart to “integrate with pretty much any data visualization tool and analytics tool that’s out there, thereby improving our processing time by 23 percent and of course, needless to say, a much better user experience.”

Across the whole operation, Google’s cloud has facilitated the retail behemoth’s ability to apply AI — from back-end issues like predicting demand, managing in-stock levels and optimizing the supply chain, to freeing up associates to better serve customers.

Walmart can close its financial books in three days instead of five days — which is a big deal, Kumar added — and the use of AI in its two-hour Express Delivery service enables multiple algorithms to work together to optimize routes and determine if the customer is eligible for Express Delivery.

That’s just for starters.

So far, the retailer has migrated the majority of its data tables, as much as 90 percent, to the cloud, and it has migrated 30 percent of the big data. It plans to nearly double that by the end of the fiscal year.

It’s also building its “own AI and ML capabilities to power multiple areas of our business, including classification, natural language processing, forecasting, computer vision, predictions, process automations and a whole lot more,” Kumar teased.

The effort itself is more efficient than the alternative. What Tharp often sees are stores attempting to string solutions together piecemeal, instead of adopting a more holistic platform that can look at and understand the entirety of the business.

That’s particularly important during the pandemic. With services like “buy online, pick up in-store” or curbside pickup spiking, local searches for in-stock information shot up 800 percent. A system that’s only targeted toward recommendations or marketing but overlooks real-time inventory has a hard time optimizing for that sort of scenario.

For the upcoming holiday season, 64 percent of U.S. shoppers said they planned to shop both online and in-store, according to Google data.

“That’s what it’s really going to take to win the holiday. And that’s where we see the Walmarts and other retailers of the world doubling down,” Google Cloud’s Tharp explained. “They’re using a whole bunch of things, computer vision, natural-language-processing kind of predictions into the customer experiences.”

For Google, the latest Walmart deal greatly expands its retail domain.

The tech giant has been on a charm offensive, appealing to retailers with the promise of heightened AI powers. Its efforts accelerated during the pandemic, as e-commerce exploded and intelligence-fueled features and services went from prospective or even ancillary to essential.

According to Tharp, Google Cloud’s client list now ranges from smaller upstarts like The Yes to major established brands and retailers like Macy’s, Sephora and many more, including its recent partnership with LVMH Moët Hennessy Louis Viitton. On Tuesday, the list grew to include fast-food chain Wendy’s, food brand General Mills, Walmart and others.

Naturally, they hope to see the sorts of gains other Google Cloud partners have clocked.

When Macy’s used Google Cloud’s Retail Search, the department store saw a 2 percent jump in conversion and a 1.3 percent uptick in revenue per visit. Ikea’s adoption of the Recommendations AI tool led to a more than 30 percent boost in click-throughs and more than 2 percent gain in average order value. Likewise, the recommendations service gave Sephora a 50 percent increase in click-throughs on product pages and an almost 2 percent increase in overall conversion rate on its homepage.

Of course, the conference announcements went far beyond retail partnership news. The cloud division also introduced a bevy of new tools and other integrations, including Vertex AI Workbench, which aims to help users build and deploy machine learning models faster, and the general availability of BigQuery Omni, a tool that facilitates cross-cloud analytics with data from Amazon Web Services and Microsoft Azure, among other announcements.

Ultimately, Google is pushing to extend the reach of its cloud and the services it provides, and it’s promising partners like Walmart and others that it can modernize their operations with AI tools that are faster, more comprehensive and easier to deploy.