Microsoft's Generative AI Brilliance Reshapes Retail

At CES 2024, where interesting partnerships between big tech companies were announced, Walmart and Microsoft’s strategic partnership to bring generative AI-powered search features on the retail giant’s platform was unveiled. 

The new features are said to enhance the digital shopping experience on the platform, something every major retail giant is increasingly looking to adopt. In the process, also allow big tech companies to win in a big way. 

Microsoft : The Solid Pillar of Walmart

Doug McMillon and Satya Nadella at CES 2024. Source: CES

Walmart CEO and President Doug McMillon invited Microsoft’s CEO Satya Nadella onstage at the CES event to not only talk about their new AI-enabled features but also their long-standing commitment that started in 2018. 

Six years ago, the retail giant tied up with Microsoft to make it as its preferred and strategic cloud provider. The cloud innovation projects comprised AI and ML-based data-platform solutions, and they were designed to address customer-facing services and internal business applications. 

With increasing sales through ecommerce platforms, Walmart has also been witnessing the same. In Q3 2023, Walmart’s US online sales grew 24% and global online sales grew 15%. 

Net Sales of Walmart E-commerce. Source: Statista

Microsoft Loves All Retail

Microsoft has not only partnered with Walmart but a number of retail companies to bring advanced tech capabilities to their systems. In 2018, Microsoft announced its partnership with British retail company Marks and Spencer (M&S) to test out AI capabilities in a retail environment. 

A number of consumer goods companies have partnered with Microsoft to provide innovative retail solutions. Companies such as Unilever, Coca-Cola Bottling Company, Nestle, Pepsico and many others already have a strategic collaboration with these brands. Last year, Carrefour announced their partnership with Microsoft and OpenAI to bring an AI-powered chatbot to allow a smoother customer experience. 

Retail is the second biggest industry, (after technology) that utilises Microsoft’s suite of cloud-based business applications called Dynamics 365. With ChatGPT integration increasingly going up in retail companies, for mostly building personalised chatbots, Microsoft’s Azure OpenAI service finds its dominance. 

Amazon : The Tough Challenger

With the renewed collaboration of Microsoft and Walmart to use Azure OpenAI Service, on top of proprietary data from Walmart, the newly built AI-powered features are said to enhance the search experience to provide a more personalised experience on Walmart’s platform : a feature that Amazon has already mastered. 

Amazon’s advanced features on its marketplace platform not only works towards enhancing customer experience but also improves seller experience. Retailers use Amazon Personalise to analyse customer data, purchase history, market trends and preferences for personalised product recommendations. 

With generative AI capabilities, advanced customisation is achieved, which enhances the search experience, which is also Amazon’s USP. According to a consumer report of last year, online shoppers first start their search on Amazon. Over 50% of online shoppers use Amazon as their search destination. 39% consumers use search engines such as Google and Bing, closely followed by Walmart with 34% of online shoppers. 

In addition to being the supreme king of e-commerce retail, the company’s cloud service has been implemented by a number of retail companies. AWS offers technology solutions that aid companies to help with their customer data to boost engagement, supply chain distribution and other retail functions.  

Big Tech’s Retail Efforts Continue 

While Microsoft, Amazon are established players working with retail, new partnerships with tech companies are also emerging. Recently, IBM and SAP have collaborated to build AI solutions for the consumer packaged goods and retail sector. The solution looks to help these companies with operational and logistics such as product distribution, transportation planning, automating order settlements and more. 

With the promising adoption of big tech products in retail industries, the prowess of tech giants allows them to establish dominance in the sector. Offering solutions in the form of office products, analytics, operational assistance, and many more features, Microsoft is comfortably positioned to lead in the retail sector.