Walmart is eyeing a shift in the way people plan for special events like Super Bowl gatherings or Valentine’s Day celebrations.
Instead of hopping between multiple online sources or relying solely on the ubiquitous Google search, the retail giant is striving to become the go-to destination for event planning with the help of generative AI.
During a post-earnings call with analysts in February, Walmart CEO Doug McMillon highlighted the strides made in search capabilities through generative AI within its app.
“The thing we’re most excited about that’s already happened is the way search has improved, and the way generative AI helped us improve a solution-oriented search experience for customers and members,” McMillon remarked, emphasizing the rapid progress achieved.
This development raises questions about the future role of search engines like Google. Walmart, having cemented its position as a formidable tech player, has continually evolved, notably since its acquisition of Jet.com, founded by former Amazon executive Marc Lore.
According to Sucharita Kodali, Vice President and Principal Analyst at Forrester, Walmart’s foray into technology necessitates experimentation, with the incorporation of generative AI search capabilities posing minimal risk.
“They’re better to be a leader than a follower in their shoes. They’re operating from a position of strength,” Kodali noted, underscoring Walmart’s innovative stance in the industry.
However, not all experiments yield the desired outcomes, as evidenced by Alphabet’s recent stumble with the premature launch of Gemini gen AI. Google co-founder Sergey Brin acknowledged the misstep, conceding that the company “messed up” the launch.
Nevertheless, he remained optimistic about evolving business models, particularly in advertising, where AI-driven tailoring could enhance effectiveness.
“I personally feel as long as there’s huge value being generated, we’ll figure out the business models,” Brin asserted, expressing confidence in Google’s adaptability despite setbacks.
The trend of integrating AI into search functionalities is not exclusive to Walmart within the retail sector. Other major players like Instacart and Amazon are also leveraging AI to enhance the shopping experience.
Instacart’s “Ask Instacart” feature utilizes AI to allow customers to search based on themes like dinner or date night rather than specific items. Similarly, Amazon’s AI shopping assistant, Rufus, enables users to engage in conversational searches rather than just seeking out individual products.
Meanwhile, Shopify’s “Semantic Search” employs AI to assist sellers in finding the most suitable items for potential customers, ensuring more accurate search results.
According to Jacob Bourne, an analyst at Insider Intelligence, this trend is poised to become standard practice among online retailers.
The rise of AI-powered search functionalities prompts questions about the future of Google’s dominance in the search arena. Bourne wonders if this shift represents a gradual erosion of Google’s search supremacy.
However, Sucharita Kodali views the threat to Google’s search dominance from a less existential perspective. While retailers are making strides with AI-driven search, Google remains deeply ingrained in daily online activities beyond shopping.
“You get in the habit of using Google because you use it for everything,” Kodali explains. “You use it for everything else (outside of shopping), and everything else is like 90 percent of the searches you do.”
“So, unless Amazon and Walmart are going to get into the business of the other 90 percent of the searches, it’s not going to happen,” he added.
Despite potential challenges, Alphabet continues to invest heavily in AI, including its Gemini platform and other specialized tools designed to integrate within various retail ecosystems.’
Google Cloud’s offerings, such as Vertex AI Search for retail and Conversational Commerce tools, enable companies to deploy virtual AI-powered customer service agents on their platforms.
Major brands like Victoria’s Secret, Macy’s, Ikea, Lowe’s, and Rainbow Shops have already embraced Google Cloud AI products, signaling a broader adoption of AI in the retail landscape.
Alphabet emphasizes its vast database of over 35 billion product listings from retailers worldwide on Google, backed by its AI-powered tools designed to streamline the search process.
A spokesperson stated, “People shop with Google more than a billion times a day, and we’re invested in improving shopping journeys across Google as well as giving retailers generative AI tools to create great experiences for their customers.”
Conventional search engines face impending transformation. While they provide thousands of results based on a query, the abundance of information available today can be overwhelming and not always accurate or relevant. Moreover, advertising, particularly on search platforms, remains a primary revenue source for companies like Google.
In contrast, retailers incorporating generative AI into their platforms offer a more personalized and efficient shopping experience. Instead of sifting through numerous search results, AI-driven algorithms can present specific answers, saving time for consumers and fostering direct loyalty to the retailer.
“A single query for a themed party can serve up relevant, cross-category recommendations, replacing the need for individual searches for each and every item,” stated a Walmart spokesperson, underscoring the time-saving benefits and enhanced user experience facilitated by gen AI-powered search.
Stefano Puntoni, professor of marketing at The Wharton School, suggests that retailers with robust generative AI engines may diminish consumers’ reliance on Google for shopping-related queries.
This shift presents an opportunity for retailers to engage customers directly and suggest additional products, leveraging AI to personalize recommendations and enhance the shopping journey.
Elav Horwitz, Executive Vice President and Head of Applied Innovation at McCann Worldgroup emphasizes the democratizing effect of generative AI search, enabling brands and companies to create personalized experiences for consumers.
Meanwhile, Alphabet’s extensive brand portfolio and advertising platforms position it to deliver highly relevant results amidst evolving search dynamics.
As technology companies continue to innovate, the landscape of search engine optimization and marketing strategies is poised to undergo significant changes.
Google’s exploration of new features, including generative search and recommendations, across its suite of products indicates a broader evolution in how users engage with digital platforms.
