Why Walmart’s rapid success with next-generation AI search should worry Google | Wilnesh News

Planning a purchase for a special occasion (like the recent Super Bowl party or a Valentine’s Day celebration) can often involve consulting multiple online sources (or Google’s main source), but if Walmart has its way, that could change in the future .

Walmart is touting its ability to use generative artificial intelligence as a one-stop shop for searching stores when it needs to plan an event, rather than scouring the web for single-item destinations. In a conference call with analysts following its February earnings report, Walmart CEO Doug McMillon talked about the gen AI search capabilities in its app.

“What we’re most excited about is the way search is improving and the way generative AI is helping us really improve the solutions-driven search experience for our customers and members,” McMillon said on the earnings call. “And it’s happening brilliantly. soon.”

It also raises questions about the future use of search engines like Google.

Walmart Established itself as a major tech player long ago, successfully shrugged off years of angst Amazon And it remains a leader in retail, with its stock price currently at an all-time high. Sucharita Kodali, vice president and principal analyst at Forrester, pointed out that the company has been telling technology stories since acquiring Jet.com, founded by former Amazon executive Marc Lore. As a technology company, Walmart has to experiment a lot, and with the addition of generative AI search capabilities, the cost of failure is very low, she said.

“This makes them innovators in the field,” Kodali said. “From their perspective, they are better suited to be leaders than followers. They operate from a position of strength.”

Experiments can go wrong, though, as they did letter Most recently, it brought Gemini gen AI to market before it was ready. In a rare public appearance, Google co-founder Sergey Brin said the company “messed up” with the launch, but he dismissed concerns about the company’s prospects.

“I expect the business model will evolve over time,” Brin said. “Maybe it will still be advertising because advertising can work better and artificial intelligence can tailor it better… I personally think that as long as there is huge value generated, we will figure out the business model.”

Artificial intelligence and changes in search and shopping business models

Walmart is not alone in investing in such searches in retail. Artificial Intelligence Powered by Instacart “Ask Instacart” Allow customers to search based on themes like dinner or date night rather than by item. Amazon’s artificial intelligence shopping assistant, Rufus, lets people talk to the platform to understand what they need, rather than just looking for direct items. Shopify’s AI power “Semantic Search” Help sellers find the right products to sell to potential customers, ensuring their search results are more accurate.

“We’re going to see this become the norm for online retailers,” said Insider Intelligence analyst Jacob Bourne. “Google is anxious about search as a whole, which begs the question is will Google search die by a thousand cuts?” Bourne En said.

Kodali sees threats from a less existential perspective. The world still relies heavily on Alphabet’s core search business for many things, and some of the retailer’s early AI successes won’t change that.

“You get into the habit of using Google because you use it for everything,” Kodali said. “You use it for everything else (besides shopping) and everything else is like 90% of the searches you do. So unless Amazon and Walmart are going to get into the other 90% of the search business, it’s not going to occur.”

Alphabet continues to invest heavily in Gemini, as well as more specific AI tools that are embedded into other retail ecosystems, such as Google Cloud’s Vertex AI for retail search, and conversational commerce tools that allow companies to provide virtual AI-driven customer service agents in their on the website and app. Customers of Google Cloud AI products include Victoria’s Secret, Macy’s, IKEA, Lowe’s and Rainbow Shops.

Alphabet notes that there are more than 35 billion product listings from global retailers on Google, and its own artificial intelligence tools make it easy to find the right product. “People shop on Google more than 1 billion times every day, and we invest in improving the shopping experience on Google and providing retailers with generative artificial intelligence tools to create great experiences for customers,” a spokesperson said.

Traditional search engines need to change. They come up with thousands of results based on the prompts, which people have to sort through to find the correct answer. With content production at an all-time high, there is more information than ever before, but not all of it is accurate or appropriate. Advertising, especially on search products, is also the primary way companies like Google make money.

Instead of researching what to buy on search engines like Google and then going to the retailer’s website to purchase those items, a retailer’s generative AI can find specific answers and narrow them down to a few options, saving people time while also Allowing companies to own the experience and build immediate loyalty without having to appear at the top of search results.

“Creating a great customer and member experience is our top priority, and AI-powered search makes online shopping more intuitive and convenient,” a Walmart spokesperson told CNBC. “A single query for a themed party can provide relevant results across Category recommendations, thereby replacing the need to search for each item individually. This saves a lot of time, resulting in a more positive experience.”

Wharton marketing professor Stefano Puntoni said this is something Google should at least pay attention to. He is also Co-Academic Director of the Executive Education Program on Generative Artificial Intelligence and Business Transformation. “Maybe when retailers have powerful generative AI engines on their platforms, customers won’t need to use Google at all,” Pontoni said. “Maybe they’ll be able to figure out what they need directly on the retailer’s platform.”

This also gives the company the opportunity to recommend more products.Brands like L’Oréal are using artificial intelligence technologyo Let people try on makeup virtually, which can show shoppers items they might not be in the market for. In theory, digital celebrities could sell products to customers through personalized conversations powered by artificial intelligence, rather than through pre-programmed chatbots.

“What generative AI search does is provide brands and companies with a wealth of opportunities that they can now create,” said Elav Horwitz, executive vice president and head of applied innovation at McCann Worldgroup.

Alphabet also owns many brands that people rely on every day, and a lot of valuable advertising space, and the results will be more relevant than ever.

“Tech companies are constantly experimenting with new features every day,” Horwitz said. “Google is talking about this publicly. SEO and SEM models will change. But I think we may see a lot of generated searches or recommendations in other Google products such as Gmail, Google Drive, Google Photos and YouTube. ”