Inside Walmart Canada’s tech transformation
A floor cleaning robot glides along the perfectly polished floor of Walmart Canada’s recently renovated flagship store at Square One Shopping Centre in Mississauga, Ont.
With smooth precision, it makes its way past a bank of 12 self-checkout terminals, just over from the Walmart Health hub — the retailer’s first in Canada — and an interactive concierge that helps customers schedule pharmacy and optical appointments, among other tasks. And not far from there is a digital wayfinder that helps customers navigate the 223,000-sq.-ft. Store.
On the lower level, within the expanded grocery department and as part of a pilot, LCD screens run the length of a shelf in the cracker aisle displaying price tags, videos and customer reviews pulled from Walmart’s e-commerce site. Technology is at work at what the retailer is calling its “store of the future.”
Behind the scenes, Walmart has opened high-tech fulfilment centres in Alberta and British Columbia, a tech hub in Toronto and, currently, the retail giant is piloting material handling robotics and automation technologies at its distribution centre in Calgary.
Walmart Canada has been steadily investing in technology. In 2020, the company announced a five-year plan and investment of $3.5 billion in store renovations and enhancements, as well as improvements to its fulfilment network for a faster and more convenient in-store and online shopping experience. (It’s focused on building technology that benefits its associates as well.)
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“When we prioritize investments, we are looking for improving the overall omni-shopping experience for customers and that has continued to be our focus since the pandemic,” Walmart Canada’s chief technology officer Michon Williams tells Canadian Grocer.
“Obviously, automation and optimization of our supply chain is important, but that is because we want to offer lots of flexibility and the ability for customers to shop in the way that’s convenient for them. Whether that’s in store or online or a little bit of both,” she adds.
We chatted with Williams about technology and its impact on the in-store experience, front-line staff, e-commerce, automation, artificial intelligence (AI) and more. This interview has been edited for clarity and length.
How is Walmart bringing digital convenience to the brick-and-mortar experience?
Well, there are a lot of things happening, which includes how we’re enabling the customer to shop better in our stores. Obviously, the pandemic has changed the way people are shopping — it has accelerated a lot of the things we were looking to do, but we had to go very fast. So, we implemented a lot of capabilities to enable associates to serve customers better. And right now, we’re focusing on integrating and improving the overall experiences that associates have with those technologies. We have launched a super app called Me@Walmart that enables associates to look at things like fresh metrics —allowing store associates to have access to sales, waste management and inventory details in our produce, meat, deli and bakery departments—access their schedules and other tools.
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A lot of different tools have evolved such as VizPick, which helps associates with stocking shelves. Using a device with a camera, they can scan food products like cereal in the back room and it flags which products should be brought up to the front — it provides a visual indicator. We’re integrating that app this coming year into the Me@Walmart experience so associates can access all the tools they need to create an amazing shopping experience for customers on one device. Checkout is also a big focus area for us. This year, we’ll be upgrading all our assisted lane checkouts to include more capabilitie and to make it a lot more usable for associates to check out customers. So, it’s all about providing options to customers about how they check out.
How are these apps helping front-line staff be more efficient and responsive to customer needs?
I think what’s amazing generally about technology is the quick and easy access to information. So, folks can access huddle notes and get all the updates about what’s happening in their store and more broadly in the organization on their device through Me@Walmart. And being able to access all the tools that they need in one place makes it a lot easier and more intuitive for associates to complete their day-to-day tasks in the store.
Some believe the increased adoption of in-store tech has resulted in a lack of customer service. How is Walmart working to ensure this doesn’t happen?
Our major strategy is to be people-led and tech-powered. Tech should be here to support the associates and their interactions with customers. In fact, a lot of the technology we’re introducing makes it easier for associates to engage with customers — providing direction, providing recommendations, enabling them to look up items to help folks find what they need. For instance, we’re focused on increasing our assortment of global foods, which requires us to change our stock in stores more frequently, featuring different items up at the front to support different cultural holidays. The tech helps associates set up the modulars more quickly so they can spend more time engaging with customers, including helping with wayfinding or product questions. Tech is secondary to the interactions we’re trying to create in the store. And I think it’s important folks know that as we’ve introduced technology, the next phase is continuing to improve the associate experience so they can improve the customer experience.
We know COVID-19 and the lockdowns served as an accelerator for online grocery shopping. What are the drivers today?
Convenience and speed. We’re focused on improving our perfect order score, so making sure our substitutions are minimized — we feed intelligence about any substitutions back into the model to provide smarter recommendations. Obviously, the pandemic required us to go fast and turn on these capabilities and now we’re in a place that we’re trying to optimize for the customer experience. That has required us to think so differently about our space in the stores. During the early phases of the pandemic, we had to corner off areas of the store to enable us to do picking and bins. There’s all kinds of interesting stuff with respect to how grocery orders are picked. We provide visual indicators to enable associates to put the right products into the right bins as a shortcut. So, bins are the key mechanism for us organizing, storing and making sure all the order makes it to the customer or the driver. Now, we’re looking at providing more specific location information on the bins, which makes it easier for associates to fulfil orders and to optimize the space for the grocery order service in each store.
We have a few areas of exciting innovation we’ve done to support that space challenge and enable associates to fulfil grocery orders as well as optimize the in-store shopping experience. One of the things we’ve done is vertical staging, which enables us to store bins on top of each other to maximize space and make it easier to dispense the orders. And in one store, we’ve introduced automation called Goods-to-Person, which moves product to the associate to pick the order out versus the store associate going and picking all the items through the store. This is more ergonomically friendly and, in certain areas of the city where there is denser demand, it enables us to fulfil our customer promise and to do more orders per minute than we could otherwise. So, it’s about space management, it’s about helping the ergonomics and the ease of the order management process for associates, and it’s about leveraging automations to help us with the space and speed challenge, particularly in high-density areas.
You mentioned substitutions, which is a challenge grocers face when it comes to e-commerce. How is Walmart leveraging technology to solve this?
We know how we handle substitutions is important to customers. That’s why if an item becomes unavailable, we do our best to provide customers with a similar item at no additional charge. During checkout, customers can let us know which item they’d prefer if the original item is unavailable, or they can choose to opt out of substitutions. Technology plays a big role in how we continue to improve the substitutions experience. We currently employ machine learning solutions to recommend appropriate substitutes. Incorporating text embeddings and generative AI will further optimize our recommendations to provide the best possible substitutions for our customers.
How would you say Walmart is using technology to create a competitive edge when it comes to buying groceries online?
Oh, there are so many things. One that I’m quite excited about is how we’re using machine learning to reduce waste. So, I mentioned about the fresh metrics — having associates with the latest information about the freshness of produce is very important and we have analytics and models that help us with those metrics. But, this year, we will be piloting a machine learning intelligence waste management solution that will help us identify any places where we have over replenishment or reasons for returns. And that will help us flow through with decisions about how we manage products in terms of the next steps. Now, you might not necessarily think, ‘oh, I can see how that helps us with competitive advantage,’ but it does help us with overall satisfaction with the products that folks are buying and it helps keep our costs down significantly by reducing waste so we can continue to offer everyday low prices. And we know folks are particularly cost-sensitive during these times of inflation so, it is very important we use intelligence to manage our supply chain and our capabilities.
How is AI changing Walmart’s business?
I don’t think artificial intelligence is going to change the nature of our business. I think it’s going to help us do things we already know how to do more efficiently. We view artificial intelligence as a tool to help us reduce the reliance on manual, menial tasks and to help people get to answers faster. Let me give you some examples. We’ve just rolled out our internal ChatGPT tool, which is enriched with contextual information for Canada. This enables people to do summaries of policies and procedures, makes it easier to write emails and helps them to communicate more effectively. So, this is an aid. I’m excited about using these types of tools to provide better recommendations to customers. So, for example, if you have a grocery shop and you’ve purchased a bunch of things, in the future, generative AI can make recommendations about, ‘Hey, consider this recipe given all the things you have in your basket.’ I think it’s a really exciting capability for us to unlock. I don’t see it as changing our business. I see it as augmenting what we are already doing and enabling us to shift more to customer service and a little less on some of the manual or menial operational tasks that can be very time-consuming [for associates].
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And you see this tool evolving over time?
Absolutely. In the very early days of the internet, folks were getting used to how to search. We are still in very early stages of how to use prompts and how to use generative AI to help us in our ongoing tasks and to make sure it’s serving up the information that is going to be most useful. We’re getting our information ready, our policies, our procedures, our ways of working, so eventually tools like this can be leveraged by store associates for any questions they may have in running the store or the supply chain.
Walmart is piloting autonomous mobile robots at a distribution centre in Calgary as part of a plan to modernize the supply chain. What benefits do these robots bring to the organization and to Walmart’s grocery business, specifically?
Well, there are so many benefits to robots. Obviously, within the supply chain, there can be a lot of activities that can be straining or take a lot of time because you have to move around in the distribution centre. What autonomous robots enable us to do in both the fulfilment and in other more traditional distribution centres is bring products to the associate versus the associate moving products throughout the supply chain. This is safer, it is faster and it is more precise to move products around in the centres.
When you look at all the applications and technology that Walmart is launching around the world, what’s on your wish list for Canada?
One of the ones I’m most excited about considering in the future for Canada is augmenting our search experience with prompts. I have three young children and I have to throw a lot of birthday parties. And search right now is very smart and evolving, but if you search for a birthday party you might get birthday party themed things. But, with AI, if you can ask it, ‘Help me plan my four-year old’s strawberry birthday party,’ it might be able to suggest much more intelligent recommendations, including cakes and decorations and toys and balloons as well. I think that would be an exciting way to enhance the customer’s shopping experience and make it easier for them to find all the things they need.
This article first appeared in Canadian Grocer’s May 2024 issue.
