Case Study: How Walmart is Leading the AI Transformation in Retail

As one of the world's largest retailers, Walmart is advancing the adoption of artificial intelligence (AI) and generative AI (GenAI) at an unprecedented pace, aiming to revolutionize every facet of its operations—from customer experience to supply chain management and employee services. This retail titan is not only optimizing store operations for efficiency but is also rapidly emerging as a “technology-powered retailer,” setting new benchmarks for the commercial application of AI.

From Traditional Retail to AI-Driven Transformation

Walmart’s AI journey begins with a fundamental redefinition of the customer experience. In the past, shoppers had to locate products in sprawling stores, queue at checkout counters, and navigate after-sales service independently. Today, with the help of the AI assistant Sparky, customers can interact using voice, images, or text to receive personalized recommendations, price comparisons, and review summaries—and even reorder items with a single click.

Behind the scenes, store associates use the Ask Sam voice assistant to quickly locate products, check stock levels, and retrieve promotion details—drastically reducing reliance on manual searches and personal experience. Walmart reports that this tool has significantly enhanced frontline productivity and accelerated onboarding for new employees.

AI Embedded Across the Enterprise

Beyond customer-facing applications, Walmart is deeply embedding AI across internal operations. The intelligent assistant Wally, designed for merchandisers and purchasing teams, automates sales analysis and inventory forecasting, empowering more scientific replenishment and pricing decisions.

In supply chain management, AI is used to optimize delivery routes, predict overstock risks, reduce food waste, and even enable drone-based logistics. According to Walmart, more than 150,000 drone deliveries have already been completed across various cities, significantly enhancing last-mile delivery capabilities.

Key Implementations

Name	Type	Function Overview
Sparky	Customer Assistant	GenAI-powered recommendations, repurchase alerts, review summarization, multimodal input
Wally	Merchant Assistant	Product analytics, inventory forecasting, category management
Ask Sam	Employee Assistant	Voice-based product search, price checks, in-store navigation
GenAI Search	Customer Tool	Semantic search and review summarization for improved conversion
AI Chatbot	Customer Support	Handles standardized issues such as order tracking and returns
AI Interview Coach	HR Tool	Enhances fairness and efficiency in recruitment
Loss Prevention System	Security Tech	RFID and AI-enabled camera surveillance for anomaly detection
Drone Delivery System	Logistics Innovation	Over 150,000 deliveries completed; expansion ongoing

From Models to Real-World Applications: Walmart’s AI Strategy

Walmart’s AI strategy is anchored by four core pillars:

1. Domain-Specific Large Language Models (LLMs): Walmart has developed its own retail-specific LLM, Wallaby, to enhance product understanding and user behavior prediction.

2. Agentic AI Architecture: Autonomous agents automate tasks such as customer inquiries, order tracking, and inventory validation.

3. Global Scalability: From inception, Walmart's AI capabilities are designed for global deployment, enabling “train once, deploy everywhere.”

4. Data-Driven Personalization: Leveraging behavioral and transactional data from hundreds of millions of users, Walmart delivers deeply personalized services at scale.

Challenges and Ethical Considerations

Despite notable success, Walmart faces critical challenges in its AI rollout:

• Data Accuracy and Bias Mitigation: Preventing algorithmic bias and distorted predictions, especially in sensitive areas like recruitment and pricing.

• User Adoption: Encouraging customers and employees to trust and embrace AI as a routine decision-making tool.

• Risks of Over-Automation: While Agentic AI boosts efficiency, excessive automation risks diminishing human oversight, necessitating clear human-AI collaboration boundaries.

• Emerging Competitive Threats: AI shopping assistants like OpenAI’s “Operator” could bypass traditional retail channels, altering customer purchase pathways.

The Future: Entering the Era of AI Collaboration

Looking ahead, Walmart plans to launch personalized AI shopping agents that can be trained by users to understand their preferences and automate replenishment orders. Simultaneously, the company is exploring agent-to-agent retail protocols, enabling machine-to-machine negotiation and transaction execution. This form of interaction could fundamentally reshape supply chains and marketing strategies.

Marketing is also evolving—from traditional visual merchandising to data-driven, precision exposure strategies. The future of retail may no longer rely on the allure of in-store lighting and advertising, but on the AI-powered recommendation chains displayed on customers’ screens.

Walmart’s AI transformation exhibits three critical characteristics that serve as reference for other industries:

• End-to-End Integration of AI (Front-to-Back AI)

• Deep Fine-Tuning of Foundation Models with Retail-Specific Knowledge

• Proactive Shaping of an AI-Native Retail Ecosystem

This case study provides a tangible, systematic reference for enterprises in retail, manufacturing, logistics, and beyond, offering practical insights into deploying GenAI, constructing intelligent agents, and undertaking organizational transformation.

Walmart also plans to roll out assistants like Sparky to Canada and Mexico, testing the cross-regional adaptability of its AI capabilities in preparation for global expansion.

While enterprise GenAI applications represent a forward-looking investment, 92% of effective use cases still emerge from ground-level operations. This underscores the need for flexible strategies that align top-down design with bottom-up innovation. Notably, the case lacks a detailed discussion on data governance frameworks, which may impact implementation fidelity. A dynamic assessment mechanism is recommended, aligning technological maturity with organizational readiness through a structured matrix—ensuring a clear and measurable path to value realization.

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Generative AI as "Cyber Teammate": Deep Insights into a New Paradigm of Team Collaboration

Case Overview and Thematic Innovation

This case study is based on The Cybernetic Teammate: A Field Experiment on Generative AI Reshaping Teamwork and Expertise, exploring the multifaceted impact of generative AI on team collaboration, knowledge sharing, and emotional experience in corporate new product development processes. The study, involving 776 professionals from Procter & Gamble, employed a 2x2 randomized controlled experiment, categorizing participants based on individual vs. team work and AI integration vs. non-integration. The findings reveal that individuals utilizing GPT-4 series generative AI performed at or above the level of traditional two-person teams while demonstrating notable advantages in innovation output, cross-disciplinary knowledge integration, and emotional motivation.

Key thematic innovations include:

• Disrupting Traditional Team Models: AI is evolving from a mere assistive tool to a "cyber teammate," gradually replacing certain collaborative functions in real-world work scenarios.
• Cross-Disciplinary Knowledge Integration: Generative AI effectively bridges professional silos between business and technology, research and marketing, enabling non-specialists to produce high-quality solutions that blend technical and commercial considerations.
• Emotional Motivation and Social Support: Beyond providing information and decision-making assistance, AI enhances emotional well-being through human-like interactions, increasing job satisfaction and team cohesion.

Application Scenarios and Impact Analysis

1. Application Scenarios

• New Product Development and Innovation: In consumer goods companies like Procter & Gamble, new product development heavily relies on cross-department collaboration. The experiment demonstrated AI’s potential in ideation, evaluation, and optimization of product solutions within real business challenges.
• Cross-Functional Collaboration: Traditionally, business and R&D experts often experience communication gaps due to differing focal points. The introduction of generative AI helped reconcile these differences, fostering well-balanced and comprehensive solutions.
• Employee Skill Enhancement and Rapid Response: With just an hour of AI training, participants quickly mastered AI tool usage, achieving faster task completion—saving 12% to 16% of work time compared to traditional teams.

2. Impact and Effectiveness

• Performance Enhancement: Data indicates that individuals using AI alone achieved high-quality output comparable to traditional teams, with a performance improvement of 0.37 standard deviations. AI-assisted teams performed slightly better, suggesting AI can effectively replicate team synergy in the short term.
• Innovation Output: The introduction of AI significantly improved solution innovation and comprehensiveness. Notably, AI-assisted teams had a 9.2-percentage-point higher probability of producing top-tier solutions (top 10%) than non-AI teams, highlighting AI's unique ability to inspire breakthrough thinking.
• Emotional and Social Experience: AI users reported increased excitement, energy, and satisfaction while experiencing reduced anxiety and frustration, further validating AI’s positive impact on psychological motivation and emotional support.

Insights and Strategic Implications for Intelligent Applications

1. Reshaping Team Composition and Organizational Structures

• The Emerging "Cyber Teammate" Model: Generative AI is transitioning from a traditional productivity tool to an actual team member. Companies can leverage AI to streamline and optimize team configurations, enhancing resource allocation and collaboration efficiency.
• Catalyst for Cross-Departmental Integration: AI fosters deep interaction and knowledge sharing across diverse backgrounds, helping dismantle organizational silos. Businesses should consider AI-driven cross-functional work models to unlock internal potential.

2. Enhancing Decision-Making and Innovation Capacity

• Intelligent Decision Support: Generative AI provides real-time feedback and multi-perspective analysis on complex issues, enabling employees to develop more comprehensive solutions efficiently, improving decision accuracy and innovation outcomes.
• Training and Skill Transformation: As AI becomes integral to workplace operations, organizations must intensify training on AI tools and cognitive adaptation, equipping employees to thrive in AI-augmented work environments and drive organizational capability transformation.

3. Future Development and Strategic Roadmap

• Deepening AI-Human Synergy: While current findings primarily reflect short-term effects, long-term impacts will become increasingly evident as user proficiency grows and AI capabilities evolve. Future research and practice should explore AI's role in sustained collaboration, professional growth, and corporate culture shaping.
• Building Emotional Connection and Trust: Effective AI adoption extends beyond efficiency gains to fostering employee trust and emotional attachment. By designing more human-centric and interactive AI systems, businesses can cultivate a work environment that is both highly productive and emotionally fulfilling.

Conclusion

This case provides valuable empirical insights into corporate AI applications, demonstrating AI’s pivotal role in enhancing efficiency, fostering cross-department collaboration, and improving employee emotional experience. As technology advances and workforce skills evolve, generative AI will become a key driver of corporate digital transformation and optimized team collaboration. Companies shaping future work models must not only focus on AI-driven efficiency gains but also prioritize human-AI collaboration dynamics, emphasizing emotional and trust-building aspects to achieve a truly intelligent and digitally transformed workplace.

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Insights and Solutions for Analyzing and Classifying Large-Scale Data Records (Tens of Thousands of Excel Entries) Using LLM and GenAI Tools

Traditional software tools are often unsuitable for complex, one-time, or infrequent tasks, making the development of intricate solutions impractical. For example, while Excel scripts or other tools can be used, they often require data insights that are only achievable through thorough analysis, leading to a disconnect that complicates the quick coding of scripts to accomplish the task.

As a result, using GenAI tools to analyze, classify, and label large datasets, followed by rapid modeling and analysis, becomes a highly effective choice.

In an experimental approach, we attempted to use GPT-4o to address this issue. The task needs to be broken down into multiple small steps to be completed progressively using a step-by-step strategy. When categorizing and analyzing data for modeling, it is advisable to break down complex tasks into simpler ones, gradually utilizing AI to assist in completing them.

The following solution and practice guide outlines a detailed process for effectively categorizing these data descriptions. Here are the specific steps and methods:

1. Preparation and Preliminary Processing

Export the Excel file as a CSV: Retain only the fields relevant to classification, such as serial number, name, description, display volume, click volume, and other foundational fields and data for modeling. Since large language models (LLMs) perform well with plain text and have limited context window lengths, retaining necessary information helps enhance processing efficiency.

If the data format and mapping meanings are unclear (e.g., if column names do not correspond to the intended meaning), manual data sorting is necessary to ensure the existence of a unique ID so that subsequent classification results can be correctly mapped.

2. Data Splitting

Split the large CSV file into multiple smaller files: Due to the context window limitations and the higher error probability with long texts, it is recommended to split large files into smaller ones for processing. AI can assist in writing a program to accomplish this task, with the number of records per file determined based on experimental outcomes.

3. Prompt Creation

Define classification and data structure: Predefine the parts classification and output data structure, for instance, using JSON format, making it easier for subsequent program parsing and processing.

Draft a prompt; AI can assist in generating classification, data structure definitions, and prompt examples. Users can input part descriptions and numbers and return classification results in JSON format.

4. Programmatically Calling LLM API

Write a program to call the API: If the user has programming skills, they can write a program to perform the following functions:

• Read and parse the contents of the small CSV files.
• Call the LLM API and pass in the optimized prompt with the parts list.
• Parse the API’s response to obtain the correlation between part IDs and classifications, and save it to a new CSV file.
• Process the loop: The program needs to process all split CSV files in a loop until classification and analysis are complete.

5. File Merging

Merge all classified CSV files: The final step is to merge all generated CSV files with classification results into a complete file and import it back into Excel.

Solution Constraints and Limitations

Based on the modeling objectives constrained by limitations, re-prompt the column data and descriptions of your data, and achieve the modeling analysis results by constructing prompts that meet the modeling goals.

Important Considerations:

• LLM Context Window Length: The LLM’s context window is limited, making it impossible to process large volumes of records at once, necessitating file splitting.
• Model Understanding Ability: Given that the task involves classifying complex and granular descriptions, the LLM may not accurately understand and categorize all information, requiring human-AI collaboration.
• Need for Human Intervention: While AI offers significant assistance, the final classification results still require manual review to ensure accuracy.

By breaking down complex tasks into multiple simple sub-tasks and collaborating between humans and AI, efficient classification can be achieved. This approach not only improves classification accuracy but also effectively leverages existing AI capabilities, avoiding potential errors that may arise from processing large volumes of data in one go.

The preprocessing, splitting of data, reasonable prompt design, and API call programs can all be implemented using AI chatbots like ChatGPT and Claude. Novices need to start with basic data processing in practice, gradually mastering prompt writing and API calling skills, and optimizing each step through experimentation.

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