Benefits of ICT Megatrends Implemented by Walmart Assessment Answer
The following report identifies and discusses benefits of the ICT megatrends being implemented by Walmart, a fortune 500 company. The identified trend involves new voice capabilities introduced by the Company for more convenience of the company customers.
Headquartered through Arkansas, Walmart (NYSE: WMT) is a well-known retail store chain. The Company was founded in 1962 by Sam Walton. The current CEO of the Company is Douglas McMilon (Yahoo Finance, 2020).
As of April, 2020, the company had around 11,500 stores operating in more than 25 countries with around 2.2 million employees around the world. It is one of the largest companies in the world. As of January, 2020, the company reported annual revenue of US$ 523.96 billion with a net income after tax of US$ 14.88 billion (Yahoo Finance, 2020).
Lines of Business
The Company has three main lines or segments of operation (Company Annual Report, 2020):
- Walmart U.S: This is the largest operational segment with respect to its contribution to revenue. As the name suggest, the segment includes all operations in the US across its 50 states, Washington DC and Puerto Rico. The segment includes mass merchandise of consumer products. As of 2020, the segment reported a revenue of US$ 341.0 billion.
- Walmart International: This is the second largest operational segment with respect to its contribution to revenue. As the name suggest, the segment includes all operations outside the US across more than 25 countries. The segment operates through wholly-owned and majority-owned subsidiaries. The formats include retail, wholesale and others. In turn, Walmart operates through superstores, hypermarkets, Sam’s Club named warehouse clubs, Asda, flipchart etc. As of 2020, the segment reported revenue of US$ 201.1 billion.
- Sam’s Club: This is the third operational segment with respect to its contribution to revenue. The segment includes operations in the US across 44 states and Puerto Rico. Sam’s club is a members-only warehouse club. As of 2020, the segment reported revenue of US$ 58.8 billion.
Newly Introduced Voice Capabilities
In April 2019, the Company’s Senior Vice President for Digital Operations, Tom Ward introduced ‘Walmart Voice Order’. The Company’s Grocery Pickup and Delivery options are particularly popular amongst the customers as they offer convenience. Hence, with an objective of providing further convenience to the customers, the Company introduced this feature called ‘Walmart Voice Order’ which allows customers to just speak the name of grocery item in order to add the item to Walmart cart. This can be done by using any device that supports Google Assistant (Walmart, 2019).
Further, the use of Artificial Intelligence lets the app see trend from past shopping and act accordingly. For example, if a customer has been buying a gallon of organic milk in the past, then the customer can just say ‘add milk’, and the app will automatically pick the same variety and brand of milk as in the past.
Hence, this provides a lot of convenience to the customers as they can add grocery items while being on the move or driving as they only need to speak, not search or type.
Use of Artificial Intelligence
Use of AI has become rampant and the technology is a megatrend not only for voice ordering but in other fields as well, such as, marketing, customer support, security and compliance, back-end processes etc. The field of AI is expected to be the next big thing almost with a certainty such that the services such as telesales calls, IVR systems are expected to be replaced by AI-based systems very soon.
The use of AI has multiple benefits such as (NASSCOM, 2018):
- More personalised response to customers
- More proactive response to customers at a lower cost
- More accurate output by reducing chances of human error
- Improving productivity by reducing TAT (turnaround time)
- Tracking and using consumer behaviour information to offer customised products
- Better fraud detection
- Better compliance with respect to regulations, legal framework and risk management
As the world becomes digitized and dependent on technology, the use of Artificial Intelligence has become widespread. Conversational AI refers to the process of automating communication so as to provide a personalised experience to the customer and also improve customer satisfaction. The communication being automated can be either text message based apps or speech-based apps.
Conversational AI assists by providing a human-like interaction through analysing speech and/or text, natural language understanding that involves intent extraction and entity extraction, providing service in multiple languages and accents, etc.
Hence, the overall objective is to provide a smoother experience to the customer while also providing a human-like experience. However, by reducing the use of human workforce, the experience becomes more proactive and less time consuming. It has also been noticed that customer satisfaction increases considerably (interactions, 2020).
The conversational AI technology employed by Walmart is speech-based conversational AI that assists by converting speech to text and search for the intent and entity based on customer’s voice. This involves analysis of speech, natural language understanding (for example, understanding the entity which was milk as understood through speech in above discussed example and intent extraction which was a gallon of organic milk as understood through sue of AI for tracking past customer behaviour. Further, the accents (and also languages) vary from region to region and the voice based ordering system will be able to recognize the same.
Chatbots versus Voicebots
The use of AI is not as new because many companies have already been using AI-enabled chatbots for a long time. As the name suggests, a chatbot uses texts as the medium of communication whereby a customer can chat with a company personnel or a computer which is AI-enabled. The AI will try to mimic a natural human conversation through text messages in order to attend the customer query.
The chatbots reduce the cost by reducing workforce and also provide better customer satisfaction. Apart from this, it is less time consuming as responses are prompt.
However, the chatbots are usually limited in nature and are able to attend to general queries with limited responses only. Hence, it needs to be assisted by human workforce as well as chatbot will be unable to answer all the questions. Due to limited training and response database, the chatbot can go in a loop by giving same response again and again and this can lead to frustration and anger in the customer (Akanksha, 2020).
On the other hand, a voicebot uses AI and also uses natural language understanding or NLU which provides a near-human experience to the user. It provides a much smoother experience which is more human and less robotic.
The AI is the future of technology as discussed above. The use of AI is increasing consistently across industries and sectors as discussed above. It has multiple benefits such as smoother and more human-like experience at lower cost as well as lower turnaround time. Further, it helps in creating customer behaviour related database that can be used to offer customised experiences and products. Further, voice-based AI also helps a company to cater to customers that speak and understand different languages as well as accent, thereby, providing a much simpler shopping experience to such customers.