Kathryn McRae, CEO of Walmart International, at the Fortune Innovation Forum in Hong Kong on March 27, 2024. Graham Youden of Fortune
For most people, AI first appeared in November 2022, when OpenAI released the buzzy AI-powered chatbot ChatGPT. This has spurred a rush to adopt generative AI. The CEO littered his earnings reports with references to new technology, and investors drove the stocks of his companies like Nvidia and Microsoft to record highs.
But in reality, businesses were thinking about and using AI long before ChatGPT. “AI has been the lifeblood of most organizations for the past 10 years,” Walmart International CEO Kathryn McRae said Wednesday at his Fortune Innovation Forum in Hong Kong.
“I’m excited about what next-generation AI will bring,” McLay said. “I don't think the game has just begun. We're in the third quarter.”
But Walmart International's CEO admitted that companies still don't know how to use AI. “People are struggling with how to figure out the best use cases for generative AI. They want generative AI to do 500 things,” she said.
Walmart is already thinking carefully about its customer data, using metrics such as Net Promoter Score (which measures how satisfied or dissatisfied customers are with their retail experience) and is used to build customer profiles and personalized experiences.
But Walmart doesn't just want to use AI to better predict customer preferences. McRae said his experience leading Sam's Club, Walmart's members-only warehouse club, inspired him to apply AI to help with tasks that people don't want to do, such as inventory management.
Mr. McRae became CEO of Walmart International last year after running Sam's Club for four years. She increased her division's revenue by 43% during her tenure. Before her stint at Walmart, McRae spent time at Qantas and Australian retailer Woolworths. The CEO position at Walmart International has traditionally been a stepping stone to becoming CEO of the entire company. Current CEO Doug McMillon served as CEO of Walmart International from 2009 to 2014.
Walmart International currently operates in 18 countries, and McRae cited Mexico, China and India as three growth markets that require different types of digital transformation.
For example, Walmart has installed kiosks in its stores in Mexico to assist customers who do not have access to the internet. By comparison, Walmart is investing in AI for its Indian operations, a result of the country being a digitally native market. The retail company has launched Flippi, a generative AI-powered shop assistant in India that can respond to customer questions with customized responses.
Finally, McRae said Walmart's operations in China are becoming more digital. More than 95% of Walmart's transactions in 2019 took place in-store. She noted that currently, her 48% of transactions are digital. This has forced Walmart to change the way it operates in the Chinese market.
Thanks to generative AI, “customers can expect a more enjoyable experience in retail,” McLay said. “We are just on the brink of that.”
Correction, March 27, 2024: An earlier version of this article incorrectly characterized the Net Promoter Score and misspelled Kathryn McRae's last name.
