Decking the aisles with data: How Walmart's AI-powered inventory system brightens the holidays

A customer wearing a black blouse and grey jacket pushing a shopping cart and admiring the Christmas tree decorations in the Christmas tree section at a Walmart store

Empowered by our artificial intelligence (AI)-and-machine learning (ML)-driven inventory management systems, Walmart is primed to deliver one of the most seamless and gratifying holiday shopping experiences for our customers. From sought-after gifts and festive decor to delectable treats, our customers and members can be confident in finding the perfect items to make their holiday season merry and bright.

Our AI-powered inventory management system is essential for supplying customers with what they need, when they need it, and at the low costs they expect from Walmart. By leveraging historical data and pairing it with predictive analytics, we’re able to strategically place holiday items across distribution and fulfillment centers, and stores, optimizing the entire shopping experience. This data management system, along with investments in our supply chain—including automated facilities, department-ready freight, Next-Gen fulfillment centers, and store-based fulfillment—combined with in-store technology used by our associates and our massive last-mile delivery network, also ensures the efficient delivery of items. Our system is more powerful because it integrates insights from all the channels we use to serve customers. As an omni-channel retailer, we analyze both physical and digital sales to deliver our customers with an easy shopping experience over the holidays and beyond.

Combining decades of customer service and holiday inventory management with AI insights

Walmart has helped customers and members celebrate the holidays for more than 60 years by continually advancing our inventory management processes to ensure customers can find everything from coveted gifts to festive treats. In recent years, we have tested and integrated AI/ML models into our systems, complementing our use of historical data to guide the flow of holiday items through our supply chain. Today, our AI/ML engines are  primed to offer even deeper insights and we expect our performance will be stronger than ever.

When building AI/ML frameworks for holidays, we start with a foundation of data and business constraints to create a possible universe of Machine Learning models. During model training, we fine-tune machine-learning models using historical data like past sales, as well as online searches and page views.

We also consider ‘future data’ such as macroweather patterns, macroeconomic trends and local demographics to anticipate demand and potential fulfillment disruptions. With this combined data, our engines identify and correct discrepancies, inefficiencies, or inaccuracies in supply chain models. By the time our customers are ready to shop, our AI/ML data has already completed the heavy lifting to improve inventory flow.

Inventory management depicted through a set of graphics overlayed on a picture of an aisle at a Sam’s Club store. The graphic shows the store layout and mentions the names of a few products.

Leveraging a patent-pending capability

While predicting consumer behavior is possible, unforeseen events and their impact on typical purchasing patterns can create added challenges.

However, we do not always want to apply anomalies like a once-in-a-lifetime snowstorm in Florida to our future inventory management process. Instead, our software aims to display demand as closely as possible to historical consumer tendencies and adjustments.

What makes our AI/ML engines so powerful is that they can ‘forget’ such anomalies so that we are not carrying over one-time deviations into future inventory management practices. This will be the first year this capability has been used to help deliver for our customers during the holiday season. 

AI is ‘always on’ and ready to distribute, supply and deliver

Whether customers are shopping in stores, online or using the app, Walmart is able to provide them with the holiday supplies they need, within their reach. Our inventory management systems connect to our 4,700 stores, fulfillment centers, distribution centers and our suppliers. Every interaction and step of the way is measured, captured and used to further train our AI models and machine learning engines.

Our AI-driven systems leverage a variety of factors to determine both quantity and timing of inventory flow, as well as more precisely identify where we distribute. With greater accuracy in our geographic distribution zones, we can understand our customers’ demands down to differentiations by zip codes. For customers enjoying at-home delivery, our systems are optimizing Spark delivery routes to save time from the moment of purchase to their front door.

With state-of-the-art learning systems, we are also adding inputs to help adjust for regional differences in needs, cultures, and buying habits. For example, we will always make sure that pool toys are available in the sunny states, and warmer sweaters are stocked in colder states. Our engines are always learning, so we can optimize, increase demand or reposition inventory to higher selling regions. For instance, if a toy isn’t selling well on the East Coast but is hot in the Midwest, we can reposition inventory or divert the demand. 

Empowering our associates with industry-leading analytics

At Walmart, we are people-led and tech-powered. While our AI-driven inventory systems can offer recommendations, the associate is ultimately in charge. Nobody, and no robot, can replicate the intuition of our associates gained over their careers. Our associates’ feedback is a critical part of the tuning and training process that drives our continued innovation.

As we embrace another holiday season, our associates nationwide have been working tirelessly to deliver exceptional holiday shopping experiences. With our powerful AI-driven inventory system, customers can rely on us to deliver great experiences and savings all season long.