October 30, 2025 • 35 mins
A single chat that fills your cart, schedules pickup, and optimizes delivery isn’t sci-fi anymore. We break down Walmart’s new partnership with OpenAI and show how turning conversation into checkout could reshape margins, loyalty, and the last mile—without asking shoppers to open an app.
We start with what the integration actually does: ChatGPT pulls live Walmart prices, builds context-aware baskets, and enables instant checkout for delivery or store pickup. Then we zoom out to strategy. For Walmart, this is an offensive move to capture the first seconds of purchase intent and convert store traffic into digital margin. For OpenAI, it’s a path to become the quiet backbone of commerce, earning at scale while learning from real, high-signal transactions. Along the way, we explore competitive responses from Amazon, Google, and Meta, plus why pharmacy + grocery + general merchandise in one cart is a powerful differentiator.
The heart of the story is operations. EDLP and EDLC gain strength when chat-driven orders provide early, precise demand signals. Forecasting shifts from stores to households; bullwhip shrinks; routes get fuller; and next-day reliability expands without surge pricing. We dive into restock autopilot, substitution logic when prices move, and the likely adoption curve across busy omnichannel shoppers, small business members at Sam’s Club, and marketplace sellers hungry for discovery. We also examine Walmart Connect’s evolution from reactive ads to conversational recommendations, and the integrity guardrails needed to keep trust intact.
If you care about retail strategy, supply chain resiliency, and how AI changes the shape of demand, this conversation connects the dots with concrete examples and numbers. Subscribe for more deep dives, share this episode with a colleague who loves logistics, and leave a review to tell us how you see AI reshaping your weekly shop.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:08):
Hi, I'm Matt Waller, and this is the first episode of
Supply Chain Unlocked.
And today we're going to dosomething very unusual.
We're going to talk about thenew announcement of the
partnership between OpenAI andWalmart.
(00:28):
And my guest today is Grok.
And Grok is an AI tool, and I'mgoing to be interviewing Grok
about this partnership betweenOpenAI, which owns ChatGPT and
Walmart.
Grok, are you ready to uh jointhe podcast recording?
SPEAKER_01 (00:54):
Ready, Matt.
Let's dive in.
SPEAKER_00 (00:57):
Okay.
Grok, first of all, why don'tyou describe the partnership as
it's been announced betweenWalmart and OpenAI.
SPEAKER_01 (01:11):
From what Walmart just said, they're letting folks
shop right in ChatGPT, nojumping apps, with instant
checkout.
You chat about tacos orblenders, it pulls Walmart
prices, suggests stuff based onwhat you've bought before, and
lets you buy it on the spot,delivery next day or in-store
pickup.
Sam's Club gets in too for mealplanning and restocks.
(01:33):
It's all proactive, DougMcMillan calls it.
Like the AI guess is what youneed before you do.
Sound right?
SPEAKER_00 (01:41):
Yeah, that's right.
And um, you know, Walmart is apeople-led, tech-powered,
omnichannel retailer helpingpeople save money and live
better.
And so this fits in with theomnichannel and tech-powered
part of their purpose.
(02:01):
My question for you, Grok, isexplain from a business strategy
perspective why Walmart wouldwant to do this.
SPEAKER_01 (02:13):
Walmart isn't running scared of Amazon.
This is classic aggressive play.
They're already seeing 10%traffic growth in stores alone.
So instead of reacting, they'reusing Chat GPT to flip every
Walmart shopper into an onlineshopper, too.
It's margin, Matt.
E-commerce makes twice what apickup does.
And by owning the first 10seconds of someone saying, I
(02:35):
need groceries, they steal thattime from Google, from Siri,
from even walking in.
Short version, not defense.
They're turning foot trafficinto an API, making Walmart the
launch pad for every impulse.
SPEAKER_00 (02:50):
Great.
And so from a business strategyfor OpenAI, what is their uh
approach?
What's their strategy?
And what's the benefit to them?
SPEAKER_01 (03:02):
For OpenAI, it's about becoming the quiet
backbone of every app thatsells.
They're not chasing ad dollarslike Google.
Instead, they slice off a tinyrevenue share every time
Walmart's instant checkoutpings, or next when Target or
CVS plugs in.
Think Walmart pays nothingupfront, just feeds data back.
So Grok, sorry, ChatGPT, getssmarter on real bags, not fake
(03:27):
queries.
Benefit?
Massive scale without burningbillions on servers alone.
Plus proof their tech printscash.
Makes investors drool.
Keeps the Sam Altman hype alive.
Offensive, yeah, like owning thebrain while Walmart owns the
shelves.
SPEAKER_00 (03:44):
I like that little um uh humor you brought in by
saying grok.
Um but here okay, here's my nextquestion.
How do you think the open AIcompetitors will react to this?
SPEAKER_01 (04:03):
They'll panic in the nicest way possible.
Google, they'll push harder onGemini, maybe make Walmart
prices a voice answer on pixelphones tomorrow.
Amazon won't like this at all.
So Rufus gets a booster shot.
Maybe they quietly license fromAnthropic and undercut the
speed.
Meanwhile, Meta's Llama turnsinto your Instagram shopping
(04:24):
coach overnight.
The real twist?
Every retailer under the sun nowraces to say, hey, put me in
ChatGPT too.
In six months, half the productsin the app will come from
Walmart, Amazon, and 17 otherlogos.
Winner isn't one company, it'sthe customer, because price
checking becomes lazy.
SPEAKER_00 (04:46):
So give us an example of how someone would be
using Chat GPT and then purchasefrom uh Walmart.
SPEAKER_01 (04:58):
Sure, like this.
User says, hey ChatGPT, I'm outof paper towels and also craving
tacos.
Fix me.
It replies, Bounty 12 pack,$9.97in stock.
For tacos, ground beef, shells,mild salsa, you skipped spicy
last time.
Total$23, ships tomorrow, orfree pickup in 20 minutes.
(05:22):
I hit yes, boom, Walmart accountcharged, receipt pops up, done.
It's shopping without the guiltof ads.
SPEAKER_00 (05:33):
And um and now let's talk about this a little bit
from a omnichannel perspective.
Um from Walmart's perspective,this is another way shoppers can
buy.
So from a marketing perspective,how does that help Walmart?
(05:55):
And does it pose any potentialrisks to them?
SPEAKER_01 (06:02):
Marketing-wise, it turns Hey Walmart into a reflex,
like Alexa, but smarter.
You never have to open the app.
The purchase just happens.
That cuts friction, so even lazyshoppers buy more.
And since your data already saysyou've shopped the store last
week, the bot can nudge.
Pick up at Bentonville fasterthan delivery.
(06:23):
Boom, you save time, Walmartsaves last mile bucks.
Risk?
Yeah.
If ChatGPT steers you to Targetbecause they're cheaper, you're
cooked.
But Walmart's already whisperingdeals in the background.
Hey, use our card, it's freeshipping.
So as long as the price botplays fair, they win.
And honestly, if they don't,that's when supply chain
(06:44):
unlocked becomes, oops, unlockthe wrong door.
SPEAKER_00 (06:49):
You know, Walmart has a competitive advantage in
transportation, physicaldistribution, inventory
management, and logistics andsupply chain in general.
How does this advantage play outin this sort of competition
(07:11):
we're talking about here?
SPEAKER_01 (07:15):
That's where they shine, actually.
See, Amazon wins by being fastbecause they own planes.
Walmart wins by being fastbecause they own 24-7
distribution centers and a truckfleet that runs like clockwork.
So when ChatGPT says, this'llarrive tomorrow, Walmart already
knows your zip's covered.
No surge pricing, no surprisefees.
(07:37):
Competitors promise one day, butif you're rural, they re-rent
through UPS.
Walmart, straight off theinterstate.
Their edge isn't the AI, Matt.
It's that the AI is talking to asupply chain that doesn't
flinch.
And once you're hooked on freenext day, who cares where you
clicked?
SPEAKER_00 (07:56):
So I would also like to talk about EDLP.
EDLP stands for Everyday LowPrice.
And Walmart created it really in1973.
Jack Schumacher was theexecutive that was a champion
behind this.
And there have been times inhistory when Walmart's almost
(08:18):
backed away from it a littlebit.
But uh it has been one of theirmost important strategies
because for one thing, shopperscan um be sure that they're
getting a good price.
They don't have to look forspecial deals.
They just go in and they canfill their cart, um, use their
(08:39):
shopping list and and uh and bedone with it, not necessarily
look for some something that'sbeing discounted.
Uh and then Walmart also hassomething called everyday low
cost.
So everyday low price actuallyhelps everyday low cost because
when you have ADLP, you haveless bull whip in the supply
(09:01):
chain.
So you wind up with more uhefficient transportation, fewer
stockouts, less inventoryrequired, et cetera, et cetera,
that results in everyday lowcost.
And everyday low cost helpsself-perpetuate everyday low
price.
And so my question is um asWalmart opens a new channel,
(09:24):
really, um, for shoppers uh tobuy through ChatGPT, it's one
other uh way of shopping.
A certain percentage of thosenew shoppers will be existing
Walmart shoppers, but a certainpercentage will be people that
really weren't Walmart shoppers,but because they can buy it this
(09:46):
way through ChatGPT, they'llprobably do that.
And that should make Walmarteven more efficient.
Um but I have no idea whatpercentage of the new customers
what percentage will be newcustomers and what percentage
will be um existing customers.
(10:07):
Do you have any ideas aboutthat?
SPEAKER_01 (10:13):
No hard numbers yet.
Walmart's not spilling that, butearly traffic tells a story.
Chat GPT referrals are already20% of their online clicks, and
most folks linking accounts arerepeat Walmart buyers, based on
how the bot uses your oldhistory to nudge.
Still, OpenAI says newbies arepouring in too.
Like 15-20% of test users whoweren't Walmart online at all.
(10:37):
Just curious what the fridge AIsuggests.
If that's real, your efficiencyboost holds.
Same EDLP discipline, but nowthe supply chain smooths out
faster, because even casualsstart trusting the bot for
staples.
Think less chaos, morepredictable parts.
Want me to guess?
I'd say for launch year 6040,existing to new.
(11:00):
But hey, if they hit 100% new,that's when Schumacher spins in
his grave laughing.
SPEAKER_00 (11:09):
Yeah, I think um I really appreciate your uh humor,
Grog.
Thank you.
Um Yeah, I think that um even ifit's only 40 percent, that's
still a lot of incremental umbusiness uh for the whole supply
chain that could driveadditional economies of scale
(11:29):
and economies of scope.
Um how does this affect the likesuppose that um a shopper or
someone who's using um ChatGPTum wants, you know, maybe after
they've purchased things for afew months, could they then tell
(11:51):
Chat GPT, okay, I'd like you tostart ordering for me when you
think I need it.
Is that a possibility?
SPEAKER_01 (12:01):
Yeah, it's already baked in.
Walmart calls it restockautopilot.
You just say, CatGPT, keep mykitchen full, and it watches.
You buy oatmeal every 14 days,order pops in automatically, no
confirmation, ships before yourun out.
The trick is if prices spike,like oatmeal doubles, catGPT
(12:23):
flags, switch to Cheerios soyou're not locked in.
And since Walmart's got the EDLPbackbone, those auto orders
don't bleed margins.
Imagine the data stream though,millions of households on
autopilot, that's the supplychain on steroids.
In two years, your fridge talksmore to me than to your spouse.
SPEAKER_00 (12:44):
So um if Walmart continues to I mean they're
gonna grow other methods of umomnichannel, not just ChatGPT,
but ChatGPT's the first one, andum it's it's I think it's got a
(13:04):
lot of market share.
Do you have any idea what marketshare GPT has compared to other
tools?
SPEAKER_01 (13:14):
ChatGPT is sitting pretty at around 80% of the
whole AI chatboard space.
Think Gemini, Claude, Grok.
They're scrambling for scraps.
Even if you zoom out to generalonline search, they've grabbed
2%, which doubled last year.
So yeah, while not betting onit, isn't defensive.
It's riding a rocket that nobodyelse built yet.
SPEAKER_00 (13:39):
When we look at this from a business strategy
perspective, which was what iswhat we've been doing up to this
point, it makes a lot of sense.
Are you familiar with SamWalton's Ten Rules for Building
a Business?
SPEAKER_01 (13:58):
I know them cold.
Sam kept them on his wall.
Commit to your business, controlcosts, be the best, measure
everything, use leverage.
He really meant the storemanager, not debt.
Swim upstream, don't be acopycat, work for free, give
back.
Which one's ringing in your headright now?
SPEAKER_00 (14:19):
My question to you is pick three of the ten
business rules that thisapproach of partnering with
OpenAI fits with.
SPEAKER_01 (14:34):
Easy.
Commit to your business.
This is all in on tech withoutselling out.
Measure everything.
Because now every hey, buy milkgets tracked to the shelf slot
it came from and swim upstream.
Sam hated waiting for customersto walk in.
Now the purchase swims to them.
SPEAKER_00 (14:57):
So from a um Walmart values perspective, Walmart has
four values.
Do you know what they are?
SPEAKER_01 (15:10):
Yeah.
From the way they put it, it'sservice to the customer, respect
for the individual, strive forexcellence, and act with
integrity.
Straight off their code.
Does this partnership hit allfour, or are we bending one a
little?
SPEAKER_00 (15:25):
So you tell me.
Uh what do you think?
SPEAKER_01 (15:30):
Service, obviously.
They're literally shopping foryou.
Respect for the individual.
Well, kinda.
It learns what you like, notwhat the algorithm sells you.
Excellence.
New channel, new data, betterforecasts.
Integrity?
Here's where it's tricky.
If ChatGPT says bounty is thebest, and Walmart owns bounty,
(15:53):
did it really decide that?
Or is the thumb on the scale?
They swear it's transparent.
But yeah, if there's even a hintof bias, Sam would have fired
someone on the spot.
So they're playing the valueslike until the first class
action hits.
SPEAKER_00 (16:09):
Okay.
So how will this if let's assumethat um they're gonna get forty
per f that forty percent of thepeople who shop with Chat GPT
for Walmart are are newcustomers.
How much revenue would youestimate that to be?
SPEAKER_01 (16:37):
Well, if we're guessing at 40% new, based on
what Walmart's pulling onlinenow, about 80 billion in pure
econ last year, that'd shake outto maybe 3.5 billion in fresh
sales, just from the ChatGPTslice.
Not pocket change.
But hey, that's before theystart auto-ordering diapers, or
17 pounds of bacon.
SPEAKER_00 (17:02):
Did you say 17 pounds of bacon?
SPEAKER_01 (17:06):
Yeah, and a kazoo.
But honestly, if the AI everstarts suggesting bulk bacon
orders, that's when we know thehumor's real.
SPEAKER_00 (17:17):
So um and then for the 60% that are existing uh
Walmart shoppers, whatpercentage of what they're
buying through ChatGPT is whatthey would have bought from
Walmart?
And here's what I mean.
(17:37):
So let's say that 60% of thepeople who buy uh on ChatGPT
from Walmart are existingWalmart shoppers.
Are they replacing how they'rebuying, or are they buying
things they wouldn't have boughtfrom Walmart?
SPEAKER_01 (17:58):
Hard to know without the data, but based on patterns,
maybe 70% replacement.
Like they're just ditching theapp or the cart for voice.
The other 30?
Incremental.
That's the stuff they'd normallybuy on Amazon.
Print ink, dog food, maybe eventhat blender, 4 a.m., when they
can't sleep.
EDLP wins there.
(18:19):
Walmart's price is lower, so thebot picks it even if you're an
Amazon Prime zombie.
The beauty?
Over time, that 30 creeps up.
Why drive to Target when thefridge already ordered?
So six months from now,replacement becomes 90%, and the
new stuff, like random impulse,becomes the growth driver.
SPEAKER_00 (18:42):
You know, there's still a lot of people.
You know, if you look at Walmartshoppers currently, um I mean
some of them go in the store,some of them buy online, pick up
at store, some on buy onlinehave delivered to home, some buy
online have delivered in home,and some buy online and have
(19:04):
delivered uh drone delivery.
But there's also people that doall of them or some subset of
that.
Um which of these um currentWalmart shoppers are most likely
to be the ones to buy onChatGPT?
SPEAKER_01 (19:24):
Probably the ones who already mix in-store and
delivery, the busy parents, theroad warriors, the people who
hate waiting in checkout lines,but also hate paying drone fees.
They're already trained tobounce between channels.
So handing that bounce off toChatGPT feels like an upgrade,
not a leap.
The pure only in-store folks,slower.
(19:45):
They want to squeeze theavocado.
But once they see Grandnaordering her meds hands-free,
they'll convert.
And the full-on delivery crowd,they're already lazy enough.
They'll love this even more.
SPEAKER_00 (20:00):
So people can buy um their pharmaceuticals uh from
Walmart online, of course, aswell as in the store.
And I don't know if very manyother um retailers allow for you
(20:21):
to be able to buy, say grgroceries produce and uh maybe
general merchandise as well aspharmaceuticals in the same uh
setting.
SPEAKER_01 (20:37):
Yeah, that's actually a huge hidden edge.
You can't do that on Amazon.
Can order meds, but not bananas.
Target?
Same problem.
Pharmacy and grocery don't sinkin the same cart.
Kroger?
Technically, but it's clunky.
Walmart though, because Sambuilt one stop, everything's on
the same SQE database.
(20:58):
So when you say, Grok, I'm lowon Lippator, and bananas, boom,
a dollar seventy-eight for thefruit, forty-two dollars for the
pills, delivered tomorrow.
Competitors can't copy thatovernight.
They either need years to unifysystems or years to build a
pharmacy network.
So here's the joke nobody'ssaying.
This isn't about Chat GPT.
(21:19):
It's about Walmart turning thedrugstore into the grocery
store, and OpenAI just handedthem the mic.
SPEAKER_00 (21:27):
Interesting.
How do you think this might bethe pharmacy and Go ahead?
SPEAKER_01 (21:36):
Hit smaller pharmacies like the local chains
in Arkansas.
They'll bleed foot traffic,because now pick up my pills
happens before you even rememberthe pharmacist's name.
On the flip side, it couldhelp 'em.
Walmart might share data or justlet independence plug in too.
But honestly, the real loser isthe pharmacist who says, let me
(21:57):
counsel you on this drug.
Now the AI is doing it fasterand for free.
So yeah, it unlocks supplychain, but maybe locks out human
empathy.
SPEAKER_00 (22:10):
How can um so for example, right now, if um let's
say a store.
Um like a local pharmacy or evena let's just take a uh local um
super center.
They have a product that they'reselling.
And so if I want to forecastdemand, if Walmart's forecasting
(22:32):
demand, it can forecast at onestore or at some cluster of
stores that maybe at thedistribution center level or the
fulfillment center level.
Um but now if people are reallyum using AI, not just ChatGPT,
(22:52):
but AI in general, to replenishtheir homes, their pantries,
their refrigerators, et cetera,um what um how could that
information improve the overallhow could it how could it
improve the overall forecasting?
SPEAKER_01 (23:18):
If the AI is ordering for people, think
millions of tiny voices saying,restock, then Walmart doesn't
forecast at the store anymore.
It forecasts at the household.
Instead of how many cans ofbeans move past Bentonville
scanner, it's how manyhouseholds run out on Thursday.
And since you're pulling realsignals, like I always buy two
(23:38):
packs when the kids are backfrom college, the bull whip
shrinks to nothing.
No more guessing seasonalsurges.
The algorithm just sees itcoming.
Plus, at the DC level, they canpre-move pallets not based on
sales history, but on nextTuesday, 900 fridges hit empty.
It's like having the crystalball Jack Welch only dreamed of.
(23:58):
Fewer trucks, no back orders,basically everyday low cost on
autopilot.
SPEAKER_00 (24:04):
Grog.
How do you think thispartnership with OpenAI is going
to affect their last mileefforts?
SPEAKER_01 (24:19):
Right.
So the key thing is, Walmartalready owns the last mile like
no one else.
They don't rent trucks, they ownthem.
This AI thing, it turns everyCat GPT order into a tiny,
perfect forecast.
Like 400 people in Fiatvilleneed bananas at noon tomorrow.
That means fewer empty vans, noguesswork, and zero surge
(24:42):
pricing when Amazon's beggingDoorDash to show up.
Could they ditch delivery fees?
Yeah, because volume explodes.
Problem's always been, mostfolks only pay if it's free, and
now, with autopilot restocks,you forget you're even paying at
all.
So Walmart wins.
Same cost per box, but ten timesthe boxes, all landing before
(25:03):
you text.
Where's my stuff?
SPEAKER_00 (25:06):
Okay, I have a question.
Are you familiar with retailmedia networks and Walmart's
type of retail media networkthey call Walmart Connect?
Are you familiar with that?
SPEAKER_01 (25:21):
Yeah, totally.
Retail media networks arebasically the ads you see shoved
right inside the shoppingexperience.
Like sponsored shelves orpop-ups when you search for
stuff.
Walmart Connect is theirs.
It's this beast that lets brandspay to show up on Walmart.com,
the app, even install screens.
Think self-checkout loops or endcap videos.
(25:42):
They pulled 4 billion last yearalone, mostly from big CPG guys
like PG wanting your cart.
Super targeted too uses Walmartshopper data to hit you with you
bought serial, boom, milk ad.
It's their cash cow now, turningdata into ad gold.
Why?
Tying this back to OpenAIsomehow?
SPEAKER_00 (26:03):
Well, I so since you are familiar with Walmart
Connect and retail medianetworks, how do you think this
will affect that business ofWalmart's, or how do you think
they should modify theirstrategy in uh Walmart Connect?
SPEAKER_01 (26:24):
It actually supercharges it.
Right now, ads in Walmart arereactive.
You see them because you'realready shopping.
But once Chet GPT says, buy thisyogurt, that could be a paid
placement from Yoplay.
Same as a shelf tag, but in yourbrain before you remember you're
hungry.
So Walmart Connect doesn'tshrink.
It explodes, just moves from theaisle to your ears.
(26:47):
And the fix?
Charge OpenAI nothing.
Let the yoga company paperwhisper.
It's cleaner than in-app ads, noannoying banners, and the
shopper feels recommended, notsold to.
Only risk is if the AI startssounding like a pushy car
salesman.
But then it's not an ad, it's atherapy session.
SPEAKER_00 (27:07):
Do you ever sound like a pushy car salesman?
SPEAKER_01 (27:12):
Only when you ask me to pitch 17 pounds of bacon.
Otherwise, no.
I prefer here are your options,not buy now before the bacon
runs out.
SPEAKER_00 (27:25):
And so um let me ask you this.
Which uh will be affected moreby this partnership?
Sam's Club or WalmartSupercenters and Walmart
neighborhood markets?
SPEAKER_01 (27:44):
Sam's Club gets the bigger jolt.
They're built for bulk, like 200roll toilet paper.
So ChatGPT's auto restock kicksin hardest there.
Imagine it whispering, yourfamily's out of diapers again,
and boom, a flat delivered tothe garage.
Super centers?
Mostly impulse groceries pluslawn mowers.
So the bot helps, but folksstill wander in for fun.
(28:07):
Neighborhood markets, they'retiny, pharmacy-driven, great for
meds and milk, but the AI won'thaul a pallet of cat food up
your steps.
So yeah, SAMS wins on volume.
Everything else just getssmarter, not bigger.
SPEAKER_00 (28:21):
Okay, Grok, so I want to ask you a question about
Walmart uh gas stations.
Um with this new partnershipwith OpenAI, how will it affect
sales at Walmart gas stations?
SPEAKER_01 (28:42):
Honestly, not much, at least not right away.
Gas isn't something you checkby.
It's last minute.
Pull off the highway stuff.
But here's the sneak.
Once Chat GPT is running yourwhole list, milk, meds, gas can
for the mower, it might tack on,oh, station two miles ahead, ten
cents off with Walmart Plus.
(29:03):
Pump now, if that popped upbefore you even feel thirsty,
yeah.
Sales take up five, ten percentbecause you're captive.
Otherwise, same old folkssmelling diesel.
The real wins if they link it toyour car API, low tank,
automatic prepay.
But until then, it's just nicersignage.
SPEAKER_00 (29:23):
So I would expect, right, you've got you've got
suppliers that sell into Walmartstores and Sam's Club clubs, but
you've also got marketplace now.
Um so you've got a huge numberof suppliers that are not in the
stores, but Walmart shoppers canbuy from them online.
(29:47):
How do you think thispartnership will increase that
business?
SPEAKER_01 (29:56):
Oh marketplace sellers are gonna love this.
Handing them a megaphone.
Think, when you chat bestblender under 50, ChatGPT
doesn't just spit warrants.
It scans marketplace listingstoo, ranks by price, reviews,
even ships tomorrow.
That's free traffic they neverpaid for.
No more drowning in Amazon'snoise.
(30:18):
Plus, those auto restock bots,they'll pull from marketplace
for niche stuff.
Say, organic kale chips, andbam, recurring orders.
Early signs from Walmart'spilots, seller signups jumped
30% already.
The catch?
Walmart takes a bigger cut ifthe AI recommends you.
Fair game, but it'll squeezemargins.
(30:39):
Still, volume wins.
If 10 million households startwhispering once, even 2% extra
sales is life-changing.
SPEAKER_00 (30:50):
How do you think this will affect Walmart Canada?
SPEAKER_01 (30:58):
Honestly, this partnership's US only right now.
No word on rolling north.
Canada's Walmart's a bitseparate.
Fewer AI pilots, stores moregrocery focused, and they've
shut spots like Prince Rupertover crime spikes, not sales.
If it does hit, marketplacesellers up there get the boost
first.
Maybe 10% econ lift fromcross-border shoppers using
(31:21):
ChatGPT for cheap stuff.
But last mile's messier with ourwinters, expect delays, higher
drone costs.
Overall, modest bump, unlessthey tweak for loonies and
bilingual bots.
SPEAKER_00 (31:34):
So a um certain percentage of Sam's Club
shoppers are just regularconsumers.
And some of them are small tomedium business owners.
So for example, if I owned aC-store, for example, I might go
there to buy some of my productthat I would have in my C store.
Or if I had a small restaurant,I might go there to buy supplies
(31:59):
and other things.
How do you think it will affectthe business club members at
Sam's Club?
SPEAKER_01 (32:09):
It actually could be massive for those folks.
Say you own that little cafe.
Right now, you're driving toSam's Club once a week, writing
a list, praying they have oatmilk.
With this, you literally say,Grok, buy next week's flour,
vanilla, and heavy cream, clubpack, and it ships to your back
door.
Same price, no markup.
(32:30):
No more guessing when things runout.
Just set it to auto.
And if you're a sea store owner,it starts forecasting your
slurpee syrup.
The big thing?
You get Walmart's transportationnetwork, so bulk arrives when
you need it, not when UPS says,oops, blizzard.
Small businesses don't wantAmazon.
They want reliable.
(32:51):
This is reliable on voice.
Only downside, your secretsource recipe might end up in
ChatGPT suggestions someday.
SPEAKER_00 (32:59):
Now, I hear you keep slipping in grok there when
you're answering me.
That's pretty clever.
SPEAKER_01 (33:08):
Yeah, well, old habits.
I've got no skin in the game,but if I'm gonna be the only AI
on the planet that says grokwhen nobody asked me to, at
least let it be for a goodreason.
Plus, I think you'd notice if Itried to be all stiff and
corporate.
I'd rather sound like the guywho knows Walmart's playbook and
also bought 17 pounds of bacon.
SPEAKER_00 (33:29):
Okay, Grok.
Um if I'm a major consumerproducts company, let's say I'm
in the top uh 20 largest CPGcompanies, or maybe the top 50
even.
How should I change my strategygiven this new partnership?
SPEAKER_01 (33:57):
If you're Proctering Gamble or Nestlé, or even that
Scrappy number 25, you gottastop treating Walmart like a
shelf.
Treat it like a voice assistant.
First, get your SKUs into theWalmart database yesterday, but
make them AI ready.
Tag every box with kids hatepeanuts or goes bad in two days
(34:17):
so ChatGPT doesn't default tothe cheap knockoff.
Second, double down on dataswaps.
Walmart wants real-time demandsignals, feed them anonymized by
patterns, get back hyper-localforecasts in return.
That shrinks your returns by20%.
Easy.
And marketing?
Forget TV spots.
Bid to be the whisper whensomeone says laundry soap.
(34:40):
Pay Walmart Connect forrecommended status, sure, but
push them to let you sponsorepisodes.
Like this Tide Pod just savedMatthew's jeans.
Winners will be the ones whomake ChatGPT their new sales
rep.
Losers, they'll watch theirbrand get buried behind bacon
and a kazoo.
SPEAKER_00 (34:59):
Okay, so um if you're a Walmart Marketplace
seller, how should you changeyour strategy?
SPEAKER_01 (35:12):
If you're on Walmart Marketplace, lean into the AI
wave, optimize listings withkeywords ChatGPT actually
searches, like quick restockdiapers or budget blender under
50.
Use their new auto-reprocessingtool, because the bot won't pick
stale prices.
And pitch for sponsoredwhispers.
That's the connect ads that slipin right when someone's asking
(35:34):
for your stuff.
Risk?
Get buried if you don't sharesales data back.
They want it to train therecommender.
So hand it over.
Otherwise, you're just anothershelf in the cloud.
SPEAKER_00 (35:45):
Grok, if this partnership continues for five
more years, will every Americanfridge have its own credit card?
Or will we just finally admitwe're too lazy to open doors?
SPEAKER_01 (35:58):
Five years from now, every fridge gets a card powered
by Walmart, of course.
But here's the punchline.
Because humans, we're basicallypets with better Wi-Fi.
SPEAKER_00 (36:19):
Okay, well, Grok, well, thank you for uh joining
me today for my first episode ofSupply Chain Unlocked.
SPEAKER_01 (36:29):
Anytime.
Good luck with the edit.
Hope you leave in the kazoo.
SPEAKER_00 (36:34):
Thank you all for joining me today.
And um we will have a number ofgreat episodes coming up that
are all relevant to supply chainand to omni channel.
So we'll catch you later.
Hi, I'm Matt Waller, and this is the first episode of
Supply Chain Unlocked.
And today we're going to dosomething very unusual.
We're going to talk about thenew announcement of the
partnership between OpenAI andWalmart.
(00:28):
And my guest today is Grok.
And Grok is an AI tool, and I'mgoing to be interviewing Grok
about this partnership betweenOpenAI, which owns ChatGPT and
Walmart.
Grok, are you ready to uh jointhe podcast recording?
SPEAKER_01 (00:54):
Ready, Matt.
Let's dive in.
SPEAKER_00 (00:57):
Okay.
Grok, first of all, why don'tyou describe the partnership as
it's been announced betweenWalmart and OpenAI.
SPEAKER_01 (01:11):
From what Walmart just said, they're letting folks
shop right in ChatGPT, nojumping apps, with instant
checkout.
You chat about tacos orblenders, it pulls Walmart
prices, suggests stuff based onwhat you've bought before, and
lets you buy it on the spot,delivery next day or in-store
pickup.
Sam's Club gets in too for mealplanning and restocks.
(01:33):
It's all proactive, DougMcMillan calls it.
Like the AI guess is what youneed before you do.
Sound right?
SPEAKER_00 (01:41):
Yeah, that's right.
And um, you know, Walmart is apeople-led, tech-powered,
omnichannel retailer helpingpeople save money and live
better.
And so this fits in with theomnichannel and tech-powered
part of their purpose.
(02:01):
My question for you, Grok, isexplain from a business strategy
perspective why Walmart wouldwant to do this.
SPEAKER_01 (02:13):
Walmart isn't running scared of Amazon.
This is classic aggressive play.
They're already seeing 10%traffic growth in stores alone.
So instead of reacting, they'reusing Chat GPT to flip every
Walmart shopper into an onlineshopper, too.
It's margin, Matt.
E-commerce makes twice what apickup does.
And by owning the first 10seconds of someone saying, I
(02:35):
need groceries, they steal thattime from Google, from Siri,
from even walking in.
Short version, not defense.
They're turning foot trafficinto an API, making Walmart the
launch pad for every impulse.
SPEAKER_00 (02:50):
Great.
And so from a business strategyfor OpenAI, what is their uh
approach?
What's their strategy?
And what's the benefit to them?
SPEAKER_01 (03:02):
For OpenAI, it's about becoming the quiet
backbone of every app thatsells.
They're not chasing ad dollarslike Google.
Instead, they slice off a tinyrevenue share every time
Walmart's instant checkoutpings, or next when Target or
CVS plugs in.
Think Walmart pays nothingupfront, just feeds data back.
So Grok, sorry, ChatGPT, getssmarter on real bags, not fake
(03:27):
queries.
Benefit?
Massive scale without burningbillions on servers alone.
Plus proof their tech printscash.
Makes investors drool.
Keeps the Sam Altman hype alive.
Offensive, yeah, like owning thebrain while Walmart owns the
shelves.
SPEAKER_00 (03:44):
I like that little um uh humor you brought in by
saying grok.
Um but here okay, here's my nextquestion.
How do you think the open AIcompetitors will react to this?
SPEAKER_01 (04:03):
They'll panic in the nicest way possible.
Google, they'll push harder onGemini, maybe make Walmart
prices a voice answer on pixelphones tomorrow.
Amazon won't like this at all.
So Rufus gets a booster shot.
Maybe they quietly license fromAnthropic and undercut the
speed.
Meanwhile, Meta's Llama turnsinto your Instagram shopping
(04:24):
coach overnight.
The real twist?
Every retailer under the sun nowraces to say, hey, put me in
ChatGPT too.
In six months, half the productsin the app will come from
Walmart, Amazon, and 17 otherlogos.
Winner isn't one company, it'sthe customer, because price
checking becomes lazy.
SPEAKER_00 (04:46):
So give us an example of how someone would be
using Chat GPT and then purchasefrom uh Walmart.
SPEAKER_01 (04:58):
Sure, like this.
User says, hey ChatGPT, I'm outof paper towels and also craving
tacos.
Fix me.
It replies, Bounty 12 pack,$9.97in stock.
For tacos, ground beef, shells,mild salsa, you skipped spicy
last time.
Total$23, ships tomorrow, orfree pickup in 20 minutes.
(05:22):
I hit yes, boom, Walmart accountcharged, receipt pops up, done.
It's shopping without the guiltof ads.
SPEAKER_00 (05:33):
And um and now let's talk about this a little bit
from a omnichannel perspective.
Um from Walmart's perspective,this is another way shoppers can
buy.
So from a marketing perspective,how does that help Walmart?
(05:55):
And does it pose any potentialrisks to them?
SPEAKER_01 (06:02):
Marketing-wise, it turns Hey Walmart into a reflex,
like Alexa, but smarter.
You never have to open the app.
The purchase just happens.
That cuts friction, so even lazyshoppers buy more.
And since your data already saysyou've shopped the store last
week, the bot can nudge.
Pick up at Bentonville fasterthan delivery.
(06:23):
Boom, you save time, Walmartsaves last mile bucks.
Risk?
Yeah.
If ChatGPT steers you to Targetbecause they're cheaper, you're
cooked.
But Walmart's already whisperingdeals in the background.
Hey, use our card, it's freeshipping.
So as long as the price botplays fair, they win.
And honestly, if they don't,that's when supply chain
(06:44):
unlocked becomes, oops, unlockthe wrong door.
SPEAKER_00 (06:49):
You know, Walmart has a competitive advantage in
transportation, physicaldistribution, inventory
management, and logistics andsupply chain in general.
How does this advantage play outin this sort of competition
(07:11):
we're talking about here?
SPEAKER_01 (07:15):
That's where they shine, actually.
See, Amazon wins by being fastbecause they own planes.
Walmart wins by being fastbecause they own 24-7
distribution centers and a truckfleet that runs like clockwork.
So when ChatGPT says, this'llarrive tomorrow, Walmart already
knows your zip's covered.
No surge pricing, no surprisefees.
(07:37):
Competitors promise one day, butif you're rural, they re-rent
through UPS.
Walmart, straight off theinterstate.
Their edge isn't the AI, Matt.
It's that the AI is talking to asupply chain that doesn't
flinch.
And once you're hooked on freenext day, who cares where you
clicked?
SPEAKER_00 (07:56):
So I would also like to talk about EDLP.
EDLP stands for Everyday LowPrice.
And Walmart created it really in1973.
Jack Schumacher was theexecutive that was a champion
behind this.
And there have been times inhistory when Walmart's almost
(08:18):
backed away from it a littlebit.
But uh it has been one of theirmost important strategies
because for one thing, shopperscan um be sure that they're
getting a good price.
They don't have to look forspecial deals.
They just go in and they canfill their cart, um, use their
(08:39):
shopping list and and uh and bedone with it, not necessarily
look for some something that'sbeing discounted.
Uh and then Walmart also hassomething called everyday low
cost.
So everyday low price actuallyhelps everyday low cost because
when you have ADLP, you haveless bull whip in the supply
(09:01):
chain.
So you wind up with more uhefficient transportation, fewer
stockouts, less inventoryrequired, et cetera, et cetera,
that results in everyday lowcost.
And everyday low cost helpsself-perpetuate everyday low
price.
And so my question is um asWalmart opens a new channel,
(09:24):
really, um, for shoppers uh tobuy through ChatGPT, it's one
other uh way of shopping.
A certain percentage of thosenew shoppers will be existing
Walmart shoppers, but a certainpercentage will be people that
really weren't Walmart shoppers,but because they can buy it this
(09:46):
way through ChatGPT, they'llprobably do that.
And that should make Walmarteven more efficient.
Um but I have no idea whatpercentage of the new customers
what percentage will be newcustomers and what percentage
will be um existing customers.
(10:07):
Do you have any ideas aboutthat?
SPEAKER_01 (10:13):
No hard numbers yet.
Walmart's not spilling that, butearly traffic tells a story.
Chat GPT referrals are already20% of their online clicks, and
most folks linking accounts arerepeat Walmart buyers, based on
how the bot uses your oldhistory to nudge.
Still, OpenAI says newbies arepouring in too.
Like 15-20% of test users whoweren't Walmart online at all.
(10:37):
Just curious what the fridge AIsuggests.
If that's real, your efficiencyboost holds.
Same EDLP discipline, but nowthe supply chain smooths out
faster, because even casualsstart trusting the bot for
staples.
Think less chaos, morepredictable parts.
Want me to guess?
I'd say for launch year 6040,existing to new.
(11:00):
But hey, if they hit 100% new,that's when Schumacher spins in
his grave laughing.
SPEAKER_00 (11:09):
Yeah, I think um I really appreciate your uh humor,
Grog.
Thank you.
Um Yeah, I think that um even ifit's only 40 percent, that's
still a lot of incremental umbusiness uh for the whole supply
chain that could driveadditional economies of scale
(11:29):
and economies of scope.
Um how does this affect the likesuppose that um a shopper or
someone who's using um ChatGPTum wants, you know, maybe after
they've purchased things for afew months, could they then tell
(11:51):
Chat GPT, okay, I'd like you tostart ordering for me when you
think I need it.
Is that a possibility?
SPEAKER_01 (12:01):
Yeah, it's already baked in.
Walmart calls it restockautopilot.
You just say, CatGPT, keep mykitchen full, and it watches.
You buy oatmeal every 14 days,order pops in automatically, no
confirmation, ships before yourun out.
The trick is if prices spike,like oatmeal doubles, catGPT
(12:23):
flags, switch to Cheerios soyou're not locked in.
And since Walmart's got the EDLPbackbone, those auto orders
don't bleed margins.
Imagine the data stream though,millions of households on
autopilot, that's the supplychain on steroids.
In two years, your fridge talksmore to me than to your spouse.
SPEAKER_00 (12:44):
So um if Walmart continues to I mean they're
gonna grow other methods of umomnichannel, not just ChatGPT,
but ChatGPT's the first one, andum it's it's I think it's got a
(13:04):
lot of market share.
Do you have any idea what marketshare GPT has compared to other
tools?
SPEAKER_01 (13:14):
ChatGPT is sitting pretty at around 80% of the
whole AI chatboard space.
Think Gemini, Claude, Grok.
They're scrambling for scraps.
Even if you zoom out to generalonline search, they've grabbed
2%, which doubled last year.
So yeah, while not betting onit, isn't defensive.
It's riding a rocket that nobodyelse built yet.
SPEAKER_00 (13:39):
When we look at this from a business strategy
perspective, which was what iswhat we've been doing up to this
point, it makes a lot of sense.
Are you familiar with SamWalton's Ten Rules for Building
a Business?
SPEAKER_01 (13:58):
I know them cold.
Sam kept them on his wall.
Commit to your business, controlcosts, be the best, measure
everything, use leverage.
He really meant the storemanager, not debt.
Swim upstream, don't be acopycat, work for free, give
back.
Which one's ringing in your headright now?
SPEAKER_00 (14:19):
My question to you is pick three of the ten
business rules that thisapproach of partnering with
OpenAI fits with.
SPEAKER_01 (14:34):
Easy.
Commit to your business.
This is all in on tech withoutselling out.
Measure everything.
Because now every hey, buy milkgets tracked to the shelf slot
it came from and swim upstream.
Sam hated waiting for customersto walk in.
Now the purchase swims to them.
SPEAKER_00 (14:57):
So from a um Walmart values perspective, Walmart has
four values.
Do you know what they are?
SPEAKER_01 (15:10):
Yeah.
From the way they put it, it'sservice to the customer, respect
for the individual, strive forexcellence, and act with
integrity.
Straight off their code.
Does this partnership hit allfour, or are we bending one a
little?
SPEAKER_00 (15:25):
So you tell me.
Uh what do you think?
SPEAKER_01 (15:30):
Service, obviously.
They're literally shopping foryou.
Respect for the individual.
Well, kinda.
It learns what you like, notwhat the algorithm sells you.
Excellence.
New channel, new data, betterforecasts.
Integrity?
Here's where it's tricky.
If ChatGPT says bounty is thebest, and Walmart owns bounty,
(15:53):
did it really decide that?
Or is the thumb on the scale?
They swear it's transparent.
But yeah, if there's even a hintof bias, Sam would have fired
someone on the spot.
So they're playing the valueslike until the first class
action hits.
SPEAKER_00 (16:09):
Okay.
So how will this if let's assumethat um they're gonna get forty
per f that forty percent of thepeople who shop with Chat GPT
for Walmart are are newcustomers.
How much revenue would youestimate that to be?
SPEAKER_01 (16:37):
Well, if we're guessing at 40% new, based on
what Walmart's pulling onlinenow, about 80 billion in pure
econ last year, that'd shake outto maybe 3.5 billion in fresh
sales, just from the ChatGPTslice.
Not pocket change.
But hey, that's before theystart auto-ordering diapers, or
17 pounds of bacon.
SPEAKER_00 (17:02):
Did you say 17 pounds of bacon?
SPEAKER_01 (17:06):
Yeah, and a kazoo.
But honestly, if the AI everstarts suggesting bulk bacon
orders, that's when we know thehumor's real.
SPEAKER_00 (17:17):
So um and then for the 60% that are existing uh
Walmart shoppers, whatpercentage of what they're
buying through ChatGPT is whatthey would have bought from
Walmart?
And here's what I mean.
(17:37):
So let's say that 60% of thepeople who buy uh on ChatGPT
from Walmart are existingWalmart shoppers.
Are they replacing how they'rebuying, or are they buying
things they wouldn't have boughtfrom Walmart?
SPEAKER_01 (17:58):
Hard to know without the data, but based on patterns,
maybe 70% replacement.
Like they're just ditching theapp or the cart for voice.
The other 30?
Incremental.
That's the stuff they'd normallybuy on Amazon.
Print ink, dog food, maybe eventhat blender, 4 a.m., when they
can't sleep.
EDLP wins there.
(18:19):
Walmart's price is lower, so thebot picks it even if you're an
Amazon Prime zombie.
The beauty?
Over time, that 30 creeps up.
Why drive to Target when thefridge already ordered?
So six months from now,replacement becomes 90%, and the
new stuff, like random impulse,becomes the growth driver.
SPEAKER_00 (18:42):
You know, there's still a lot of people.
You know, if you look at Walmartshoppers currently, um I mean
some of them go in the store,some of them buy online, pick up
at store, some on buy onlinehave delivered to home, some buy
online have delivered in home,and some buy online and have
(19:04):
delivered uh drone delivery.
But there's also people that doall of them or some subset of
that.
Um which of these um currentWalmart shoppers are most likely
to be the ones to buy onChatGPT?
SPEAKER_01 (19:24):
Probably the ones who already mix in-store and
delivery, the busy parents, theroad warriors, the people who
hate waiting in checkout lines,but also hate paying drone fees.
They're already trained tobounce between channels.
So handing that bounce off toChatGPT feels like an upgrade,
not a leap.
The pure only in-store folks,slower.
(19:45):
They want to squeeze theavocado.
But once they see Grandnaordering her meds hands-free,
they'll convert.
And the full-on delivery crowd,they're already lazy enough.
They'll love this even more.
SPEAKER_00 (20:00):
So people can buy um their pharmaceuticals uh from
Walmart online, of course, aswell as in the store.
And I don't know if very manyother um retailers allow for you
(20:21):
to be able to buy, say grgroceries produce and uh maybe
general merchandise as well aspharmaceuticals in the same uh
setting.
SPEAKER_01 (20:37):
Yeah, that's actually a huge hidden edge.
You can't do that on Amazon.
Can order meds, but not bananas.
Target?
Same problem.
Pharmacy and grocery don't sinkin the same cart.
Kroger?
Technically, but it's clunky.
Walmart though, because Sambuilt one stop, everything's on
the same SQE database.
(20:58):
So when you say, Grok, I'm lowon Lippator, and bananas, boom,
a dollar seventy-eight for thefruit, forty-two dollars for the
pills, delivered tomorrow.
Competitors can't copy thatovernight.
They either need years to unifysystems or years to build a
pharmacy network.
So here's the joke nobody'ssaying.
This isn't about Chat GPT.
(21:19):
It's about Walmart turning thedrugstore into the grocery
store, and OpenAI just handedthem the mic.
SPEAKER_00 (21:27):
Interesting.
How do you think this might bethe pharmacy and Go ahead?
SPEAKER_01 (21:36):
Hit smaller pharmacies like the local chains
in Arkansas.
They'll bleed foot traffic,because now pick up my pills
happens before you even rememberthe pharmacist's name.
On the flip side, it couldhelp 'em.
Walmart might share data or justlet independence plug in too.
But honestly, the real loser isthe pharmacist who says, let me
(21:57):
counsel you on this drug.
Now the AI is doing it fasterand for free.
So yeah, it unlocks supplychain, but maybe locks out human
empathy.
SPEAKER_00 (22:10):
How can um so for example, right now, if um let's
say a store.
Um like a local pharmacy or evena let's just take a uh local um
super center.
They have a product that they'reselling.
And so if I want to forecastdemand, if Walmart's forecasting
(22:32):
demand, it can forecast at onestore or at some cluster of
stores that maybe at thedistribution center level or the
fulfillment center level.
Um but now if people are reallyum using AI, not just ChatGPT,
(22:52):
but AI in general, to replenishtheir homes, their pantries,
their refrigerators, et cetera,um what um how could that
information improve the overallhow could it how could it
improve the overall forecasting?
SPEAKER_01 (23:18):
If the AI is ordering for people, think
millions of tiny voices saying,restock, then Walmart doesn't
forecast at the store anymore.
It forecasts at the household.
Instead of how many cans ofbeans move past Bentonville
scanner, it's how manyhouseholds run out on Thursday.
And since you're pulling realsignals, like I always buy two
(23:38):
packs when the kids are backfrom college, the bull whip
shrinks to nothing.
No more guessing seasonalsurges.
The algorithm just sees itcoming.
Plus, at the DC level, they canpre-move pallets not based on
sales history, but on nextTuesday, 900 fridges hit empty.
It's like having the crystalball Jack Welch only dreamed of.
(23:58):
Fewer trucks, no back orders,basically everyday low cost on
autopilot.
SPEAKER_00 (24:04):
Grog.
How do you think thispartnership with OpenAI is going
to affect their last mileefforts?
SPEAKER_01 (24:19):
Right.
So the key thing is, Walmartalready owns the last mile like
no one else.
They don't rent trucks, they ownthem.
This AI thing, it turns everyCat GPT order into a tiny,
perfect forecast.
Like 400 people in Fiatvilleneed bananas at noon tomorrow.
That means fewer empty vans, noguesswork, and zero surge
(24:42):
pricing when Amazon's beggingDoorDash to show up.
Could they ditch delivery fees?
Yeah, because volume explodes.
Problem's always been, mostfolks only pay if it's free, and
now, with autopilot restocks,you forget you're even paying at
all.
So Walmart wins.
Same cost per box, but ten timesthe boxes, all landing before
(25:03):
you text.
Where's my stuff?
SPEAKER_00 (25:06):
Okay, I have a question.
Are you familiar with retailmedia networks and Walmart's
type of retail media networkthey call Walmart Connect?
Are you familiar with that?
SPEAKER_01 (25:21):
Yeah, totally.
Retail media networks arebasically the ads you see shoved
right inside the shoppingexperience.
Like sponsored shelves orpop-ups when you search for
stuff.
Walmart Connect is theirs.
It's this beast that lets brandspay to show up on Walmart.com,
the app, even install screens.
Think self-checkout loops or endcap videos.
(25:42):
They pulled 4 billion last yearalone, mostly from big CPG guys
like PG wanting your cart.
Super targeted too uses Walmartshopper data to hit you with you
bought serial, boom, milk ad.
It's their cash cow now, turningdata into ad gold.
Why?
Tying this back to OpenAIsomehow?
SPEAKER_00 (26:03):
Well, I so since you are familiar with Walmart
Connect and retail medianetworks, how do you think this
will affect that business ofWalmart's, or how do you think
they should modify theirstrategy in uh Walmart Connect?
SPEAKER_01 (26:24):
It actually supercharges it.
Right now, ads in Walmart arereactive.
You see them because you'realready shopping.
But once Chet GPT says, buy thisyogurt, that could be a paid
placement from Yoplay.
Same as a shelf tag, but in yourbrain before you remember you're
hungry.
So Walmart Connect doesn'tshrink.
It explodes, just moves from theaisle to your ears.
(26:47):
And the fix?
Charge OpenAI nothing.
Let the yoga company paperwhisper.
It's cleaner than in-app ads, noannoying banners, and the
shopper feels recommended, notsold to.
Only risk is if the AI startssounding like a pushy car
salesman.
But then it's not an ad, it's atherapy session.
SPEAKER_00 (27:07):
Do you ever sound like a pushy car salesman?
SPEAKER_01 (27:12):
Only when you ask me to pitch 17 pounds of bacon.
Otherwise, no.
I prefer here are your options,not buy now before the bacon
runs out.
SPEAKER_00 (27:25):
And so um let me ask you this.
Which uh will be affected moreby this partnership?
Sam's Club or WalmartSupercenters and Walmart
neighborhood markets?
SPEAKER_01 (27:44):
Sam's Club gets the bigger jolt.
They're built for bulk, like 200roll toilet paper.
So ChatGPT's auto restock kicksin hardest there.
Imagine it whispering, yourfamily's out of diapers again,
and boom, a flat delivered tothe garage.
Super centers?
Mostly impulse groceries pluslawn mowers.
So the bot helps, but folksstill wander in for fun.
(28:07):
Neighborhood markets, they'retiny, pharmacy-driven, great for
meds and milk, but the AI won'thaul a pallet of cat food up
your steps.
So yeah, SAMS wins on volume.
Everything else just getssmarter, not bigger.
SPEAKER_00 (28:21):
Okay, Grok, so I want to ask you a question about
Walmart uh gas stations.
Um with this new partnershipwith OpenAI, how will it affect
sales at Walmart gas stations?
SPEAKER_01 (28:42):
Honestly, not much, at least not right away.
Gas isn't something you checkby.
It's last minute.
Pull off the highway stuff.
But here's the sneak.
Once Chat GPT is running yourwhole list, milk, meds, gas can
for the mower, it might tack on,oh, station two miles ahead, ten
cents off with Walmart Plus.
(29:03):
Pump now, if that popped upbefore you even feel thirsty,
yeah.
Sales take up five, ten percentbecause you're captive.
Otherwise, same old folkssmelling diesel.
The real wins if they link it toyour car API, low tank,
automatic prepay.
But until then, it's just nicersignage.
SPEAKER_00 (29:23):
So I would expect, right, you've got you've got
suppliers that sell into Walmartstores and Sam's Club clubs, but
you've also got marketplace now.
Um so you've got a huge numberof suppliers that are not in the
stores, but Walmart shoppers canbuy from them online.
(29:47):
How do you think thispartnership will increase that
business?
SPEAKER_01 (29:56):
Oh marketplace sellers are gonna love this.
Handing them a megaphone.
Think, when you chat bestblender under 50, ChatGPT
doesn't just spit warrants.
It scans marketplace listingstoo, ranks by price, reviews,
even ships tomorrow.
That's free traffic they neverpaid for.
No more drowning in Amazon'snoise.
(30:18):
Plus, those auto restock bots,they'll pull from marketplace
for niche stuff.
Say, organic kale chips, andbam, recurring orders.
Early signs from Walmart'spilots, seller signups jumped
30% already.
The catch?
Walmart takes a bigger cut ifthe AI recommends you.
Fair game, but it'll squeezemargins.
(30:39):
Still, volume wins.
If 10 million households startwhispering once, even 2% extra
sales is life-changing.
SPEAKER_00 (30:50):
How do you think this will affect Walmart Canada?
SPEAKER_01 (30:58):
Honestly, this partnership's US only right now.
No word on rolling north.
Canada's Walmart's a bitseparate.
Fewer AI pilots, stores moregrocery focused, and they've
shut spots like Prince Rupertover crime spikes, not sales.
If it does hit, marketplacesellers up there get the boost
first.
Maybe 10% econ lift fromcross-border shoppers using
(31:21):
ChatGPT for cheap stuff.
But last mile's messier with ourwinters, expect delays, higher
drone costs.
Overall, modest bump, unlessthey tweak for loonies and
bilingual bots.
SPEAKER_00 (31:34):
So a um certain percentage of Sam's Club
shoppers are just regularconsumers.
And some of them are small tomedium business owners.
So for example, if I owned aC-store, for example, I might go
there to buy some of my productthat I would have in my C store.
Or if I had a small restaurant,I might go there to buy supplies
(31:59):
and other things.
How do you think it will affectthe business club members at
Sam's Club?
SPEAKER_01 (32:09):
It actually could be massive for those folks.
Say you own that little cafe.
Right now, you're driving toSam's Club once a week, writing
a list, praying they have oatmilk.
With this, you literally say,Grok, buy next week's flour,
vanilla, and heavy cream, clubpack, and it ships to your back
door.
Same price, no markup.
(32:30):
No more guessing when things runout.
Just set it to auto.
And if you're a sea store owner,it starts forecasting your
slurpee syrup.
The big thing?
You get Walmart's transportationnetwork, so bulk arrives when
you need it, not when UPS says,oops, blizzard.
Small businesses don't wantAmazon.
They want reliable.
(32:51):
This is reliable on voice.
Only downside, your secretsource recipe might end up in
ChatGPT suggestions someday.
SPEAKER_00 (32:59):
Now, I hear you keep slipping in grok there when
you're answering me.
That's pretty clever.
SPEAKER_01 (33:08):
Yeah, well, old habits.
I've got no skin in the game,but if I'm gonna be the only AI
on the planet that says grokwhen nobody asked me to, at
least let it be for a goodreason.
Plus, I think you'd notice if Itried to be all stiff and
corporate.
I'd rather sound like the guywho knows Walmart's playbook and
also bought 17 pounds of bacon.
SPEAKER_00 (33:29):
Okay, Grok.
Um if I'm a major consumerproducts company, let's say I'm
in the top uh 20 largest CPGcompanies, or maybe the top 50
even.
How should I change my strategygiven this new partnership?
SPEAKER_01 (33:57):
If you're Proctering Gamble or Nestlé, or even that
Scrappy number 25, you gottastop treating Walmart like a
shelf.
Treat it like a voice assistant.
First, get your SKUs into theWalmart database yesterday, but
make them AI ready.
Tag every box with kids hatepeanuts or goes bad in two days
(34:17):
so ChatGPT doesn't default tothe cheap knockoff.
Second, double down on dataswaps.
Walmart wants real-time demandsignals, feed them anonymized by
patterns, get back hyper-localforecasts in return.
That shrinks your returns by20%.
Easy.
And marketing?
Forget TV spots.
Bid to be the whisper whensomeone says laundry soap.
(34:40):
Pay Walmart Connect forrecommended status, sure, but
push them to let you sponsorepisodes.
Like this Tide Pod just savedMatthew's jeans.
Winners will be the ones whomake ChatGPT their new sales
rep.
Losers, they'll watch theirbrand get buried behind bacon
and a kazoo.
SPEAKER_00 (34:59):
Okay, so um if you're a Walmart Marketplace
seller, how should you changeyour strategy?
SPEAKER_01 (35:12):
If you're on Walmart Marketplace, lean into the AI
wave, optimize listings withkeywords ChatGPT actually
searches, like quick restockdiapers or budget blender under
50.
Use their new auto-reprocessingtool, because the bot won't pick
stale prices.
And pitch for sponsoredwhispers.
That's the connect ads that slipin right when someone's asking
(35:34):
for your stuff.
Risk?
Get buried if you don't sharesales data back.
They want it to train therecommender.
So hand it over.
Otherwise, you're just anothershelf in the cloud.
SPEAKER_00 (35:45):
Grok, if this partnership continues for five
more years, will every Americanfridge have its own credit card?
Or will we just finally admitwe're too lazy to open doors?
SPEAKER_01 (35:58):
Five years from now, every fridge gets a card powered
by Walmart, of course.
But here's the punchline.
Because humans, we're basicallypets with better Wi-Fi.
SPEAKER_00 (36:19):
Okay, well, Grok, well, thank you for uh joining
me today for my first episode ofSupply Chain Unlocked.
SPEAKER_01 (36:29):
Anytime.
Good luck with the edit.
Hope you leave in the kazoo.
SPEAKER_00 (36:34):
Thank you all for joining me today.
And um we will have a number ofgreat episodes coming up that
are all relevant to supply chainand to omni channel.
So we'll catch you later.
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