Walmart, America's biggest retailer, is digging deeper into generative AI to create a "single, unified retail experience" across stores and online, including generative AI-powered search and an AI-powered product replenishment service.

Driving the news: The mega-retailer announced Tuesday afternoon during CES that a partnership with Microsoft will power a range of new shopping experiences in 2024, drawing on AI models from Microsoft Azure and OpenAI as well as Walmart's own custom models.

• "Let's say you're throwing a party for next month's Super Bowl. Previously, you might have run numerous searches for chips, wings, drinks, and a new 90-inch television," Walmart CEO Doug McMillon told CES.
• Instead of a traditional list of search results, the Walmart app will now "show you everything you might need" for a single experience or event, he said.

McMillon pitched Walmart as its customers' problem-solving partner, and brought Microsoft CEO Satya Nadella on stage to tout the service.

• For customers, having their "intent being understood is empowering," Nadella said.

Be smart: Walmart's AI approach is deliberately incremental.

• The company is betting that by responding to specific frustrations from customers and workers, it has a better chance of spurring their enthusiasm for AI-driven shopping.

Details: Walmart's AI strategy boils down to finding ways to make sure shelves are never empty, whether they are in a Supercenter store or your own refrigerator.

• Never run out of milk: That's the promise of Walmart's new InHome Replenishment service, an automated shopping basket that sends customers replacement items and adjusts orders based on the customer's habits and the company's overall view of consumer behavior. It's available to shoppers with a $20 monthly InHome membership.
• Walmart is also rolling out its My Assistant tool for non-store workers in 11 countries — the tool has been piloted among American workers since August.
• Store floor workers use an app called Ask Sam to help answer customer queries.
• Walmart also unveiled a new augmented reality feature that lets customers solicit feedback from friends about potential clothing purchases through various mobile sharing apps.

Of note: 2024 is set to be a breakout year for drones, and Walmart's contribution is expanding drone delivery to 1.8 million households in the Dallas Fort-Worth area.

• 90,000 of the 120,000 items carried at its Walmart Supercenters will be part of the service.

The big picture: Walmart is going toe-to-toe with competitors such as Amazon here at CES, but is also making a pitch to potential employees and Wall Street that it's ready to profit from generative AI.

What they're saying: "Every engagement is interconnected," Walmart CTO Suresh Kumar said at CES. "We're not thinking about e-commerce and in-store" separately any more, he added.

• "Think of it as a store that is constructed for the customer on the fly," offering personalized product selections, displayed in more compelling ways, Sravana Karnati, CTO of Walmart International, told Axios last month.