Walmart's New Weapon in its fight against Amazon? Artificial Intelligence (AI)
How Walmart is using AI to reclaim its position as the #1 retailer in the world
Add bookmarkThanks to its enormous inventory and bargain-basement prices, Walmart has long reigned as the top retailer in the world. In 2020 alone the big box behemoth brought in $519.93 billion in revenues, about twice as much as Amazon, its closest competitor.
However, this is rapidly changing. According to a report by the New York Times, in June 2021, FactSet researchers estimated that people spent more than $610 billion at Amazon YOY. A few weeks later, at the end of July 2021, Walmart posted YOY sales of $566 billion, making this the first time Amazon has surpassed them in sales.
Is this the beginning of a new era? Not if Walmart has anything to say about it.
It’s true that Amazon has a number of strategic advantages: it’s by far the dominant brand when it comes to online shopping, its third-party marketplace is thriving and its Prime membership drives customer loyalty, amongst other things. Amazon is even starting to expand into buy online, pickup in-store (BOPIS), one of the last remaining competitive advantages associated with brick & mortar retailers.
In an effort to regain its market dominance and stay ahead of Amazon as well as other traditional competitors such as Target and Costco, Walmart is embracing artificial intelligence (AI) as its next big strategic advantage. As covered previously on our sister site, many of these AI projects are cooked up in Walmart’s Intelligent Retail Lab, a real-world shopping environment that allows Walmart to develop and refine new, technology driven customer experience.
RetailAI® Fresh
Though self-checkout is supposed to make our lives easier, that isn’t always the case. Anyone who's ever tried to purchase an untagged produce item knows how irritating it can be to scan through hundreds of options to identify the right item.
Walmart’s solution to this problem is RetailAI® Fresh, a new AI technology that uses computer vision to identify produce within seconds of it being placed on the scale. According to a recent insidebigdata.com article, the tool reduced average weighing time by approximately 40%.
RetailAI® Fresh, which is currently only deployed in China, was developed by Malong Technologies. It runs on NVIDIA T4 Tensor Core GPUs, Dell EMC PowerEdge R7525 servers and the NVIDIA EGX optimized edge software stack.
Smarter Grocery Substitutions
One of the lingering challenges associated with online grocery shopping is substitutions. What many people don’t realize when they order groceries online is that human shoppers are the one picking out the items on their behalf. In the event that a product is sold out, these personal shoppers, who are often under immense time constraints, are tasked with a difficult decision: to substitute or not.
Leveraging deep learning AI to consider hundreds of variables — size, type, brand, price, aggregate shopper data, individual customer preference, current inventory and more – Walmart’s new substitution tool can deliver a product recommendation for substitution within seconds. Thanks to this new solution, customer acceptance of substitutions has increased to over 95%.
Driverless Same-Day Delivery
In September 2021, Walmart, along with its partners Ford and Argo AI, announced the launch of its autonomous vehicle delivery service in Miami, Austin, and Washington, D.C. With initial test runs starting in 2022, the goal is to enable same-day delivery from local stores to nearby residences.
Once a customer completes their online order, Argo's cloud-based system with schedule and route deliveries. The goods will then be delivered in Ford vehicles equipped with Argo AI’s self-driving technology.