Tech Viewpoint: Amazon vs. Walmart – The battle of AI-based future store strategies
The two most influential retailers have different visions of how artificial intelligence (AI) will shape the “store of the future.”
Amazon recently opened its 11th Amazon Go store, which uses AI technology to provide a frictionless self-shopping experience. And Walmart just announced that it is running a pilot store as a live, AI-based “Intelligent Retail Lab” (IRL).
Both of these retail giants clearly see AI as the foundation of the store of the future. But their predictions of how AI will transform the store experience are quite different. Here is a brief comparative overview of Amazon Go and Walmart IRL.
Amazon Go – Less human than human
The Amazon Go store model eliminates the need for human cashiers, or cash payments. Cameras equipped with computer vision and facial recognition technology, as well as automatic sensors, keep track of the items customers take from shelves. When a shopper is ready to check out, they automatically pay with a registered credit or debit card inside the Amazon Go mobile app.
While Amazon is keeping mum on the specifics, the Amazon Go model also relies on machine learning to continually revise and improve its recognition of products and customers.
The key to Amazon Go is leveraging AI to minimize any friction in the brick-and-mortar shopping journey, from browsing and selecting items through checkout. The primary means for Amazon Go eliminate friction is removal of human interaction from the store experience.
Although a few human associates are on hand to provide assistance if needed, the optimal Amazon Go shopping trip involves the customer interacting with and paying for products via their smartphone. Amazon Go is the closest yet any physical store model has come to e-commerce, not surprising for the world’s unquestioned online retail leader.
Walmart – Human-plus
In contrast, Walmart’s IRL model applies AI technology to automate mundane tasks to create more human interaction with customers. The 50,000-sq.-ft. store contains more than 30,000 products and has 100 associates working there.
The IRL is set up to gather information about what’s happening inside the store through an array of sensors, cameras and processors. In the near future, a combination of cameras and real-time analytics will automatically trigger out-of-stock notifications to internal apps that alert associates when to re-stock.
Walmart also plans to leverage AI to automatically alert associates of routine events such as a shortage of available shopping carts and the need for more open registers. The idea is to free associates to focus on more customer-facing activities like interacting with shoppers and improving merchandise displays.
Rather than focusing on directly connecting the customer to products, IRL aims at digitally supplementing the capabilities of associates to create a more service-oriented shopping experience. IRL is not meant to duplicate e-commerce, but repurpose certain aspects of online retailing (such as continually in-stock items and availability of checkout) while enhancing the human touch that can only be found in a store. Given Walmart’s brick-and-mortar roots, perhaps this is to be expected.
Ultimately, the “store of the future” may be a big enough concept to contain both these models, as well as others. But to paraphrase Jim Morrison, the future’s uncertain, and the end is always near for retailers who fail to innovate.