Big retail goes big tech: How Walmart and Target are leaning into artificial intelligence

Big retail goes big tech: How Walmart and Target are leaning into artificial intelligence

Legacy retailers like Target and Walmart are upping artificial-intelligence efforts to get the desired products into the customer’s hands easier, cheaper, and faster.

The better-than-expected earnings for some firms — along with the uneven performance of others — demonstrates the potential that AI has to transform the retail industry and the treacherous road ahead to get there.

Walmart, for instance, is rolling out new technology in thousands of its stores, with the goal of eliminating the “mundane” tasks done by store associates so they can spend more time with customers.

“Pretty much everything that we focus on is just making things that you know and do today a lot easier,” John Crecelius, Walmart’s senior vice president of central operations, told Business Insider. “What makes this exciting and fun is the ecosystem you create. It’s the art of the possible when you have several pieces of technology in the same store gathering data and interacting with each other.”

Walmart and Target provide parallel examples of AI implementations.

Investment in AI-based startups specific to the retail industry grew to $1.8 billion between 2012 and 2018, the marketing-intelligence firm CB Insights found. Global spending on AI is expected to reach $7.3 billion by 2022, based on estimates from Juniper Research.

Walmart has implemented an automated process to unload shipments from trucks and speed the time under which new products reach the floor. The technology will be used in 1,800 stores this year, according to Crecelius. The company is also using its partner Bossa Nova’s robots to scrub floors and restock shelves and cameras to monitor self-checkouts to curb theft.

That emphasis on operational efficiencies helped underscore solid second-quarter earnings, including a better-than-expected 2.8% growth in same-store sales, according to a UBS report provided to Business Insider.

Walmart doesn’t view any single offerings as a key cost-cutting mechanism. Instead, they’re “individual, small changes that add up to an ecosystem for our stores,” Crecelius said.

The firm is also testing a number of new applications in a store in Levittown, New York, including using cameras, sensors, and other hardware to inform when store employees need to restock certain items on the shelves.

Meanwhile, Target reported second-quarter earnings this month that far exceeded expectations. Among other initiatives, the retailer is using new technology to help dictate employee tasks and improve shipping, according to John Mulligan, its chief operating officer.

Target has also explored using blockchain to better manage its supply-chain operations, initially experimenting with a database to certify its paper providers, according to a blog post earlier this year.

The Minneapolis-based firm is also investing in additional automation in the backroom of its stores to “help them become more productive,” Mulligan recently told investors.

But while AI might be a popular topic, executives are shying from touting the tech they’re adopting.

Executives are typically coy on the actual initiatives under development, but tren

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