As Walmart IRL and Amazon Go become the first phase of AI-powered retail stores, the technology is expected to be embraced by the whole retail industry
Walmart has unveiled the Intelligent Retail Lab (IRL) last week. This is now being called “store of the future.” Now open to customers, the store currently has 30,000 items, which allows the company to test the AI-powered technology in a real-world environment.
Walmart’s IRL is a 50,000 square feet of retail space which is staffed by more than 100 employees. The AI-powered cameras are monitoring the meat inventory levels to determine when to restock products.
The new technology helps the store associates to check and replace inventory and know what to bring out from the warehouse without manually checking for the stocks in the outlet. The customers will also be confident that the produce and meat are always fresh and in stock when they arrive.
The cameras and sensors in the store pump out 1.6 TB of data per second, but Walmart says the data is stored for less than a week. On the opening of the store Mike Hanrahan, CEO of IRL told TechCrunch that, “When you combine all the information we’re gathering in IRL with Walmart’s 50-plus years of expertise in running stores, you can create really powerful experiences that improve the lives of both our customers and associates.” After testing the systems on meat inventory, the technology will be tested on the availability of shopping carts.
Experimenting with AI in a retail store is not started by Walmart though. It was last year when Amazon launched its Amazon Go, a grab-and-go store that had automated checkout solutions, it initiated the use of AI. Retailers and brands have started using intelligent automation to improve efficiency and reduce costs.
As the capability of the technology matures, it opens up entirely new ways of doing business that can increase operational agility, improve the quality and speed of decision making, and enhance the customer experience.
Experts believe that the development of AI in retail stores should be balanced with a focus on increased ROI and also better customer experience. Kees Jacobs, Vice President, Global Consumer Products and Retail Sector at Capgemini in a press release said, “Retailers should be wary not to chase ROI figures without also considering the customer experience. Our research shows a clear imbalance of organizations prioritizing cost, data, and ROI when deploying AI, with only a small minority considering the customer pain points also. These two factors need to be given equal weighting if long-term AI growth, with all of the benefits it brings, is to be achieved.”
This trend of AI in a retail store is expected to catch up. According to a study by IBM Institute for Business Value, over 80 percent of executives in retail and consumer products industries expect their companies to be using intelligent automation by 2021.
Both online and traditional retailers are aiming to win over customers with compelling store experiences. Online retailers too are seen growing their footprints by opening physical stores where they are deploying innovative concepts to compete with traditional retailers.
A 2017 Forrester study, ‘How AI Will Transform Customer Service’ says, 53% of customers will abandon an online purchase if they cannot find a quick answer to their questions. The purpose of using this technology is to provide a meaningful experience to those customers and get them back to retail brick and motor stores.
After Amazon and Walmart, AI experiments in retail stores are expected to become popular and if it is seen to improve customer experience, every store will become ‘store of the future’.