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Walmart Has a New Way to Take Down Amazon

The two retail giants have battled over more than just customers.

Being big comes with its own set of problems and few companies are bigger than Walmart (WMT) - Get Walmart Inc. Report. The world's largest retailer by revenue, the company employs roughly 2.3 million people worldwide. The retailer has 10,585 stores. Having that many stores and managing that many employees, Walmart is feeling the sting of the labor shortage.

In 2020, the pandemic set a course of events that mostly created a shortage of everything in the world market. People unable to or unwilling to work during the pandemic created a shortage of raw goods used to make products, and a shortage of people to procure the raw materials and or make / assemble products. This impacted everything from ingredients for cupcakes to car parts.

Those people willing to work have demanded higher pay to compensate for their hours, as their hours are harder with less people to share the workload. The workers also understanding that they are at a premium have demanded the raises to ensure these companies are able to still deliver their goods and or services.

Amazon Has Been a Leader in AI

Amazon  (AMZN) - Get Inc. Report has been using artificial intelligence (AI) and machine learning (ML) in their business for over 20 years. The use of AI is core to their expansion and overtaking the other big retailers like Walmart and Target  (TGT) - Get Target Corporation Report.

Amazon’s use of AI and ML has been used to help pull products from warehouse shelves to using algorithms to suggest items for customers through their robust website. The AI tracks purchases, knows when you may need to reorder an item, suggests items to buy that go well with other purchase you make. It is so intuitive it is scary.

That's an area where Amazon has always had an investment edge over its rivals.

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Walmart Has Its Own AI Plan

Walmart has been testing the use of AI in its stores and warehouses for several years now. It has only been since the pandemic forcing increase in wages coupled with the labor shortage that AI has become more the solution of today rather than the answer for tomorrow.

Walmart tested use of robotics tracking inventory and restocking, only to pull the plug on Bossa Nova Robotics after the pandemic hit. Walmart decided this wasn’t the solution for the current situation. Walmart had more workers walking its aisles pulling items for online delivery and online pickup from the pandemic, giving the employees a chance to see the inventory problems.

Now, instead of a 6 foot tall robot roaming the aisles at Walmart, it is utilizing data scientists to data dive and find areas to be streamlined. Walmart purchased stock in Symbotic Inc.  (SYM)  an AI company. The purchase was just over 10% stake in the organization.

Symbotic is set to run at distribution centers in all regions. Partnering with Symbotic is only a piece of the organizations plan to be able to curb supply chain issues. Using Symbotic will help in the most manual processes, freeing employees up to do other tasks that are less labor intensive.

The inventory management and analysis equipment will replace some jobs, but Walmart believes that it will free its current employees up to do other work. Walmart has always been about stocking what customers want, and the use of AI is only expected to increase its efficiency.

Walmart, Target, and Amazon are going to continue to compete against one another to be the best while the price is always a huge driver in deciding where to shop, convenience is right up there. 

Currently you can go online and have something ready curbside in about an hour at either Walmart or Target. Amazon lacking in brick-and-mortar store fronts relies on warehouses and delivery. Delivery is still very much manpowered, while testing is out for drone delivery with Amazon.