As Amazon and Walmart vie for retail supremacy, both industry giants are integrating generative artificial intelligence (AI) into their supply chains to reduce costs and enhance profitability.
Amazon revealed in a Monday (June 3) blog post its use of AI at select sites to minimize returns through its “Project P.I.” model.
This model functions like a detective, utilizing computer vision and generative AI to inspect products for defects before shipment.
It checks aspects like product size and color while investigating the root causes of issues to prevent future defects. Amazon plans to extend this technology to more sites throughout the year.
“We want to get the experience right for customers every time they shop in our store,” stated Dharmesh Mehta, Amazon’s vice president of worldwide selling partner services.
“By leveraging AI and product imaging within our operations facilities, we can efficiently detect potentially damaged products and address more of those issues before they ever reach a customer, which is a win for the customer, our selling partners, and the environment.”
Conversely, Walmart is employing AI at an earlier stage of the supply chain — vendor negotiations.
Earlier this spring, it was reported that the retail giant uses a chatbot from Pactum AI to automate these negotiations. Walmart inputs its budgetary constraints and goals into the program, allowing the chatbot to finalize agreements.
“We set the requirements and then, at the end, it tells us the outcome,” Darren Carithers, Walmart’s senior vice president for international operations, told noting that the software has reduced negotiation times from weeks or months to days.
The latest edition, “New Consumer Spend Data Finds Amazon Way Ahead of Walmart,” indicates that Amazon captures 10% of total consumer retail spending, while Walmart accounts for 7.3%.
The integration of AI aims to reduce costs, making these sales more profitable. In the first quarter of the year, Amazon reported a net income of $10.4 billion, while Walmart earned $5.1 billion in profit.
As Amazon and Walmart continue to implement generative AI across their supply chains, these technological advancements are set to improve operational efficiency and profitability.
