· The new trial Walmart store of the future (or Intelligent Retail Lab) does not look futuristic, there is no automated check outs and it doesn’t look like a futuristic user experience.
· Instead its focused on real time inventory control, ensuring that every item on every shelf is always available to buy.
· The IRL store has 1500 cameras and a machine learning system that uses vision recognition to identify tens of thousands of SKU’s.
· By recognising each stock unit, the system can spot when stock is getting low and message a store assistant to restock .
Analysis and Comments
· The Amazon go store concept will get a lot more press attention – with its focus on improving the shopping experience. However, the Walmart trials possibly have greater sector wide relevance.
· Yes, easy check out is important, but stock management, while perhaps less high profile, will arguably be a bigger contributor to operating margins.
· Clearly having 1500 cameras’ in all of Walmart’s stores will be excessively expensive – so the real world roll out will be a lot simpler (this is a trail after all).
· Analysis indicates that the most important elements of future retail will focus on the back end (so supply chain) & customer acquisition & management tools.